The Oregonian is now projecting Jeff Merkley will defeat Republican Gordon Smith for the U.S. Senate seat. No Oregon Senator has lost as an incumbent in 40 years.

Democrat Jeff Merkley has leapt from Oregon's statehouse to the U.S. Senate, ousting two-term Republican Gordon Smith after an expensive, high-stakes contest that will help shift the balance of power in Washington.

The Oregonian projects that Merkley will squeak by Smith by the time all votes are counted.

Merkley, a five-term state lawmaker and former Habitat for Humanity director, took advantage of a surge of Democratic support to win the bitterly fought battle with Smith, a Pendleton frozen food magnate who also rose from the Oregon Legislature.

Jeff Merkley was backed by some fine people, including his wife Mary Sorteberg and the man pictured with them below.

Major h/t also to Jeff Merkley's tireless netroots director Sarah Lane. And the folks over at Blue Oregon for their fabulous work.

It was looking grim early last night for Jeff Merkley in his race to unseat Republican Sen. Gordon Smith of Oregon, but that was mostly because the Multnomah and Lane counties hadn't been counted much yet.

Those counties started coming in this afternoon and evening, and the trend is so strong in his favor (at last check, Merkley had about a 10,000-vote lead, and growing) that the Oregonian has called it for him.

Congratulations, Senator Merkley. Thanks to you and your awesome staff for all your hard work. And Democrats have just inched a tad closer to a filibuster-proof majority.

In his speech Tuesday night in Iowa, Barack Obama took the fight to John McCain hard, tying him directly to President Bush's failed policies and slamming him on everything from lobbyists and Iraq to health care and tax cuts.

Download | play Download | play

"This year’s Republican primary was a contest to see which candidate could out-Bush the other, and that’s a contest that John McCain won.

"Now, I will leave it up to Senator McCain to explain to the American people whether his policies and positions represent long-held convictions or Washington calculations, but the one thing they don’t represent is change."

You can watch the entire thing here, which includes this line, by far my favorite of the speech:

"No matter how this primary ends, Senator Clinton has shattered myths and broken barriers and changed the America in which my daughters and your daughters will come of age, and for that we are grateful to her."

Full transcript below the fold:

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