With just a handful of votes separating them, the candidates in a New York congressional race that focused on President Barack Obama's economic policies said Tuesday they know the contest won't be decided for at least two weeks.

With all 610 voting precincts in the 20th Congressional District reporting, Democrat Scott Murphy led Republican Jim Tedisco by just 65 votes out of more than 154,000 cast in the race to replace Democrat Kirsten Gillibrand, who was appointed to succeed Secretary of State Hillary Rodham Clinton in the Senate.

Murphy had 77,344 votes; Tedisco had 77,279 votes.

"With over 5,000 absentee and military ballots still left to count, this race is far from over. We are confident that the Republican advantage in these absentee and military ballots can put Jim Tedisco over the top, and the Republican Party will do everything in its power to make sure all lawful votes are counted," Republican National Committee chairman Michael Steele said in a statement released Wednesday.

There were more than 10,000 absentee ballots sent to voters who were registered in the district but were unable to vote at their polling places. Nearly 6,000 had been returned, but none of them was to be counted Tuesday night, state election officials said. New York agreed to count overseas absentee ballots until April 13, instead of the initial April 7 cutoff, after the U.S.

Department of Justice sued the state for not giving overseas voters enough time to return ballots.
Republicans said their polling of the 10 counties in the district showed them to have an advantage of about 1,100 absentee ballots sent to registered Republicans, but that couldn't be independently verified.

"Last night some of the votes in this election have been counted, but not all. It is important to remember that this continues to be an ongoing election. Absentee ballots continue to come in, including those of our military members serving overseas, and those votes must be counted under the law," Tedisco's campaign manager Brian Nevin said in a statement Wednesday.  

Murphy said his campaign, win or lose, proved the naysayers wrong.

"The people in Washington said it couldn't be done," Murphy said at a campaign gathering. "And the people in this room and all across the 20th district tonight said something very different."

In a statement released Tuesday, Governor Tim Kaine, Chairman of the Democratic National Committee, said, "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. Scott's performance tonight in an overwhelmingly Republican district, where Republicans enjoy a registration advantage over Democrats of more than 70,000, represents a repudiation of the failed politics and policies that Republicans continue to embrace."

"We are confident that when all the ballots are counted, Scott will expand his lead and become an ally to President Obama in Congress who will help the President create jobs and turn our economy around," Kaine said. 

New York Republican Chairman Joseph Mondello has filed a lawsuit against the state Board of Elections, every participating county board of election and the two candidates requiring all paper ballots be impounded. It's not an unusual step in close elections.

"They want to make sure that they secure all of the paper ballots that are on file with the Board of Elections," said Don Kline, the Republican commissioner of the Columbia County Board of Elections.

The diverse district stretches from the rural Adirondack Mountains, an hour south of the Canadian border, down to Dutchess County, about an hour north of New York City. It has more than 196,000 registered Republicans, about 125,000 Democrats and 118,000 unaffiliated voters.

Murphy, a businessman and political newcomer, and national Democrats staked his campaign on the strength of Obama and his economic policies, specifically his $787 billion stimulus plan.

Tedisco, an Assemblyman for 27 years, attacked Murphy for supporting the stimulus plan, which he said allowed massive bonuses at the bailed-out insurer American International Group Inc.

Republicans hoped a win would knock Obama off balance and put them back on the political map in the Northeast after two dismal cycles that saw them go from nine New York representatives before the 2006 elections to three after the 2008 vote. Republican National Committee Chairman Michael Steele identified the race as one of the party's top priorities for this year.

Democrats looked for the reassurance of a win in a Republican district less than 100 days after Obama took office and in the wake of his stimulus package, which was criticized for a loophole allowing bonuses at AIG.

Even hours before polls closed, the White House was portraying the vote as a win for Democrats no matter the outcome because of inroads they have made in the district, which has more Republicans registered and a long history, until recently, of electing GOP candidates.

"To even be competitive in a district like that, I think says a lot," press secretary Robert Gibbs told reporters on Air Force One as Obama traveled to London.

Each campaign raised more than $1 million and got major support from national committees and political groups.

Murphy, 39, is a venture capitalist multimillionaire from Columbia, Mo., who has lived in New York for more than a decade.

Tedisco, 58, is the GOP minority leader in the state Assembly. He's been in politics for 27 years representing a mostly working-class district. He doesn't live in the congressional district, an issue used by Democrats during the campaign.

Gillibrand was appointed to the Senate by Gov. David Paterson in January, surprising many who believed he would appoint Caroline Kennedy, the daughter of slain President John F. Kennedy. But Kennedy withdrew at the last moment.

The special election for Gillibrand's old seat drew an unusual level of national attention, and both candidates had strong financial support from their national parties and political action committees -- mostly spent on increasingly negative television ads, which bothered supporters of both candidates.

"I'm tired of candidates telling us what's bad about the other person instead of what's good about them," said Ralph Liporace, a 53-year-old independent who voted for Murphy at the Brunswick Volunteer Fire Department.

Vincent Poleto, 21, of Brunswick, said he voted for Tedisco "because I've known him for years."
"But I'm not happy about the negative campaigning," he said.

Thanks to ongoing campaigning and get out the vote efforts, polling places and local election boards reported a 32 percent turnout of registered voters at the polls. That's respectable for a special election in which there are no statewide offices or big names on the ballot to attract more casual voters.

The Associated Press contributed to this report.