Obama himself remains in solid shape, politically. the silver lining in this, as i see it, and despite my dashed dreams of substantive change that would actually reduce suffering, more divided government might eventually lead to better governance like we saw in the middle Clinton years (1995-1998).
Like U2MDFan and Deep, I would say the Republicans were far worse in the Clinton years. Dan Burton was in his heyday, you had Whitewater, millions spent, no illegality found, you had Vince Foster, millions spent, no illegality found, you had a batshit impeachment process for nothing and millions spent on Ken Starr in the entire process. Imagine if the Democrats had appointed a special prosecutor to go after Bush when he was in Office? They would have had ads on every channel comparing them to Osama.
You are right, 1995-1998 had its successes, but it seems it was mostly due to Clinton's political skills/personal popularity and the good economy, not really due to a spirit of cooperation among Republicans.
1995: The Republicans shut down the government 2 times to try and intimidate Clinton into gutting Medicare and Medicaid and pass massive, budget busting tax cuts. This was a divisive time, but Clinton won out when he told the Republicans flat out that they "would have to get someone else to sit in this chair to pass that budget."
This started a trend. The Republicans would never get their budget work done on time, and they more or less had to accept Clinton priority filled budgets. This was fine by them, they calculated, as the economy was good, the country was happy and they would not have to govern. They began to run out the clock on Clinton, try and deny him any credit for the strong economy and went to work on conspiracy theories to distract everyone. The Republicans never got a budget even remotely reflecting their desire to cut taxes deeply across the board, eliminate the estate and capital gains tax and cut education, raid the SS trust fund, etc.
Some good things happened, but mostly a function of the fact that it is easier for reasonable people in both parties to work together, from a political liability standpoint, when times are good.
Welfare Reform: The Democrats propose the Work and Responsibility Act of 1994, introduced in both Houses, requiring work and time limits but providing job training, health care and child care funding so states can actually move recipients into jobs. The Republicans gut the jobs training, health care and child care provisions and say that Clinton is anti work and anti family for vetoing the legislation that had turned into nothing more than an unfunded mandate. The Republicans finally realized in 1996 that they would have to accept Clinton's principles for welfare reform or else face re election having not got anything done here. Clinton had been for "ending welfare as we know it" since 1980, but Gingrich tried to take credit.
Health Care reform: Kassebaum-Kennedy- you had a moderate Republican, Nancy Kassebaum and Ted Kennedy working across party lines. A similar situation with the creation of S-Chip in 1997. This was only possible because the economy was good and the Republicans could spend some money on domestic affairs without their base having a fit. Kennedy and Kassebaum are gone now.
The 1997 Taxpayer relief act: Got alot of Clinton priorities passed, and got alot of Democratic and Republican tax priorities passed. Again, it is easy to cut taxes and expand college education funding dramatically when the economy and therefore revenues are strong. Alot of the moderates who worked on this, like Pete Domenici and John Breaux, are gone.
In one way the Republicans were better: you had your nuts like Burton, Gingrich and Livingston hiring Ken Starr, etc, but you had many more in the mold of Pete Domenici, John Warner, Nancy Kassebaum, etc back then. The Republican party in the 1990s had alot more Olympia Snowes and Susan Collins. Obama's transportation Secretary Ray Lahood was in Congress, as was a guy who spoke at the DNC in 2008, Jim Leach.
Today's Republicans are not quite as conspiracy theorist crazy, nor are they as militant on things like abortion, but the difference is there are much fewer reasonable ones to balance the crazier ones out. Since I don't care one bit about abortion stances either way, I would eliminate that as a factor and say in conclusion, that they are not as bad today, but they certainly have the potential. If Obama gets re elected or even before 2012 things get better in any way, the personal attacks will intensify and be worse on the "non real American" Obama than they were on a certain white guy from Arkansas.