Incumbent Senators of both parties are girding for a rocky November, with midterm campaigns increasingly dominated by voter outrage over government spending, federal debt and Washington bailouts traceable to before the 2008 elections and the Troubled Asset Relief Program.

Members and political strategists on both sides of the aisle agree that the TARP legislation sparked the furor at Washington, D.C. — and what happened since only served to fuel voter disgust. Even Democrats cite federal spending and government bailouts as among the major issues moving voters in the 2010 elections, but the two parties disagree about who’s to blame and who is positioned to capitalize on Nov. 2.

“I think it’s part of the greater concern people have about spending, and it’s understandable,” Democratic Senatorial Campaign Committee Chairman Bob Menendez (N.J.) said, discussing voters’ frustration with the nation’s capital. “People forget that all of this took place in the last era of the Bush administration.”

Despite predictions of significant GOP gains in the House and Senate in the midterm elections, Republicans concede that they’re not immune from the voters’ wrath, as illustrated by Sen. Bob Bennett’s ouster. Bennett, a Utah Republican who voted for TARP, finished third in a vote of 3,500 delegates at Utah’s GOP nominating convention last weekend and failed to qualify for the June 22 statewide primary ballot.

But Republicans argue that they remain better positioned to profit from voter unhappiness in the general election, given the policies pursued by President Barack Obama and Congressional Democrats since George W. Bush left the White House. Republicans cite three items as highly problematic for Democrats: greater government intervention in various industries, particularly health care; the $787 billion economic stimulus; and a misuse of TARP to subsidize bailouts beyond what was intended.

“Democrats are pretty vulnerable for basically unapologetically continuing the bailouts,” National Republican Senatorial Committee Chairman John Cornyn (Texas) said.

The $700 billion TARP legislation was proposed by the Bush administration in September 2008, on the heels of the collapse of a major Wall Street brokerage and investment firm, and sold to Congress as necessary to prevent an economic calamity worse than the Great Depression. Under the program, the federal government was to purchase troubled assets from financial institutions.

The legislation received broad bipartisan support. But the vote was highly controversial, and it nearly cost Senate Minority Leader Mitch McConnell (Ky.) and other Republican incumbents their re-elections. The same way the political atmospherics this cycle are benefitting Republicans, the climate in 2008 was favorable to Democrats, and thus the party’s incumbents that year suffered little from their TARP vote.

[IMGCAP(1)]With voters keenly focused on government spending, the federal deficit and Washington intervention to save two automobile manufacturers and some big banks, a Member’s TARP vote remains politically charged.

Those who supported the legislation, including Sen. Orrin Hatch, discuss it gingerly. The Utah Republican is up for re-election in 2012 and is already targeted by some Republicans at home. He stands by his vote, but he makes it clear it was a difficult one and that he empathizes with angry voters.

“People are mad. They are mad at Washington. They’re mad at big government,” said Sen. Sam Brownback (R-Kan.), who did not vote for TARP and is retiring to run for governor. “I think it started probably with TARP, and then with Obama’s health care bill it just went into flaming mad.”

Most incumbents and political strategists see the political playing field as defined by the issues that have loomed large since TARP — concerns about the federal debt, the size and scope of government, and hot-button issues such as unemployment and health care reform. One Republican strategist who monitors House races said public polling suggests that Obama’s $787 billion stimulus package generated more voter anger than TARP.

Sen. David Vitter (R-La.), who is running for a second term against Democratic Rep. Charlie Melancon, said people are “angry about an expansion of government power” generally. And Sen. Barbara Boxer (D-Calif.) and Democratic Conference Secretary Patty Murray (Wash.), who could face tough re-election battles this fall, say jobs and economic security loom above all other issues as top voter concerns.

But others view TARP as casting a longer shadow, contending it could sway a significant number of votes this year.

One Democratic consultant tells candidates challenging Republican incumbents who supported TARP in 2008 to make their vote a campaign issue. This same consultant represents Democratic incumbents who voted for TARP and is working to minimize their exposure to criticism. “To the American people, TARP is the poster child vote for what is wrong with Washington,” the consultant said.

Sen. Ron Wyden, who is running for re-election this year, maintains that TARP continues to be a politically volatile issue at the forefront of an angry electorate. The Oregon Democrat called his vote against TARP one of the most important actions of his Senate career. Wyden declined to criticize his colleagues’ “yes” votes. But like the Democratic consultant, he views the legislation as symbolic of what voters are angry about when it comes to their hostility to Washington.

“There is no doubt, the original TARP vote continues to be a very powerful issue in the politics of 2010,” Wyden said. “I consider my vote against TARP to be one of the most important votes I’ve cast in my public service.”