I have faced it in the political news. For example here in the comments under the article:
What does it mean exactly and why is it called like this?
Politics Stack Exchange is a question and answer site for people interested in governments, policies, and political processes. It only takes a minute to sign up.Sign up to join this community
(I'll try and post a less overtly biased and editorialized answer. We'll see how it flies...)
The term 'teabagger' is slang (typically used in the pejorative sense) to refer to those that associate themselves with the Tea Party, which is a movement primarily (but not exclusively) associated with the Republican Party in the United States.
It's a double entendre as it refers to a sex act/prank as well.
UPDATE: It appears some contest the statement that the Tea Party is primarily affiliated with the Republican Party. It's not necessarily germane to the question, but did offer some context as to where the Tea Party sits on the US political spectrum. That statement is based on the fact that of the 100+ US Politicians that claim affiliation with the Tea Party Movement, all are Republican. In addition, of the 66 members of the Tea Party Caucus in Congress, all were republican. As for supporters, per a Gallup poll, "Tea Party supporters are decidedly Republican".
Moreover, as Jay Nordlinger at National Review admits, the term "teabagger" was introduced to the political lexicon by Tea Party movement leaders:
The first big day for this movement was Tax Day, April 15. And organizers had a gimmick. They asked people to send a tea bag to the Oval Office. One of the exhortations was “Tea Bag the Fools in D.C.” A protester was spotted with a sign saying, “Tea Bag the Liberal Dems Before They Tea Bag You.” So, conservatives started it: started with this terminology. But others ran with it and ran with it. — (source)
"Teabagging" is when a male dips his scrotum upon another person's face as an insult. It's commonly simulated in FPS video-games where a victorious player crouches up and down over a player that he's killed.
In the scope of politics, It's a pejorative term for a member of the "Tea Party" which is a movement which is known for it's fiscal conservatism.
one uses the term "teabagger" is used to put extra emphasis on the fact that he/she doesn't take that particular member of the tea party seriously.
The reason they use the word "teabagger" is simply because both
Tea Party and
Teabag have the word
Tea in them