The AIG bonuses flap has become an issue, not just for President Obama and Sen. Chris Dodd, but for Democrat Scott Murphy, who is currently running a tight race against Republican Jim Tedisco in the March 31 special election to fill newly appointed Sen. Kirsten Gillibrand's (D) old House seat in upstate New York. Tedisco and the National Republican Congressional Committee (NRCC) have hammered Murphy--a venture capitalist by trade--for approving bonuses for his own employees and, policywise, for supporting the stimulus bill, whose provision on executive bonuses exempted previously contracted payments (and thus, AIG's bonuses) from its restriction.

This has been the strategy for the NRCC across the board: tie Democrats to the stimulus and its bonuses provision and suggest that, in backing it, they also backed the AIG bonuses. Murphy, who supported the stimulus, has said the bonuses are disgraceful and now backs a House plan to tax them. He is facing the brunt of the GOP's stimulus/bonuses/AIG mode of attack right now.

Other Democratic House candidates don't have to deal with stimulus/AIG attacks too directly yet; their elections are a ways off. But Murphy's strategy can give us a window into how Democrats will respond to the GOP's AIG criticism.

Murphy's response: talk about jobs and criticize the financial bailout. When asked if the stimulus was a good bill despite its bonus provision, Murphy recently said "absolutely"--a quote circulated today by the NRCC. An official with the Murphy campaign told me today that "absolutely we supported the stimulus, and it has been the defining issue in this race...people are more concerned about shovel ready jobs that need to put people back to work." So that, it seems, is step one in Murphy's response strategy: when blasted for the AIG bailouts, remind people about the need to create jobs.

He also opposes the $700 billion financial bailout Congress passed in the fall--the "Bush bailout" as the Murphy official called it--and thus seeks to distance himself from the notion of giving money to financial firms. Those two pieces of his messaging strategy complement the overarching Democratic "party of no" criticism, which he leveled at Tedisco in a recent ad, and a hope that Tedisco's AIG-based criticism self-destructs (see this criticism from an upstate paper, circulated today by Murphy's campaign).