By Steve Holland
WASHINGTON (Reuters) - An Arkansas Democrat who faced voter anger over her support for bank bailouts survived a strong challenge on Tuesday as voters in 11 U.S. states chose candidates to face off in November congressional elections.
Senator Blanche Lincoln, a moderate Democrat who has been a key figure in financial regulation legislation, was projected to have narrowly and unexpectedly defeated the state's lieutenant governor, Bill Halter.
Her win defied a "throw-the-bums-out" mood that is sweeping the United States as recession-weary voters register their disapproval with the economic record of both parties in Washington in recent years.
A Washington Post poll published on Tuesday found that only 26 percent of the public approved of the job Congress was doing and only 49 percent approved of the way their own U.S. representative was handling the job.
Those numbers are worse than in 1994, when Republicans recaptured control of the U.S. Congress for the first time in 40 years.
Republicans are poised to take away seats from President Barack Obama's Democrats in the U.S. House of Representatives and the Senate in the November 2 election. All 435 House seats are up for grabs and 36 of the Senate's 100 seats.
In California, two women who are former corporate CEOs, Carly Fiorina and Meg Whitman, were coasting to victory in Republican primary races for a chance at state-wide offices.
Television network MSNBC said billionaire political novice Whitman, a former eBay Inc chief executive, has won the Republican nomination for governor and will face Democrat Jerry Brown in the race to succeed Arnold Schwarzenegger.
Former Hewlett-Packard chief Fiorina appeared headed to victory to face incumbent Democratic Senator Barbara Boxer.
The California governor's race is on track to be the most expensive campaign in U.S. history outside a presidential contest, with the two Republican candidates alone spending more than $100 million in the primary.
The Republicans in both races are battling over who is a true conservative candidate, a key issue in California where unemployment is at a modern record 12.6 percent and the state government has a $20 billion budget gap.
HEAT OVER BANK BAILOUTS
Feeling political heat in Arkansas over the bank bailouts, Lincoln authored a provision that would force banks to spin off their swaps desks, which potentially could cost them billions of dollars in revenue. Her proposal is one of the most controversial elements of a financial regulation reform to be negotiated in Congress this week.
A defeat of Lincoln would have extended Obama's losing streak. In the past months he has backed Democratic candidates in races in Pennsylvania, New Jersey, Virginia and Massachusetts and all have lost.
Lincoln survived a multi-million-dollar ad campaign paid for by unions and liberal groups who sided with her opponent Halter, who argued that she had grown out of touch with her home state.
"I have heard your message," Lincoln told a victory rally in Little Rock. "Washington needs to work for us in Arkansas," she said.
She faces a tough November election against the Republican candidate, John Boozman, but she will have the support of Obama and former President Bill Clinton, who is from Arkansas and campaigned for her last week.
In Nevada, Senate Majority Leader Harry Reid, a Democrat facing an uphill battle for re-election in his home state, could get a boost if Republicans elect a conservative "Tea Party" candidate to face him.
Reid would likely see a way to stave off defeat if Nevada Republicans choose Tea Party favourite Sharron Angle.
Angle had an early lead in the voting over Republican establishment candidate Sue Lowden.
In South Carolina, Republican state representative Nikki Haley won the party's primary vote but fell just short of the 50 percent needed to avoid a runoff.
Haley has denied allegations from two Republican operatives that she had engaged in adultery with both of them. This came in a state where voters were shocked last year by Republican Governor Mark Sanford's affair with an Argentine mistress that broke up his marriage.
(Additional reporting by Peter Henderson and Jim Christie in San Francisco; Editing by Alistair Bell and Anthony Boadle)
