The race between assemblyman James Tedisco and financier Scott Murphy in New York's 20th Congressional district is too close to call this morning.

The latest count has Murphy ahead by a scant 65 votes with many absentee ballots still to be counted.

With all precincts reporting, the Democrat, Scott Murphy, a 39-year-old venture capitalist, led 77,344 to 77,279 over his Republican rival, Assemblyman James N. Tedisco, 58, for the seat vacated by Senator Kirsten E. Gillibrand, a Democrat. The turnout was surprisingly strong for a special election.

But 10,055 absentee ballots were issued — and 5,907 received so far, state election officials said — meaning the election cannot be decided until the paper ballots are counted. Moreover, it is likely that the count may not begin until at least April 6, said Bob Brehm, a spokesman for the State Board of Elections.

Republicans held out hope of recapturing the seat in the 20th Congressional District, which is heavily Republican and stretches from the Catskills through the Albany suburbs to the Adirondacks. Democrats, meanwhile, waited to see whether their standard-bearer, a first-time political candidate who campaigned on his support for the federal stimulus package, could pull off an upset.

It would hardly be an "upset" if Murphy prevails. The election was held to replace a Democrat, Kirsten Gillibrand who was named to the senate to fill Hillary Clinton's unexpired term. Obama carried the district in the November election also so the idea that a Democratic result would be a surprise is poppycock - even with a GOP advantage in registration.

Politico tries to spin this as a bad result for the Republicans:

There’s no winner yet in the Upstate New York special election and it might be mid-April before the race is settled. But a few things are clearer after Tuesday’s contest, none of it welcome news to the Republican Party.

The first election to take place during the Obama administration was a push, with neither side winning big or losing big. But that in itself ranks as a defeat of sorts for the GOP, which invested heavily in the race.

Republicans made this race a referendum on President Obama, his stimulus plan and big government policies. But voters divided almost exactly down the middle, showing almost no sign they wanted to brush back the new administration. And this is precisely the kind of place where it would have been obvious had voters been so inclined — a Republican-leaning, small-town district that voted for Obama in 2008.

Virginia Gov. Tim Kaine, the Democratic National Committee chairman, was quick to frame the race as a validation of Obama administration policies.

“Scott Murphy embraced President Obama's message of change and his plans to fix our economy and create jobs, and as a result he stormed from more than 20 points down to winning a majority of votes cast tonight,” Kaine said in a statement.

Republicans and conservative groups poured a lot of cash into the race while the Democrats - assisted by their labor allies - spent heavily on the ground game. This fact was lost on the authors of the piece who tried to spin it as if the hundreds of thousands spent by unions to get out the vote isn't as important as ad money.

And Obama's assistance which included activating his grass roots network and putting his weight behind Murphy was downplayed:

Recognizing the difficulty of the terrain, Democrats sought to downplay expectations throughout the campaign. Obama himself played a limited role, only going so far as to send two e-mails endorsing Murphy to party activists in upstate New York and allowing his image to be used in a small $10,000 ad buy from the Democratic National Committee.

It is likely no result will be known until mid month after the absentee ballots are counted. Then, there will be the inevitable recount, court challenges , and everything associated with such a razor thin margin.

Maybe the winner will be seated in time for the 2010 election.