Scott Brown holds up a special edition of the Boston Herald after his win.
By Philippa Thomas
BBC News, Washington
What an anniversary gift. President Obama ends his first year in office with Republicans popping the champagne corks - celebrating a victory in Massachusetts they hope will be a harbinger of political gains to come.
A year ago the Democrats were talking about hope and history. President Obama's agenda was ambitious, and his legislative reach impressive.
They dreamed of remaking American government. They had to switch gears to help shore up the American economy.
And as of today, Democrats are licking their wounds - still the majority party in US politics, but stunned nevertheless by that electoral blow in Massachusetts.
The next few days will be a critical test of President Obama's strategic abilities - and nerve. Will he be defiant, or conciliatory?
Will he come out fighting for his healthcare initiative in its present form, or back off, accepting that with this vote, he has now lost vital momentum?
Young Republicans are buoyed by recent poll results
He needs to have the answers - and deliver them convincingly - during his State of the Union speech next Wednesday.
What will he say about his healthcare initiative, and the rest of that ambitious agenda? How does he rephrase "hope and change" to the American public now?
Above all, he needs to know he still has strong backing from the US electorate.
He needs opinion poll figures that show the Democrats matching, or outstripping, their Republican rivals. And yet the numbers are not exactly promising.
The independent Pew Research Center reports that while marginally more registered voters intend to back the Democrats in November's Congressional elections, many more Republicans describe themselves as "enthusiastic".
For mid-term elections - which lack the drama of a presidential choice - that enthusiasm is often what matters most.
In the eyes of many Republicans, the tide has already turned. Conservative commentator Reihan Salam, co-author of the book Grand New Party, says there is "a real exhaustion with what many folks see as Obama's big government agenda".
Outside Washington, the Tea Party movement organising protests against the federal stimulus package has gone from strength to strength, with speakers like the charismatic Sarah Palin riding the tiger of populist anger.
To these protesters, the value of big spending to stimulate the economy matters little.
They complain about the money they say is being wasted in the nation's capital and on Wall Street while small town America is forced to tighten its belt.
Reihan Salam thinks the time is right for an American-style back-to-basics campaign, for a dose of good old-fashioned classic conservatism.
Whether you are a social libertarian or a culture warrior, his argument goes, surely the right can coalesce around a platform of pocketbook issues - less spending, lower taxes, reducing debt.
Who better than Republicans to speak the language of middle-class aspiration and small business enterprise?
But who is going to sell that message to a majority of American voters?
The beauty of the Obama campaign lay in its outreach - not just to core Democratic constituencies like union workers, black and Hispanic voters, but to registered independents, and the many thousands of young Americans who had never before bothered to vote.
I take my question to an entirely unscientific panel of young Republicans at Kramerbooks Cafe, one of the many hangouts in Washington DC that is nirvana for political junkies.
Republicans Bob McDonnell and Chris Christie were elected governors of Virginia and New Jersey in November 2009, replacing Democrats
Mid-term elections in November 2010 will see contests for 36 seats in the Senate, all 435 seats in the House of Representatives, and 37 state governors' mansions
Twenty-something graduates Eric, Edwin, Anna and Quadricos all agree that right now, it is just great "playing offense" again.
"Why wouldn't we be optimistic?" asks Quadricos Driskell, 26.
They do not want to focus on the traditional topics which normally make the heart of Republicans beat faster, like guns, gay rights and abortion.
Within five minutes they agree on this: the Republican appeal has to be about the bread-and-butter issues instead: taxes, business and jobs.
They admit there is some grumbling in the ranks about the way the Republican party campaigns.
Yes, they say, young Republicans cast envious eyes on the success of Obama's online campaign, "Organising for America".
Edwin Elfmann, 23, says there is a disconnect between old and young in his party.
"We look, unfortunately, like the party of senior citizens", he says.
Anna Pope, 27, says her party has to get beyond the perception that it "is full of old white men".
"We ought to be on Facebook and MySpace and Twitter, the sort of social media that appeal to younger people," she argues.
But Eric Snyder, who at 28 has the most campaign experience, insists it has to be about content.
"No-one's going to friend a politician on Facebook, unless they agree with his policies," he says.
He thinks it is time to talk about a "big tent party" that practices inclusion.
I ask them who should be heading the campaign to seize this "opportune moment" for the Republican party.
Former Massachusetts Governor Mitt Romney, says Eric; Louisiana Governor Bobby Jindal, says Quadricos; Minnesota Governor Tim Pawlenty, says Edwin; and Anna settles for Virginia Congressman Eric Cantor.
Four young Republicans, four different choices for their presidential candidate.
There clearly is no lack of opposition to President Obama and his policies, but there still seems to be no single answer as to who should take him on in the next election.