Obama opts out of public financing, strengthening his ability to carry national campaign

In a video message released this morning, Barack Obama announced he is opting out of public financing. This makes him the first candidate ever to rely on private donations to finance his general election campaign, and it will give him a giant advantage over John McCain. While the Republican will be limited to spending $85 million between the convention and Election Day, Obama will be able to spend as much money as he raises -- and some estimate that could be as high as $300 million.

The McCain campaign has long been pressuring Obama to respect what they call as his pledge to take public financing if McCain does. Obama had taken no such pledge but had said that he would "aggressively pursue an agreement". To justify his decision today, Obama argued that the RNC's fundraising advantage over the DNC coupled with the possibility that independent groups air attack ads in the next few months would have put him at a disadvantage had he accepted to limit his general election spending. Democrats also argue that the huge size of their small-donor list means that they have found an "alternative" public financing system.

(I for one find that this second point unconvincing because what is appealing about the campaign finance is that it maintains some equity between different candidates' spending and prevents the highest spender to simply buy his way into office. I agree that the sytem is so messed up that it makes little sense to blame Obama, that it makes no sense for the McCain campaign to say they "believe in public financing" when they did not take it for the primary, and that it would have been politically suiscidal for Obama to reject it. But in a hopefully not-too-distant future we can hope for a better European-style campaign finance system that also puts stringent limits on RNC/DNC/outside-group spending and in which candidates do opt in. TPM reports that some reform activists have a similar take on the "alternative system" argument. And Senator Russ Feingold also criticized Obama, saying that the general election system was not broken.)

The McCain campaign believes they have an opportunity to hurt Obama with this issue. They are now insisting that Obama broke his words and are blasting him as just another "typical politician who will do and say whatever is most expedient for Barack Obama." McCain insisted today that this is a "big, big deal." The goal is clear: Hurt Obama's posing as a "change" candidate and the reform image that the Democrat has tried to embody. The problem for McCain's campaign is that... this is a deeply hypocritical reaction. Given the financing problems the Republican candidate has himself, it's difficult for me to understand how he is hoping to claim the reform mantle on this one.

Not only did McCain reverse his position on whether to take public financing in the primary (the period that ends at the conventions at the end of the summer), but he opted out after using the promise of matching funds to secure loans in the fall of 2007. There is a possibility that doing so should have locked McCain in the public financing system and the head of the FEC said as much a few months ago. (more background on this controversy here). Taking advantage of the FEC's lacking a quorum to take action against him and rule on whether he was forced to respect the limits that come with public financing, McCain broke those spending limits. The DNC has filed lawsuits against this but they have little chance of getting anywhere until the Senate resolves its stalemate over FEC nominees. Given this reversal whose very legality is under question, does McCain have any legitimacy to accuse Obama of breaking his word and abandoning the reform mantle?

Even if McCain was clean on the issue and could unproblematically present himself as the reform candidate here, another problem remains: such issues very rarely have any resonance with the electorate, and while the GOP might try to put this in relation with whatever other talking points it has to demonstrate that Obama is just a "typical politician," it's unlikely to do much for them. After all, none of the Clinton campaign's accusations of Obama engaging in negative attacks despite preaching "new politics" hurt the Illinois Senator -- and campaign finance is not something that arouses voter passion.

Ultimately, Obama's prodigious fundraising ability terrifies Republicans, who are worried about being swamped under the Senator's machine. Opting out of public finance allows Obama to outspend McCain in key swing states, but it is in more marginally competitive races that the difference could be the most significant. Indeed, both campaigns need to spend a large portion of their resources in states like Florida, Ohio and Wisconsin. Once all of that is accounted for, how much more of his $84 million will McCain retain to invest in New Jersey, Connecticut and California and to defend states like Alaska and Georgia? Obama, on the other hand, will have millions to run ads and send staffers to states that are not high-priority. That will allow him to develop an alternative electoral map in states like Nevada, Colorado and Virginia while also contesting Ohio and Florida and testing GOP vulnerabilities in third-tier statses.