It’s true that you can easily overstate the importance of congressional special elections. Democrats won a string of them last year before a bad beat in the midterm elections. Scott Murphy’s unexpected win in NY-20 didn’t even ensure him a full term, as he lost his seat the next November. But I do think that NY-26 matters for a few reasons:

1. It’s the first election in a few years in which the Tea Party appeared to have played no role at all. Sure, Jack Davis adopted the “Tea Party” label, but his pro-choice protectionist campaign was hardly based on Tea Party themes and he didn’t get that much support. The debate became about Paul Ryan’s plan, which is to say it revolved around preserving government programs, rather than amorphous platitudes about size of government and spending. In fact, there was little evidence that the energies powering the Tea Party movement were harnessed, or even present. The public, at least in this heavily Republican district, has moved on.
2. I mentioned it earlier, but to the extent that this is the GOP’s “Scott Brown Moment” where the wheels came off the wagon, it’s a much clearer and direct case than Brown’s election was. Brown’s campaign was pretty vacuous in terms of policy and theme, but it was canny. He had a lousy opponent and a favorable environment, thanks to Democrats changing the rules for special elections and insisting that Ted Kennedy’s legacy necessitated another Democrat in the Senate. This led to a lot of bad blood that the charismatic Brown capitalized on. Nothing like that was present in NY-26–Corwin was a bad candidate, but not Martha Coakley bad. The public in NY-26 just hated Ryan’s plan, while the public in MA generally approved of Obamacare. The latter was something of a less pressing issue, though, to the state that already had universal healthcare.
3. I wouldn’t be surprised to see Republicans use this to double-down on Ryan. That’s just what they do at this point.
4. Ezra Klein has a smart take on the situation: “Republicans now need that deal more than ever. And, in particular, they need a deal on Medicare, because they need something that takes the Ryan plan off the table while putting both parties on the hook for Medicare cuts. That’s their best, and perhaps their only, chance to defuse the issue in the 2012 campaign. But a Medicare deal is hard to reach on its own terms and almost impossible so long as Republicans are also saying tax increases are off the table. Democrats aren’t going to bail Republicans out and accept painful cuts to Medicare so long as Republicans aren’t budging on taxes.” In other words, Democrats have some leverage here. I actually think that, if Republicans are willing to budge on taxes, Democrats should take a deal with some Medicare cuts, even if it takes Ryan-based attacks off the table in 2012. My rationale: the Dems are rebounding in the polls even without the Ryan Plan as the central issue (and there are plenty of other cuts to attack aside from Medicare, such as Planned Parenthood cuts, EPA funding, and so on), getting a deal is worth it on the merits, and it would have the effect of slicing a wedge into Republican politics by infuriating the anti-taxers. Either Grover Norquist will see his status diminished as the Republican Party essentially votes en masse against his pledge, or he’ll manage to defeat a deal and keep the Ryan Plan open as an avenue of attack. Or, he’ll lose and then mount a civil war against Republican supporters that will keep Republicans divided headed into 2012. Or maybe he swallows it this once, and all that’s left is a high-profile compromise that cements Obama heading into 2012. The worst-case scenarios just don’t seem that bad to me at this point. Republicans are in sort of a terrible position right now, but the elites assure me that Paul Ryan’s Plan is a great idea and that John Boehner is a tremendous Speaker, and if you can’t trust the D.C. elites…