If 2006 was the year that the Republicans lost it, 2007 was the year that the Democrats lost it snatching legislative and political defeat after defeat out of the jaws of victory. For twelve long years the Democrats had struggled to regain congress. For six years of the Bush Presidency the Democrats had been driven to hysteria and desperate measures to try and regain either congress or the Presidency and eventually losing hope decided to just wait until the Republican President and congress screwed up badly enough to open the door for them to return.
In 2006 that finally happened, the Democrats took Congress and then seemingly having forgotten how to run it, they spent the remaining time until today losing it. It's not entirely possible to blame the Democrats for sticking with what worked. Claiming that Bush had stolen the election, being pro-war, embracing the anti-war movement had all failed. The one thing that had worked was waiting until the Republicans screwed up badly enough and walking in to their seats. And they kept doing that all through 2007, the problem was that the public had already elected them and expected them to actually fix things.
The Democrats congress wrangled with itself and generally did nothing. By late 2007 Bush was back at the wheel and slapping Congress around, something that should have been politically impossible for a lame duck President with low approval ratings and a hostile majority in both houses, but by then congress itself had approval ratings that were nearly as low and no sense of direction. The Surge had worked and the Bush Administration seemed to have some sense of direction, meanwhile Congress was engaging in freelance diplomacy with trips to Syria and Pelosi and Reid were overshadowed by Obama and Clinton. It was a disaster all around.
The Democrats had based their election hopes on losses in Iraq. Their own experts had told them that a turnaround wouldn't happen, fortunately for American troops and unfortunately for the election prospects of the Democrats, a turnaround did happen. Had the Democrats been capable of any political courage, they might have stuck to being anti-war, instead they began waffling all over again, outraging the radicals at MoveOn.org that had helped pay for the election while annoying the people that had actually elected them with their indecisiveness and general uselessness.
The Democratic victory in 2006 had come at the cost of admitting many conservative Democrats into their ranks, particularly to pile up wins in Southern and Western states. The price of victory was a divided party that was even less capable of presenting any kind of united front. Reduced to a weird fusion of the Democratic party of the 20's and the Democratic party of the 80's, Congress became overshadowed by its own Presidential candidates and its failure to expect success in Iraq and deferred to its default mode of waiting around for Bush to fail and for a Democrat to take the White House. The public punished that indecisiveness with low approval ratings and general disgust.
The Democrats had managed to alienate both their mainstream base and their radical supporters, trapped between the two, they had simply frozen like deer in the headlights of history. While the Republicans were hardly in good shape, the Democrats had managed to dissolve into jello and squander their victories in a little over a year, something that took the Republicans the better part of a decade. It was certainly one area where the Democrats had accomplished more than Republicans, but not quite worth the bragging rights.
On the Presidential campaign trail meanwhile, the likeliest Democratic presidential nominee is a woman that more than half the country is polled as saying they won't vote for, whose politics are far left of center and yet is actually the conservative compared to her closest rival, a first term Senator with no political experience.
As before the only hope for the Democratic party is that the Republicans screw up badly enough for them to take power and with a chaotic Republican field of candidates, filled with liberals out of touch with Americans, that might well happen. 2007 was the year the Democrats lost it but 2008 might be the year the Republicans lose it.