Democrat Gary Peters is being targeted by the Koch PAC for his support of Obamacare.

DEMOCRATS ARE FACING their toughest Michigan Senate fight in two decades.

A sour national political climate, a little-known candidate and big spending by conservative outside groups have given Republicans a real shot at winning an open seat and boosted their chances at seizing Senate control.

Republicans had all but written off the Democratic-leaning state last summer after they failed to recruit either Representative Mike Rogers (R-Mich.) or Representative Dave Camp (R-Mich.) to run, leaving them with former Michigan Secretary of State Terri Lynn Land (R) as their nominee.

But President Obama’s dismal poll numbers, millions spent by conservative groups and Land’s high name recognition compared to Representative Gary Peters (D-Mich.) have given her a small lead in most recent public polling. Land is also building a big campaign warchest, and has $3.3 million to Peters’s $3.4 million. Michigan also behaves a lot more like a swing state in midterm elections than presidential years.

“The race is close. It will be close. Off-year elections here are often close,” says Michigan-based pollster Ed Sarpolus.

Some Democrats are nervous.

“This is a national race. If we lose Michigan, it’s over for us controlling the Senate,” said one Democrat involved in the race. “This race has become more competitive… We have to take this campaign to a different level now.”

Democrats also worry privately about infighting beteen the state’s unions, which Democrats rely on more in Michigan than anywhere else, and former Representative Mark Schauer’s (D-Mich.) struggling gubernatorial campaign.

Most believe the race is still Peters’s to lose, however. No Republican has won a Senate race in Michigan since 1994, and Democrats think Land’s small edge in the polls is due mostly to her position as former statewide official. They say when both sides begin spending in earnest Peters will bounce back.

Americans for Prosperity, a group backed by conservative billionaires Charles and David Koch, has already spent $2 million blasting Peters for his ObamaCare support.

Those attacks went unanswered for two months until the pro-Democratic Senate Majority PAC launched $450,000 worth of ads tying Land to the Koch brothers in late February. Democrats admit the ads hurt Peters some in the polls, and served as a wake-up call for donors and activists in the state.

“The Kochs beating up Gary was a big deal,” said the Michigan Democratic strategist. “This race is absolutely in a different place than it was before… For the first time people are saying ‘this is going to be more work than we thought.’”

President Obama’s approval rating and ObamaCare’s early struggles are also taking a toll. Obama’s approval rating has hovered slightly above 40 percent in most polls in a state he won by 9 percentage points in 2012.

Peters recently replaced his campaign manager, bringing in Paul Tencher, a well-regarded Democratic tactician who helped Democratic Senator Joe Donnelly pull off his come-from-behind 2012 win.

Tencher, who’s leaving the Democratic Senatorial Campaign Committee, acknowledged the high stakes.

“Michigan is an important state. It’s a real middle-class place that Democrats fight for and is essential to our mission,” he was reported to have said. “And keeping the majority is a very important thing, not only for Americans but for working-class people here in Michigan.”

Peters has been hitting Land for the Koch ads, attacking her for supporting a new Michigan law that bars insurance companies from covering abortion in most cases, and ripping her for opposing the auto bailout many in Michigan believe helped Michigan avoid major job losses.

Land’s campaign plans to rip Peters for his support of Obama’s priorities, including ObamaCare, climate change legislation and the stimulus.

“The number one thing in Michigan is jobs and the economy, and Congressman Peters’s record is riddled with expensive, failed economic policies like the stimulus bill,” says Land spokeswoman Heather Swift. “Terri, as a mom and a small business owner, has the right ideas for Michigan families.

The race could hinge on how well Land presents herself when the race engages in earnest and she comes under closer scrutiny. She has kept a very low profile, mostly avoiding the press, and when she has talked publicly has committed minor gaffes.

“She misspeaks,” Sarpolus said. “For the last several months they have been hiding Terri Lynn Land, they haven’t been putting her out there and letting her speak. She has a history of making misstatements.”