May 12, 2011 -- New York's 26th district, where a special election is being held for a House of Representatives seat, has become the battleground for the Republican budget plan and Medicare proposal that could have significant implications for 2012.
In a surprising turn of events, GOP candidate Jane Corwin is finding herself in a tight three-way race with Democratic Erie County official Kathy Hochul and businessman Jack Davis, who is running as a Tea Party candidate.
The race was supposed to be an easy one for Corwin.
The district, in western New York State between Buffalo and Rochester, is heavily Republican. Only three Democrats have won in this area in the last century, with the last one leaving office eight years ago.
But Hochul's campaign has aggressively targeted Rep. Paul Ryan's budget proposal that reshapes Medicare and was passed by the House last month. Her campaign has also portrayed Corwin as a Republican insider who would help, in effect, bring an end to Medicare.
In a district where seniors make up 15 percent of the population, the message has struck a chord.
"This is a real test for the Democrats on whether Medicare can move voters to their side," said David Wasserman, House editor and political analyst at the Cook Political Report.
Even Donald Trump, a potential 2012 presidential candidate, said Ryan's Medicare program was to blame for Corwin's troubles.
"A very popular Republican woman is running for the office. She was expected to win easily," Trump said Wednesday. "She's having a hard time defending that whole situation with Medicare."
Hochul is also helped by the independent candidacy of Davis, who has run several times before as a Democrat but has now moved to the Tea Party.
A survey by the Siena Research Institute in late April showed Corwin winning the race with 36 percent of the vote, with Hochul getting 31 percent and Davis 23 percent. Though recent data has been sketchy, analysts say the race is tightening.
The Cook Political Report moved its rating for the race from "Likely Republican" to "Leaning Republican," while the Rothenberg Political Report moved the race to the "vulnerable" category.
"We've seen Republicans have problems in special elections in New York before but it looks like Republicans had avoided some of the mistakes from those races. They nominated a Republican who looked acceptable to conservative groups," said Nathan Gonzales, political editor at the Rothenberg Political Report. "But what they didn't anticipate was the effect of getting pummeled by two candidates, including a wealthy businessman who's shown he's willing to spend what it takes to get to Congress."
The race has gotten so tight that national groups are stepping in to help a struggling Corwin. Conservative group American Crossroads funneled $350,000 in the special election to run television ads for the assemblywoman. House Speaker John Boehner, R-Ohio, made a personal appearance at a fundraiser on Monday for Corwin.
Meanwhile, Democrats are stepping up their fundraising in a district that they'd all but conceded in the past. Sen. Kirsten Gillibrand (D-N.Y.) sent a message to Democratic Congressional Campaign Committee supporters Wednesday to help raise $10,000 for Hochul.
Democrats have suggested that the debate over Medicare could be a bellwether for 2012.
But observers warn that it may be too early to say whether Medicare and the general queasiness among the public over the budget plan is really to blame.
"It's too complicated to say the Ryan budget is the reason why this is the way it is," Gonzales said. "But I don't think Republicans should take comfort that an election based on Medicare is a winning election for them."
What could hurt Republicans are the divisions the race has exposed within the Tea Party.
New York Congressional Race: a Test of Medicare Plan?
TEA New York, which claims to be the largest Tea Party group in western New York, has endorsed Corwin. But the Tea Party Coalition of Western New York has thrown its support behind Davis.
"It's pretty clear that most of Jack Davis's positions are anathema to what most self-identified Tea Party activists would believe," Wasserman said. "However, there are some Tea Party flavored Republicans in the district who would prefer to vote for a complete and total outsider to stick it to both parties."
These independent voters could pose a challenge for Corwin and boost Hochul's chances.
Hochul would need Davis to get at least 15 percent of the vote to win the election, according to a Democratic insider.
Roy Scherrer, a volunteer with the Tea Party Coalition of Western New York -- a group of about 30-45 volunteers -- says he will vote for Davis because he is impressed by the way he has run his business, but also because he feels both parties are corrupt.
"If Mickey Mouse was running for office against a Republican and a Democrat, I would vote for Mickey Mouse," he said. "That's how I feel about a corrupt government."
The special election is being held to replace Republican Rep. Chris Lee, who resigned after a shirtless photo of him was leaked to the press by a woman he met, and flirted with, on Craigslist. The election will be held on May 24.