CORRECTED: House race in New York too close to call

Corrects number of New England’s congressional seats, paragraph 10

NEW YORK (Reuters) - A special election to fill a congressional seat in New York state was too close to call late on Tuesday with less than 100 votes separating candidates in the race viewed by many as a referendum on President Barack Obama’s handling of the U.S. economy.

Local media reported Democrat Scott Murphy, a venture capitalist with no background in politics, led Republican State Assembly Minority Leader Jim Tedisco by less than 100 votes in the largely rural House of Representatives district.

CBS, NBC and ABC reported that 154,000 votes were cast and that about 99 percent of those had been counted in the race for the seat in the state’s 20th district, where registered Republicans out-number Democrats.

The election is likely to be decided by up to 10,000 absentee ballots, none of which have been counted yet and which can be received until April 13, local media reported.

Political experts said the election could be interpreted as a possible sign of how voters assess Obama’s performance since he took office on January 20.

“This can be viewed as a referendum on how Barack Obama is handling the economy,” David King, a professor at Harvard University’s Kennedy School of Government, told Reuters. “It’s national issues that are animating voters.”

The winner gets the House seat vacated by Democratic Representative Kirsten Gillibrand, named to replace Hillary Clinton in the Senate after Clinton became secretary of state.

The results will have little effect on the balance of power in the 435-member House, where Democrats have a 76-seat majority. But experts say it has national importance.

“If the Democratic candidate wins in this Republican district, it should be seen as good news for Obama and the Democrats,” said Robert Erikson, a political science professor at Columbia University. “If the Republican wins, the interpretation should probably be ‘business as usual.’”

A win by Tedisco would help Republicans prove they can win in northeastern states, where they hold just three of New York’s 29 House seats and none of New England’s 22 seats.

“If the Republicans win, they begin to build a tiny bit of momentum that they can use toward candidate recruitment for 2010 and for fund-raising,” said Justin Phillips, also a professor at Columbia University. “If the Democrats win, this race will be perceived as yet another electoral failure for Republicans and will certainly be dispiriting for their base.”

A Siena College poll released on March 12 showed Tedisco ahead by 4 percentage points, nearly within its margin of error, down from a lead of 12 percentage points in February.

Shripal Shah, a spokesman for the Democratic Congressional Campaign Committee, said Murphy, who Obama has endorsed, would “work with President Obama to get our economy back on track.”

Paul Lindsay, a spokesman for the National Republican Congressional Committee, added, “Democrats are afraid to admit that this is a contest between Main Street and Wall Street.”

Additional reporting by Andy Sullivan in Washington, editing by Will Dunham and Todd Eastham