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President Bush is concentrating on Senate races for 2002 (see cover story, page 16), but the battle for the House promises to be intense. Rep. Dick Gephardt (D-Mo.) is furiously spinning that recent Democrat wins portend big trouble for the GOP: "I think winning 32 of 34 mayor races, winning the governorship of Virginia and New Jersey is an indication. It also tells me that the traditional Republican message of tax cuts and cultural issues is probably not resonating right now." Not so fast. Early evidence suggests the GOP won't just hold the House-it will expand its majority. Take the story of Candice Miller. Currently Michigan's secretary of state, the Republican is one of her state's top vote getters. She was gearing up to challenge Rep. David Bonior, the increasingly vulnerable Democrat minority whip. But Bonior decided to leave Congress and run for governor. Then came redistricting. By the time the Michigan legislature redrew Bonior's district, it encompassed an area Bush won in 2000 by 60 percent. Having already raised more than $600,000, and already leading in the polls by 25 points, Candice Miller is poised for an important GOP pickup. Eighteen states have completed their redistricting. Twenty-two states have unfinished business, including populous Pennsylvania, Florida, and Texas, where the GOP expects to do well. In Georgia, the GOP will potentially lose two to three seats. But Republicans are positioned to hold all 20 of their seats in California, and they may pick up a seat they were not counting on in Connecticut. Republicans believe they will pick up a net of eight to 10 seats from redistricting alone. And unlike New Jersey's Bret Schundler and Virginia's Mark Earley, most GOP congressional candidates should be well-funded. Last cycle, the National Republican Congressional Committee raised $141 million. This cycle officials expect to raise more than $150 million. More good news for Republicans: The GOP is three for three in winning special House elections this year. In October, for example-virtually unnoticed by the national media because of events of Sept. 11-Republican Jeff Miller won a special election for Florida's 1st Congressional District, thus retaining for the GOP a seat held by the retiring conservative firebrand, Rep. Joe Scarborough. This comes on the heels of Bill Shuster keeping the Pennsylvania seat held by his father, and Randy Forbes picking up a seat in Virginia in June that had been held for 18 years by a Democrat. President Bush has threatened his first veto. Senate Democrats are threatening "Armageddon." The economy is worsening, and political partisanship is back with a vengeance. What's going on? In late September, Congress and the White House struck a deal: Discretionary spending bills for Fiscal Year 2002 (this does not include spending on "entitlements") would total no more than $686 billion. That would include the increased defense budget, $40 billion to help rebuild New York City, $15 billion to prevent the aviation industry from going bankrupt, and the economic stimulus package with new tax cuts for business. But Democrats now say they want even more spending, and until they get it, they're refusing to pass the stimulus package through the Senate. Bush is blunt: He'll veto anything above $686 billion. Sen. Robert Byrd (D-W.Va.), chairman of the Senate Appropriations Committee, who's proposing an additional $20 billion in new spending, says if Bush actually signs a veto, "that's when Armageddon will come." Congress has only released about $3 billion of the $40 billion already approved for emergency spending-prompting White House Press Secretary Ari Fleischer to ask: "From the president's point of view, they can't even spend it fast enough, so why ask for more?"

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