To play or not to play, that is the question. Democrats began this year holding 257 seats in the House, a majority so large that the party can afford a few defections here and there, or even the loss of a seat in a special election.

[IMGCAP(1)]Kirsten Gillibrand’s appointment to the Senate has put one of those Democratic seats at risk, and party strategists have to decide how far they’ll go to try to hold it.

Should the Democratic Congressional Campaign Committee invest substantial resources in that contest, risking making it a referendum on the first months of Barack Obama’s presidency and Speaker Nancy Pelosi’s (D-Calif.) House leadership? Or should the DCCC keep expectations low by doing little more than it has already done for its nominee?

The district starts just outside Poughkeepsie and stretches all the way north along the state’s eastern border up to Lake Placid, and also includes an arm south of Albany that runs west toward Binghamton. It’s a sprawling district by New York standards, the state’s second-largest geographically.

While Republicans hold a voter registration advantage in the district over Democrats, and George W. Bush carried the district 54 percent to 46 percent in 2004, it went for Obama in 2008 by between 3 and 6 points, depending on whose numbers you believe.

And the GOP enrollment advantage in the district has been falling steadily over the past few elections, from 88,667 in November 2004 to 82,737 in November 2006 to 70,632 last year.

Gillibrand won the House seat initially in 2006, aided by a GOP incumbent who proved to be a magnet for bad media coverage. More impressive than that victory, however, was Gillibrand’s re-election last year.

She beat challenger Sandy Treadwell (R), a personable, wealthy one-time Republican state party chairman, by 75,000 votes (58 percent to 35 percent). Gillibrand ran ahead of Treadwell in each of the four full counties and six partial counties that make up the district.

Knowledgeable observers agree that talk of the GOP registration advantage in the district misses the point, ignoring the fact that party registration is a lagging indicator. Indeed, private polling confirms that the district’s current generic partisanship is much closer to even than the registration numbers suggest.

The Democratic nominee, businessman Scott Murphy, has already received the backing of the state AFL-CIO and won the Independence Party line, which Gillibrand did not have in 2008. The DCCC has been airing radio ads in the district, and the committee’s national press secretary, Ryan Rudominer, has been in the district for weeks, ever since Murphy stumbled out of the gate.

A Siena College poll conducted February 18-19 showed the Republican nominee, state Assembly Minority Leader Jim Tedisco, leading Murphy by 12 points, 46 percent to 34 percent. Other polling generally confirms the Siena numbers and finds Tedisco ahead but not over the 50 percent mark.

Tedisco’s lead isn’t unexpected, considering that he has represented part of the district in the New York State Assembly for 25 years, the last few serving as Minority Leader. Murphy, on the other hand, hasn’t held elective office. A venture capitalist or a Wall Street executive, depending on your partisan point of view, he has worked as an aide for two Missouri Democratic governors.

Both nominees have some baggage — with Tedisco it’s his long voting record, association with Albany and refusal to take a clear stand on the stimulus bill, while for Murphy it’s business tax liens, writings and statements while in college, and association with Wall Street — so the final month should see plenty of sparks fly.

Some Democrats are privately skeptical about their party’s chances of winning the special election, arguing Tedisco’s initial advantage will be difficult to overcome. But others counter that Tedisco has plenty of baggage, Murphy has a good profile and the district is now almost even in partisan identification, giving Murphy a real shot at an upset.

Republicans believe that they have the advantage in the race, but President Obama’s job ratings in the district remain sky-high, and they don’t believe that the victory is already in the bag.

The fact that the National Republican Congressional Committee just bought a substantial amount of time for an Albany TV buy confirms that GOP operatives believe they are in a serious fight.

Money is also a consideration for Democrats. The DCCC has a debt of $16.5 million coming out of the 2008 elections, but the campaign committee raised $3.5 million in the first month of this year, and it showed $2 million on hand at the end of January — surely enough to play in the special election if party strategists want to.

Right now, Democrats want to have it both ways — emphasizing the difficulty of holding the seat and dismissing a Republican victory in this district as no big deal while still keeping their options open and inching toward making a big bet on Murphy.

The most important question may be this: How have things changed since November? The answer is “not much.— Obama is very popular in the district, the GOP brand damaged and Democrats have another young, outsider nominee. They don’t, however, have the popular Gillibrand on the ballot.

It’s true that House Democrats could afford to lose this seat and it wouldn’t affect them at all on Capitol Hill. But I suspect the DCCC won’t be able to resist taking a flier on Murphy, considering the district’s recent voting history, Tedisco’s long legislative record and the prospect of forcing Republicans to go “all in— on a race that the GOP simply cannot afford to lose.

Tedisco has the edge, but this race could be much closer than many observers expect, especially if the DCCC jumps in.

Stuart Rothenberg is editor of the Rothenberg Political Report.