Even in this toxic political atmosphere, Democrats and Republicans will work out at least some legislative deals, By Richard Sammon, Senior Associate Editor November 19, 2010 Conventional wisdom foresees near total gridlock in Washington for the next two years as the politics of 2012 takes hold. Bipartisan conciliation is nowhere in sight.There is a measure of truth in that outlook. Republicans are energized and emboldened by retaking the House and gaining leverage in the Senate. The Democratic caucus, especially in the House, is more liberal as a result of election losses by centrists. The Republican caucus is more conservative and less inclined to seek big bipartisan compromises. Even so, there are some areas where agreement is likely once the new Congress gets under way. Expect some of them to be included in President Obama’s State of the Union address early next year. Trade.Three free trade agreements have promising odds. The first is with South Korea, despite Obama's missing his self-imposed deadline to work out specifics last week in Seoul. Obama says he expects that he and South Korean President Lee Myung-bak will settle their differences "in a matter of weeks." Look for Obama, who will promote free trade with South Korea as an overall job creator for the U.S., to send the pact to the Senate for ratification next year. Republicans and many Democrats will back it. Odds favor approval of FTAs with Colombia and Panama as well, although they require more work than the South Korea pact. Advertisement Debt limit increase. It won’t happen easily, but it will happen. Sometime in March or April, a debt limit increase will be needed. Conservatives and many Tea Party-backed freshmen will oppose it, saying Congress must put a brake on more massive spending. But not passing a higher debt limit would be deemed perilous. Leaders in both parties will allow members to vent on the subject of the debt. But they’ll also clear the way for passage, saying the “faith and trust” in the American dollar and national commitments are at stake. Afghanistan. Both sides will agree to provide more supplemental funding for the military operation in Afghanistan. Antiwar liberals and some conservatives will question the merits of more spending for a prolonged effort in Afghanistan, but will, in the end, find it hard to vote against funding for troops. Republicans will aim to water down the administration’s stated policy to begin withdrawing troops in July. Obama will agree to make the withdrawal date more flexible and base it on the advice of military commanders instead of the calendar. Transportation. Bipartisan agreement on a massive renewal of highway and surface transportation aid looks certain, probably in 2012. The specifics need to be worked out, but the legislation draws support in nearly every corner of Congress. Hundreds of surface transportation projects, benefiting every congressional district, will be funded through this legislation. Energy production and investment. Some aspects of natural resource development will always be controversial, but there is an expectation that Obama, House Republicans and many Democrats in both chambers will be on board for limited energy expansion bills. Obama is already signaling Republicans that he will support more nuclear power. There may be agreement to limited new oil and natural gas production on federal lands, including in Alaska. Also, both parties and the White House may be able to form a consensus to expand federal research investment and tax breaks for developing alternative energy, including wind, solar and hydropower. Advertisement Domestic spending. Republicans want to cut tens of billions of dollars from domestic, nondefense discretionary spending. Obama and Democratic leaders will aim for a slight overall increase. They’ll meet somewhere in the middle, perhaps agreeing to a 1% to 2% overall increase -- less than inflation. Republicans will be able to claim they started to put the brakes on federal spending. Both parties will be able to cite some spending reductions, even if there is a small overall increase. Health care. Repealing the health care law is out of the question. Republicans will certainly try, but getting 60 votes in the Senate is a stretch, and even if they could find the votes, Obama would certainly veto the bill. But look for Republicans to bring down some specific provisions. One thing both parties can agree on is watering down or striking language that requires businesses to report payments of more than $600 to other businesses for goods and services. Most lawmakers on both sides of the aisle call the requirement ill considered, and business lobbies are pressing for prompt action to remove it from the books. A deal on medical malpractice reform is also not out of the question, though much negotiation would be required. Farm programs. A new farm bill seems likely to pass at some point, but not before deficit hawks chisel away at it. As part of the deficit reduction effort, expect both parties to agree to trim some product subsidies, direct payments and agricultural research. Farm bill politics is more regional than partisan. While details and deals won’t be worked out for some time, count on lawmakers from the Midwest and South to join with the White House to clear a path for a slimmed down bill during the next couple of years. Weapons programs. Obama and the top Pentagon brass will propose cuts -- not deep slashes, but some trimming in programs such as combat jets, submarines, missile defense and military space research. Figure on several influential Republicans, such as Sens. John McCain of Arizona and Richard Lugar of Indiana, and incoming Senate freshmen, such as Marco Rubio of Florida and Rand Paul of Kentucky, to join Democrats and the administration in paring some costly items that are not vital to ongoing military operations. Senate Armed Services Chairman Carl Levin (D-MI) and the likely next chairman of the House Armed Services Committee, Howard “Buck” McKeon (R-CA) will work together and with the administration on specific reductions.