Andy Busch thinks that the "elections have put American politics back on its normal historical trajectory." Jonah Goldberg writes: "These elections were neither a repudiation of conservative values nor an endorsement of the Democratic Party." John Moser remembers the 1946 mid-term elections how Harry Truman looked at his predicament and what he did about it. He also has some very specific recommendations for what George Bush should do during the next two years. 
Bush will not submit a balanced budget because he doesn’t want to cut domestic spending in any serious way.
Congressional Republicans will not support a balanced budget for the same reason. If they did, they might gain a few votes from the small fraction of the public that truly cares about fiscal conservatism. But they would lose more votes from independents and moderate Democrats. Immigration crackdowns and opposition to gay marriage are stronger issues, but Bush opposes most immigration crackdowns and does not wish to fight gay marriage. Finally, despite a few resemblances, Bush is no Harry Truman as a campaigner and will not be on the ballot in 2008. He is very poor at delivering a genuinely partisan message, and will not become so just because of these election results. Many years ago, I heard an old friend of Jimmy Carter (then president) interviewed on the radio. Carter was already in big political trouble, and the longtime acquaintance was asked: "Will he change the way he does things?" "Ron," the friend of Carter’s responded, "Have you ever seen a highly successful man in his 50s change the way he does things? .... Nor will you ever."
Peter, right before the election you said that you "think it is reasonable to think that they could lose between 13 and 20 seats in the House, and maybe even as many as four seats in the Senate. Saying they are going to lose anything more than that is being caught up in a frenzy (caused by bad polling and MSM/Dem spin)."
Maybe you need to rethink the validity of the polls and, especially, the ability of voters to dislike Republicans (and Bush and the Iraq war) independent of any "spin", real or illusory.