Quote from AAAintheBeltway:
With the election results in, we appear to have an environment that has often proven diastrous for the party holding the White House. The pattern is one party in the last two years of a two term presidency and the opposing party holding both houses of congress. It occurred in the Eisenhour, Nixon/Ford and Clinton administrations. Each time the party controlling congress went on to win the subsequent presidential election. I don't recall if Democrats controlled both houses during Reagan's last term, since Senate control changed hands during his term. I believe Democrats did hold both houses then, however making his administration the sole exception. His successor, George Bush Sr, proved to be a one term president however.
The potential good news for the Republicans is that Democrats' hold on congress may prove tenuous. Clearly the main issue Tuesday was Iraq, a situation that is likely to be resolved by the next election. Republicans were tainted by scandals which are unlikely to reoccur. Their core voters were annoyed with them and or demoralized. Two years of Nancy Pelosi are likely to get these voters motivated again.
It will be crucial for Republicans to rebuild trust with their base. Immigration reform is the thin ice of that task however. If Bush's "comprehensive" immigration reform, also known as amnesty for 11 million illegals, passes and is signed, the Republicans could be staring permanent minority party status in the face. They would face the inevitable thrid party campaign of a Minuteman-backed anti-immigration campaigner. Republicans would have zero chance of winning the presidency and could easily lose more House seats.
I think it has been over for a long time.