A loss for Democrat Alexi Giannoulias, now the Illinois state treasurer, would rub salt in what already was expected to be a deep political wound for the president in the Nov. 2 congressional election. Democrats are widely expected to lose their majority in the House of Representatives and, perhaps, the Senate.

“All my friends in the house!” Obama shouted to cheers at the Drake Hotel at the first of two campaign events expected to net more than $750,000 for Giannoulias and other Democratic Senate campaigns.

“I hope you’re fired up in these last few weeks,” he said. “It’s up to you to defy the conventional wisdom once again.”

Obama and the Democrats are battling voter anger over anemic economic recovery, stubbornly high unemployment and a continuing implosion of the housing market that has wiped out billions of dollars of wealth among average Americans.

Thursday’s appearance for Giannoulias, who is statistically tied with Republican candidate and five-term member of Congress Mark Kirk, marked the second time Obama has pumped for money and votes for the Democratic candidate.

First Lady Michelle Obama also was to make a campaign stop in the state later this month on a 12-day national swing in support of Democrats.

Republican state chairman Pat Brady, not unexpectedly, predicted Kirk would take Obama’s former seat, calling it a historic turn around from the last balloting in Illinois where Democrats swept all statewide offices.

Both candidates, however, are hamstrung by political distractions.

A Giannoulias family-run bank collapsed and had loaned money to Chicago political figure later convicted of influence peddling and to a family accused of having ties to organized crime.

More recently it was disclosed that Giannoulias took a $2.7 million deduction, claiming on his federal tax return that he had worked 500 hours at the family bank in early 2006. He had told voters he was largely gone from the bank by then. The deduction reduced Giannoulias’ income to the point that he paid no federal income taxes last year.

Kirk, meanwhile, has been caught inflating his military background. He is a member of the US Naval Reserve and has claimed he had been named Navy Intelligence Officer of the Year. That was not true. He is also suspected of exaggerating the dangers he faced in flying missions over Iraq before the war began in 2003.

If he wins, Kirk would join Sen. Richard Durbin, the No. 2 Democrat in the upper chamber and a key Obama ally, in representing Illinois.

Michael Daly, who runs the Durbin operation in Illinois from an office in Chicago, said he believed Kirk would not win despite heavy TV advertisement spending from a group run by Karl Rove, who was former President George W. Bush’s top political adviser.

Rove’s organizations have pumped $2.2 million into the state in a bid to deny Democrats the former Obama seat.

Kirk “is caught in the tea party nut cracker, has been a feckless fundraiser and doesn’t seem to work very hard,” Daly said. His reference to the tea party alludes to the problem many Republicans are facing this year, where the ultraconservative movement is applying pressure on candidates to assume far right positions that are outside the comfort zone of mainstream Republican voters.

While his popularity has declined in Illinois, as it has nationwide, Obama remains a strong drawing card for fellow Democrats. The president won’t visit his former chief of staff, Rahm Emanuel, who left the White House last week to run for Chicago mayor in next year’s election, but Obama also appeared with Illinois Governor Pat Quinn.

Quinn, who took over when Rod Blagojevich was impeached over charges that he tried to sell Obama’s seat to the highest bidder, trails a Republican challenger in the polls.