The seven-term congresswoman from Madison built her campaign around the argument that the 70-year-old Thompson no longer spoke for Wisconsin residents.
Baldwin noted that the four-term governor, who hadn't been on a ballot in 14 years, made millions of dollars in the private sector off connections he made while governor and U.S. health secretary.
Thompson had attacked Baldwin as too liberal for Wisconsin, focusing on her position on health care reform.
Baldwin said Thompson called her Tuesday night to "cordially congratulate her."
Baldwin delivered a victory speech in Madison shortly after 11:00 p.m. Tuesday, saying:
"Tonight, at the end of a long and hard-fought campaign, we have won a huge victory for Wisconsin’s middle class! That’s what this has been about since I started this journey 14 months ago. Everywhere I’ve gone in our beautiful state, people have told me that they want a Senator who will listen to the middle class when they need help, a Senator who will stand on the side of the middle class, a Senator who will wake up every morning and fight for the middle class. Well, the people’s voice was heard tonight, Wisconsin – and come January, your voice will be heard in the United States Senate! I am honored, and humbled, and grateful. And I am ready to get to work. Ready to stand with President Barack Obama. Ready to fight for Wisconsin’s middle class!
Baldwin went on to say:
"Now, I’m well aware that I will have the honor to be the first woman Senator from Wisconsin. And I’m well aware that I will be the first openly gay member of the United States Senate. I didn’t run to make history. I ran to make a difference – a difference in the lives of families struggling to find work and pay the bills, a difference in the lives of students worried about debt and seniors worried about their retirement security, a difference in the lives veterans who fought for us and need someone fighting for them and their families when they return home from war, a difference in the lives of entrepreneurs trying to build a business and working people trying to build some economic security. But in choosing me to tackle those challenges, the people of Wisconsin have made history. And I can’t tell you how grateful I am for the trust you have placed in me. All I can do is work as hard as I can to keep that trust."
Baldwin held an Election Night event in Madison Tuesday. Former Wisconsin Senator Russ Feingold was one of those on hand at Baldwin's event Tuesday night. Feingold was swept out of office in 2010 when Republicans took over.
"Tammy Baldwin is the next Senator. After Republicans claimed they turned Wisconsin around, they are getting clobbered tonight. They have been difficult and have taken a harsh tone. People have said Barack Obama is doing a good job, and they want another Democratic Senator," Feingold told FOX6News.
Feingold told FOX6 News Baldwin is a fighter, and has campaigned on the fact that she'll fight for the middle class. Meanwhile, Feingold says Thompson has walked around acting like he deserved to win the seat.
On Election Day, Baldwin cast her ballot in Madison early Tuesday morning, and then made some campaign stops at UW-Madison. Baldwin spoke with students, telling them what she believes is at risk in this election.
"In the end, this election is not about the individuals, not about the party. It`s about the future of our state and the future of our country and whether the people are going to have a voice in the U.S. Senate or the powerful are going to have a voice in the U.S. Senate and that`s what people are deciding today," Baldwin said.
A Baldwin campaign spokesperson told FOX6News Baldwin would be shaking hands with voters until the polls close Tuesday night -- not taking anything for granted.
His defeat marks Thompson's first ever loss in a statewide election.
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