U.S. Congress faces historic challenges

By Thomas Ferraro and Richard Cowan

WASHINGTON (Reuters) - Democrats will pack greater clout when the new Congress convenes on Tuesday but they face enormous expectations from voters as they grapple with two wars, a financial crisis and record budget deficits.

Lawmakers begin work 14 days before Barack Obama is sworn in as president. When he takes the oath on January 20, Democrats will control the White House and Congress for the first time in 14 years.

Having rolled to victory in the November election with a promise of change after eight turbulent years under Republican President George W. Bush, Democrats need to produce results.

Their top priority will be approval of a mix of middle-class tax cuts and emergency spending they hope will prime an economy that has been shrinking for more than a year.

This package could end up costing around $775 billion (533.7 billion pounds).

The Democratic-led Senate plans to move quickly to confirm Obama's Cabinet nominees, who include Sen. Hillary Clinton of New York as secretary of state and New York Federal Reserve chief Timothy Geithner as secretary of the treasury.

Other Democratic promises include: withdrawing U.S. troops from Iraq and redeploying many of them in Afghanistan; expanding health care; bolstering regulation of the financial industry and developing alternative energy sources while curbing pollution that contributes to global warming.

"The 111th Congress will hit the ground running in January with an ambitious schedule," House of Representatives Speaker Nancy Pelosi wrote in an open letter to Democratic colleagues.