* High stakes in elections in "orphan" congressional districts
* Rep. Walsh vs. Democratic Iraq War veteran among key races
* Both parties create programs to fund vulnerable incumbents
By Samuel P. Jacobs
SCHAUMBURG, Ill., May 23 (Reuters) - Republican Representative Joe Walsh was campaigning recently at a diner in this Chicago suburb when he came across an elderly woman who rebuffed his charms.
"You're tough. Shake the hand!" the energetic House freshman said, before asking: "Who got us into this mess?"
"Republicans," the woman answered, without missing a beat.
Walsh is no stranger to opposition. Backed by the conservative Tea Party movement, he was elected in 2010 by just 292 votes (out of more than 202,000 ballots cast) and joined a class of first-term Republicans whose resistance to compromise was a hallmark of a dysfunctional Congress.
Now he is in one of the nation's most-watched congressional races, facing Tammy Duckworth, a decorated Iraq War veteran backed by Democratic President Barack Obama's closest allies.
The battle in Illinois' 8th District is among several that will reshape Congress while unfolding beyond the glare of the presidential race between Obama and Republican Mitt Romney, who will focus mostly on 10 other politically divided states that are likely to decide who wins the White House.
Aside from attending fundraisers, Obama and Romney are unlikely to spend much time campaigning in Illinois, California and New York. Those states are widely seen as solidly in Obama's column for the Nov. 6 election and they are where vulnerable U.S. House incumbents - mostly Republicans - face big challenges.
The story is similar in more conservative states such as Kentucky and Georgia, where Romney is expected to win in November and where a few Democrats fighting to stay in Congress are unlikely to get much help from Obama.
House Speaker John Boehner, an Ohio Republican, calls them "orphan districts" - places where embattled House incumbents will not be able to feed off the attention that is generated when their party's presidential contender visits their district.
These districts may be out of the limelight but they are hardly forgotten.
The stakes are such that both parties have created programs to direct funds to vulnerable incumbents in the districts. Meanwhile, independent "Super PACs" that are preparing to spend millions of dollars on congressional races are planning ad campaigns to attack and support candidates in "orphan" districts.
Boehner has warned his party about the vulnerability of Walsh and other Republicans in mostly Democratic states.
Democrats need to gain 25 seats to retake control of the 435-seat House, a feat most analysts say they will not achieve.
But if there is a narrow path for Democrats to win back the House, it will run through states that are relatively distant from the heat of the 2012 presidential campaign.
"We have 50 (Republican) members in tough races, 89 freshmen running for their first re-elections, and we have 32 that are in states where there is no presidential campaign going to be run," Boehner recently told Fox News. "You take 18 of them, (in) California, Illinois and New York, where you know we're not likely to do well at the top of the ticket. Those districts are frankly pretty vulnerable."
Both parties have created programs to direct campaign funds to vulnerable incumbents.
Of the 34 Republican incumbents receiving money under the party's Patriot program, 20 are in states outside the key battleground states in the presidential race: Virginia, North Carolina, Florida, Ohio, Nevada, Pennsylvania, Colorado, Iowa, Arizona, and New Hampshire.
A similar program for vulnerable Democratic incumbents, known as Frontline Democrats, is helping to fund 17 House members - eight from states that are not key battlegrounds in the presidential race.
Thanks to the uncertain economy, Republican strategists believe Obama's presence on the ballot will not have the same impact as in 2008, when he rode a wave of support among youths and minorities to become the nation's first black president.
At the same time, Republicans acknowledge that they probably will not repeat their success in 2010, when they picked up 65 House seats, the biggest shift in that chamber since 1938.
"We're realists," said Guy Harrison, executive director of the National Republican Congressional Committee. "We know that it may not be 2010. But it's definitely not going to be 2008."
For Democrats, the fight to unseat Walsh is a key part of making up for the debacle of 2010.
"Illinois will be pivotal to our prospects of gaining the majority in the House," said New York Representative Steve Israel, chairman of the Democratic Congressional Campaign Committee.
'HAPPY-GO-LUCKY IRISH BOY'
In Illinois, Obama's home state, Democrats like their chances in four congressional districts that were won by John Kerry and Obama in the last two presidential elections but that now are represented by Republicans - three of them elected in 2010.
Three of the districts are in the Chicago suburbs and of those the most compelling contest is between Walsh and Duckworth.
A community of well-kept lawns and Saturday morning Little League baseball games, the 8th District emerged from the recession with unemployment rates well below the national average. Despite Democrats' hold on Chicago, the district's communities often vote Republican.
Walsh, 50, a former teacher and investment banker, channeled the Tea Party movement's aggressive brand of dissatisfaction two years ago in knocking off Democratic incumbent Melissa Bean.
"There's very little subtle about me," Walsh said during a debate against Duckworth.
Walsh is known for sleeping in his Washington office. When he campaigns, he drives around with his dog Bella in a 1984 motor home, featuring signatures from supporters on the outside and shag carpeting inside.
At a town hall meeting in Bloomingdale last week, Walsh yelled about the threat created by the federal debt. He said his sunny disposition has been changed by the times.
"I'm a happy-go-lucky Irish Catholic boy," Walsh said. "This is not me."
'I SHOULD BE DEAD'
While Walsh stresses the ills of government, Duckworth speaks about the good it can do.
A former U.S. Army helicopter pilot, Duckworth, 44, lost both her legs and part of her right arm when a rocket-propelled grenade hit her Black Hawk helicopter in Iraq in 2004.
"I should be dead," Duckworth told supporters recently. "I took an explosion in my lap. My buddies triaged me as dead."
As she talked, Duckworth tucked one titanium leg, painted with the colors of the U.S. flag, under the other, which is painted with a camouflage design.
Since leaving the Army, Duckworth ran unsuccessfully against Republican Rep. Peter Roeskam and served in the Illinois and U.S. Veterans Affairs departments. In an interview, Duckworth recounted being in Washington last spring, preparing to help close the V.A. under the threat of a government shutdown.
"I was sitting in my office in Washington when Joe Walsh and the Tea Party tried to shut down government" in a standoff over the federal budget, she said. "It pissed me off."
BACKING 'A FIGHTER'
In congressional districts where the presidential campaigns have little presence, independent groups - including those known as "Super PACs" - are starting to direct hundreds of thousands of dollars to support and attack candidates.
This month, the U.S. Chamber of Commerce began airing ads in 17 House districts. In all cases but one, the ads were aimed at boosting Republicans or attacking Democrats. Seven of the ads are airing in New York.
"The parties' preoccupation with the presidential (race) will make many of these orphan seats a more attractive place for outside groups to invest," said Jonathan Collegio of the conservative American Crossroads PAC, which plans to spend up to $100 million to boost Republicans in congressional races.
A much smaller operation, the CREDO Super PAC, is targeting what it sees as "extremist" Tea Party conservatives and has set up an office in Walsh's district.
"He's too crazy to be in office," said CREDO President Becky Bond, whose group plans a modest local campaign against Walsh.
Some voters in Walsh's district like his spirit.
After meeting Walsh at Checker's Pancake House in Schaumburg, Pat Kole, 58, who recently lost her job as an administrative assistant, said Walsh had her vote.
"I don't know what he's done," she said. "But I know he's a fighter." (Editing by David Lindsey and Bill Trott)
Congressional Battles Rage Away From Presidential Spolight