BY JULIE PACE }AND THOMAS BEAUMONT

ASSOCIATED PRESS

PORTSMOUTH, N.H.

--Flush with cash, Mitt Romney plans to open a new front in the White House race by challenging President Barack Obama in upper Midwest states where he might not have dug in otherwise. Obama is intensifying his efforts to cast his Republican rival as out of touch, which he's already been working pretty hard at doing.

Sure, this is the beginning of the homestretch to Election Day, when everything in the two campaigns goes into overdrive and a September or October surprise could upend it all.

But this all has the whiff of politicking around the margins, too-- a tweak in state-by-state strategy here, a rhetorical detour there. The fact is that both candidates believe the campaign's direction is mostly settled and will be decided by a handful of unknowns.

With two months until the Nov. 6 vote, it remains remarkably close with a turbulent summer and back-to-back conventions seemingly doing little to shift the trajectory. Jobs and the weak economy still dominate. The latest unemployment rate, 8.1 percent, did nothing to change that. A rate finally dropping below 8 percent might have.

Romney is looking to expand the battleground map by trying to put in play states that have long voted for Democratic presidential nominees. Among them are the home states of the Republican ticket, Michigan for Romney and Wisconsin for Rep. Paul Ryan.

In the coming weeks, Romney's team is expected to pay for a heavy level of TV ads for Michigan and Wisconsin, either in hopes of winning them or to force Obama to spend precious campaign dollars to defend states he won by more than 10 percentage points in 2008. Polls in both states slightly favor Obama.

In key states, polling and internal surveys by Republicans and Democrats find Obama, who carried a number of typically Republican states in his 2008 victory, with slight leads. He may have more paths to victory in the state-by-state competition to rack up the 270 electoral votes needed.

Romney faces a series of built-in challenges that come with taking on an incumbent, and he has little margin for error. What he's got is more money to spend on drenching the airwaves, and an apparent if slight advantage in public opinion on the leading issue of the time, the economy.