By Annie Johnson, CQ Staff

Oregon’s House Speaker Jeff Merkley narrowly defeated political activist Steve Novick early Wednesday for the chance to unseat moderate incumbent Gordon H. Smith , the only Republican holding statewide office in Oregon.

Merkley, the handpicked candidate of the Democratic Senatorial Campaign Committee, engaged in a spirited primary with Novick, who is best known for leading an effort in 2006 to defeat a conservative anti-tax ballot initiative.

With 75 percent of the precincts reporting (before the state stopped counting the vote until morning), Merkley was leading with 47 percent of the vote (202,080) to Novick’s 41 percent (182,540), with the rest going to other candidates.

According to the Portland Oregonian newspaper, Novick’s concession speech “recited a long list of advantages Merkley enjoyed during the campaign. ‘Look at what they had to throw at us,’ he said.”

But the paper added that Novick praised Merkley for “the great job” he did as House speaker and endorsed him: “He’s going to be a great United States senator, and we’re going to help him.”

In his victory speech, Merkley immediately turned to the fall campaign. “Tonight is our night because together we have stepped forward to put America on the path to change,” he said, adding that “we have stepped forward to put George Bush and Gordon Smith on the path to retirement.”

Novick ran a strong race that surprised many in the state. A first-time candidate, the 4-foot-9-inch Novick ran television ads during the primary for “Left Hook Lager,” poking fun at the hook that replaces a left arm he was born without.

Merkley won despite the Smith campaign’s television and radio ads that ran during Oregon’s vote-by-mail primary process. They attacked Merkley as too partisan and for taking money from lobbyists when he had pledged he would not.

“He’s running scared of Merkley,” campaign spokesman Matt Canter said, and the campaign ran ads in response. One such spot featured Brynne Merkley, the speaker’s young daughter, sitting at the breakfast table as her father tells her Smith represents special interests in Washington.

Merkley, who was the first Democratic speaker in Oregon in 16 years, will face a lot more heat from Smith, who already has almost $5 million on hand to defend his seat. Merkley, the son of a sawmill worker, has just over $150,000, through April 30, according to the most recent filings with the Federal Election Commission.

Smith, in an attempt to appeal to famously independent Oregon voters, has also publicly separated himself from the policies of the Bush administration, presenting himself as a bipartisan thinker. For example, while Smith voted to authorize the Iraq War in 2002, by December 2006 he was on the Senate floor telling colleagues that “tactics have failed” in Iraq. A personable moderate, Smith won in 2002 with 56 percent of the vote.

But Democratic party leaders are hoping that the mood invoked by the presidential candidates will only help Merkley’s chance at unseating Smith. The Democrats have carried the state in the past five presidential contests. Democratic nominee Al Gore defeated Republican George W. Bush there by just half a percentage point in 2000, but his margin may have been reduced by the 5 percent of the vote claimed that year by liberal activist Ralph Nader running on the Green Party ticket. Democrat John Kerry won the state in 2004 by a four points.

CQPolitics rates the November race as Leans Republican, making it a competitive race.