WASHINGTON – Congressional Democrats savoring their return to power in the House and Senate pledged Wednesday to work closely with President Bush on a legislative agenda, but demanded a change in course on Iraq and new directions on policies from the minimum wage to stem cell research.

Sen. Harry Reid, D-Nev., is in line to become Senate majority leader.

“I always would rather dance than fight,” Reid likes to say. “But I know how to fight.”

Reid, 66, says he’ll cooperate with the Bush administration for the next two years. Democrats have always wanted to do that, he insists, claiming that the White House refused to reciprocate.

“I think, frankly, the arrogance of this administration is waning. I don’t think they can continue to be uncompromising, refusing to admit mistakes,” Reid said before the election. “I think this election is going to show them the American people think there should be a change in Iraq and at home.”

Rep. Nancy Pelosi, D-Calif., who likely will succeed Dennis Hastert as House speaker, promised swift action early next year on a Democratic package that includes increasing the minimum wage by $2.10 an hour, fully implementing the recommendations of the bipartisan Sept. 11, 2001, commission, and making some tuition payments tax-deductible.

Pelosi said she would not heed the calls of some activists on the left to explore impeaching the president. But with subpoena power and committee chairmanships, Democrats will ensure that Bush’s anti-terrorism and war policies receive tough scrutiny in the last two years of his presidency.

“Democrats are not about getting even; Democrats are about getting results,” she said. “I have said before and I say again: Impeachment is off the table.”

In January, Pelosi likely will become the first female House speaker in history. Hastert, Ill., the longest-serving Republican speaker, announced he would step aside and let a new generation of Republican leaders emerge after this week’s losses.

In morning phone calls, Bush congratulated Pelosi, the House minority leader, and Senate minority leader Reid and invited them to a White House lunch today. Bush and Pelosi pledged to put behind them a bitter campaign in which the president had claimed that a Democratic victory would be a victory for terrorists and Pelosi repeatedly questioned the president’s competence.

“I’ve been around politics a long time,” Bush said. “I understand when campaigns end and when the governing begins.”

But policy clashes are inevitable. Control of both houses of Congress will ramp up pressure on Democrats to turn their calls for change into quick legislative accomplishments.

Beyond the Democrats’ planned 100-hour blitz to pass most of their legislative agenda, Pelosi reiterated her pledge to restore fiscal discipline to Congress. That could pit her promises of federal largesse against Democratic desires not to roll back the president’s tax cuts before their scheduled 2011 expiration dates. She also vowed to enact the kind of sweeping controls on lobbying and ethics that Republican leaders promised this year but failed to deliver.