When America woke up the morning after Election Day, Democrats had lost control of the Senate and were left shaking their heads over the historical midterm elections gains made by Republicans in the GOP-controlled House.

On Wednesday, Democrats tried to make sense of it all.

Party operatives hovered in tight-knit circles to regroup and formulate a strategy for 2004, and to come up with a name to offer on the 2004 presidential candidate ticket.

Among the expected and immediate changes, House Minority Leader Richard Gephardt of Missouri was said to be planning to step down from his post. Sources told Fox News that an announcement could come before the end of the week, and as early as Thursday, though Gephardt's staff refuses to comment.

One Democratic House member told Fox News that Gephardt, while well-liked, may have to get the boot if he can't deliver.

"I have tremendous respect for him and the energy and passion he brings to the issues -- there's not a more passionate Democrat in the House," said Rep. Harold Ford, Jr., D-Tenn. But despite the affection, "if he can't win ball games, then the organization has to move him on."

Ford said there's a lot of uneasiness among Democrats who are reluctant to oust Gephardt, but noted that if the House were a multi-million dollar corporation and its president were failing the company, "shareholders would have asked for his resignation."

In line to take Gephardt's place are second in command, Rep. Nancy Pelosi of California, the House Minority Whip, and Rep. Martin Frost of Texas, chairman of the Democratic caucus. If Gephardt does step down, Pelosi and Frost can be expected to have a showdown before leadership elections in mid-November.

Sources say Pelosi already has the votes to win the minority leader slot. Rep. Steny Hoyer of Maryland, whom Pelosi beat earlier in the year for the whip position, would then take that job.

But Gephardt's possible departure doesn't solve all the Democrats' problems.

Over at the Democratic Senatorial Campaign Committee and the Democratic National Committee, staffers appeared stunned that their internal polls, as well as some public polls, were wrong and caused them to misallocate resources.

Democrats were also searching for a way to overcome the Republicans' White House advantage.

Democrats concluded that last-minute barnstorming by President Bush in support of Republican candidates was vital, and that they may have underestimated the public concern over war and overestimated their economic rhetoric.

Democrats add that they simply might not have had enough pizzazz to counter the advantage Republicans gained from a presidential whirlwind campaign tour that raised more than $140 million for his candidates.

"We had strong Democratic candidates who were well-funded, strongly staffed, with strong logistical operations on the ground," DSCC Chairwoman Sen. Patty Murray, D-Wash., said in a statement Wednesday. "But the American electorate is as closely divided as any time in history, and we were dealt a tough hand."

Democrats simply couldn't overtake the GOP's "political muscle," especially with a war-time president stumping so hard for his party's candidates, added DNC Chairman Terry McAuliffe. Republicans also "clearly had the home field advantage," he said, since many of the very competitive key races were in states Bush carried in the presidential race of 2000.

"If Republicans had an edge over us yesterday, it was tactical rather than ideological," McAuliffe said Wednesday. "Last night's results simply don't reflect an ideological tip in favor of Republicans."

Republicans, however, countered that while their candidates conducted impeccable campaigns, Democrats are responsible for their own destruction.

"Democrats have embraced a desperate Election Day doomsday strategy," said Marc Racicot, Chairman of the Republican National Committee.

"Because of the Democrats' exhausting inability to address issues of urgency and importance to the American people, the chairman of the Democratic National Committee has attempted to breathe life into an otherwise confusing and scattered agenda through the use of wild and wacky allegations of misconduct," he said.

Trying to find favorable angles Democrats can argue in the next election, McAuliffe said GOP special interest money "helped them blur the very real difference between our parties," like stances on prescription drugs and Social Security.

McAuliffe also slammed the GOP for not reaching out enough to the Hispanic population, saying the opposing party's efforts "added up to absolutely nothing."

"A party's political outreach is only as strong as its underlying values," McAuliffe said, calling GOP efforts "hollow gestures," and saying Republicans simply can't match Democrats' commitment to job security, health care, civil rights, and other issues with which voters, particularly minorities, usually identify.

Democrats didn't have an entirely bad night on Tuesday. They captured governorships in four key states -- Pennsylvania, Illinois, Wisconsin and Michigan.

They also raised an unprecedented amount of money -- triple the average amount -- this year.

"These investments were key factors in our strong victories in gubernatorial elections all over the country," McAuliffe said. "Our gubernatorial pickups will give us an advantage."

And while Republicans upset Democratic gubernatorial plans in Georgia, where Republican Sonny Perdue defeated Democratic incumbent Gov. Roy Barnes to put a Republican into the Georgia executive seat for the first time in years, Democrats are optimistic.

"Folks, Democrats are in good shape and we look forward to the upcoming cycle," McAuliffe said.

Murray said, "we will be watching" to make sure Republicans will deliver on the issues on which they campaigned.

Fox News' Major Garrett contributed to this report.