“must win” for the Democrats to keep a majority in the Senate, and her apparent victory now assures Democratic control regardless of the outcome in other close Western state races.

Nonpartisan polls have shown Boxer up by as much as 10  points in the days leading up to the election, but she was taking no chances as she rallied voters at Oakland’s Jack London Square yesterday.

“You are sending me back to fight for the middle class, to fight for jobs, to stand up against the special interests,” Boxer said. “My opponent wanted to create jobs in China, but I want to create jobs in Concord, Chula Vista and Chino.”

Republicans are expecting to take control of the House of Representatives and pick up seats in the Senate, which would force President Barack Obama to preside over a divided government in 2011. For Democrats, even prospects of a slimmer majority in the Senate would represent something of a consolation prize on a night where Republicans are expected to win big victories in governors’ races as well .

“There’s some that say it’s better if Obama can blame a Republican Congress for failure to get things done, and that saving the Senate won’t help you much,” UC Berkeley political science professor Rob van Houweling said. “But Obama is already having tremendous problems with appointments, and a new Republican majority in the Senate would make it even harder.”

Republican candidates identifying with the party’s more conservative Tea Party wing are leading in a number of Senate races, including in Colorado, Florida, Nevada and Pennsylvania—states Obama won in 2008. Boxer’s opponent, Republican Carly Fiorina, has courted Tea Party support, but appears headed for defeat.

Severe recession and economic dislocation are dragging on Democratic candidates across the country. Voters have confronted a national unemployment rate of more than 9 percent for most of the Obama administration, including a 9.6 percent unemployment rate on Election Day. If Boxer wins, she’d overcome the electoral handicap of California’s 12.4 percent jobless rate.

While the West Coast economy suffers from many of the same problems as the rest of the country, Boxer is capitalizing on other issues. she chairs the Senate committee overseeing the environment, an issue that resonates strongly with California voters. In addition, Boxer’s opponent Fiorina has expressed pro-life views in a state where more than 70 percent of voters support abortion rights, according to the most recent Field Poll. Fiorina has also had to defend her record as the former CEO of Hewlett-Packard at a time when voters hold big business in low esteem.

The president’s party often loses Senate seats during a midterm election (1998 and 2002 were recent exceptions), but severe economic dislocation will likely exacerbate Democratic losses in this election. Critics of the Democratic campaign strategy have suggested that Obama could have created a greater economic stimulus package in 2009, but Berkeley political science professor Eric Schickler said fundamental weaknesses in the economy were almost inevitably going to affect Democrats’ electoral fortunes.

“Maybe with a bigger stimulus you would have ended up with 9.1 percent unemployment instead of 9.6 percent, but all people would see is the 9.1 percent unemployment rate anyway,” Schickler said. “Financial recoveries are slow, so some losses for the majority party are already baked into the cake.”

“Not only is California’s credit rating the lowest in the United States, but we are ranked behind Kazakhstan, Mexico and many others,” Lockyer told a Political Science Association audience on the UC Berkeley campus last night. “We’re rated low, and that adds to our borrowing costs.”

California’s legislative session ended on August 31, with members of the Assembly and Senate unable to close a $19 billion deficit in California’s proposed $90 billion 2010-2011 budget. With outgoing Governor Arnold Schwarzenegger threatening to veto any budget that misses his goals on taxes and spending, California may be without a budget until well after the Nov. 2 election. The state has missed its June 15 budget deadline in 23 of the last 24 years, but previous budget impasses have never lasted past mid-September.

Lockyer didn’t say when he expected the budget to pass, but explained that the delay is exacting a price on the state. “It’s in the neighborhood of $50 million to $55 million more money that is spent every day than would be spent if the budget were adopted,” he said.

California’s constitution requires both the Senate and the Assembly to pass a budget by a two-thirds vote, making the state one of only three that require a “supermajority” to approve a budget. Even though Democrats have a large majority in both California houses, two Senate Republicans and five Republican Assembly members would have to vote with the Democrats in this session for a budget to pass. That hasn’t come close to happening.

The November’s ballot contains one possible long-term solution to this nearly annual legislative logjam, Lockyer said. Proposition 25 would enable the legislature to pass a budget by a majority vote and would penalize legislators for not meeting a budget deadline.

“One of the things I like about it is that if legislators don’t adopt a budget on time, they don’t get paid,” Lockyer said. “They forfeit their salaries for every day that there’s a stalemate.”

The treasurer was less optimistic about potential budget-balancing revenue from Proposition 19, the November California ballot initiative that calls for the legalization and taxation of marijuana. While Lockyer supported the legalization of medicinal marijuana during his 1990s tenure as California’s attorney general, he has joined the majority of statewide officials and candidates for state office—including Diane Feinstein, Barbara Boxer, Meg Whitman and Jerry Brown—in opposing Proposition 19.

“I don’t think legalizing marijuana would produce economic results and tax results that are substantial,” Lockyer said. “There are some economists who think there could be substantial public health costs with marijuana legalization.”

In a year when California expects competitive statewide elections for governor, lieutenant governor and attorney general, Lockyer is expected to easily win his bid for a second term as treasurer. While he supports fellow Democrat Jerry Brown in the governor’s race, he doubts Brown or Meg Whitman will change California’s byzantine budget process.

“But the thing that make me chuckle about Meg is that she controlled a small Board of Directors at EBay,” Lockyer said. “As governor, she’d have 120 legislators that hate her guts and think they can do a better job. That promises some interesting things out of Sacramento.”