Democrats gain more power over economic policy

WASHINGTON, Nov 8 (Reuters) Democrats who seized power in the US House of Representatives from President George W Bush's Republican Party may engineer a higher minimum wage for Americans but not a sweeping makeover in economic policy-making, analysts said.

Democratic gains in today's election will put them in charge of the House and its key committees for the first time since 1994.

Democrats also were on the brink of wresting power in the Senate, giving them a robust platform for policy change.

But executive authority in Republican hands leaves limited scope for achieving it.

On Wall Street, stock prices fell amid caution over the undecided Senate race. But bond prices and the dollar were bolstered by expectations a divided government would limit spending, keeping down the supply of Treasuries.

House Democrats have laid out an agenda that puts a hike in the minimum wage near the top.

Rep Charles Rangel, ranking Democrat in line to become chairman of the powerful House Ways and Means Committee, urged Treasury Secretary Henry Paulson to help identify ''some 'low-hanging fruit' or policies that we can deal with together in the first months of 2007'' to establish trust.

In an interview with Reuters, Rep. John Spratt, the presumed new chairman of the US House of Representative's budget-writing committee, vowed to try to end chronic deficits.

''We would simply like to go in a measured way toward deficit reduction and a balanced budget within the next five years,'' the South Carolina Democrat said.

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