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What lessons will GOP take from losing New York-26 House seat?

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“We can balance our budget the right way – not on the backs of our seniors, but by closing corporate loopholes for companies that ship jobs overseas, and ending subsidies to Big Oil and yes, by making the multimillionaires and billionaires pay their fair share,” said Congresswoman-elect Hochul, in a statement after the vote on Tuesday. “And we can ensure we do not decimate Medicare. We will keep the promises made to our seniors, who have spent their lives paying into Medicare, so they can count on health care when they need it most.”

The House Republican budget for fiscal 2012 proposes replacing the existing Medicare system, headed for insolvency by 2024, with subsidies to help seniors pay for private health insurance. The New York special election marked its first road test with voters.

“What is clear is that this election is a wake-up call for anyone who thinks that 2012 will be just like 2010,” says Jonathan Collegio, a spokesman for Crossroads America, a conservative group that poured some $700,000 into television and Internet ads to boost Corwin's campaign. “It’s going to be a tougher environment, Democrats will be more competitive, and we need to play at the top of our game to win big next year.”

At the same time, tea party candidate Davis, a former Democrat who self-funded his $2.5 million campaign, focused on jobs and the economy, and targeted especially free trade agreements that “ship our jobs overseas.” He pledged to “put American jobs first.” Republicans dubbed him a spoiler.

“In New York-26, the Republican Party nominated a fairly conservative establishment Republican in Jane Corwin, but an ex-Democrat named Jack Davis, running as a 'tea party' candidate, siphoned votes from the Republican,” said Chris Chocola, president of the Club for Growth, a conservative advocacy group that backed Corwin, and a former representative from Indiana.

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