Obama And McCain Squabble Over Public Financing

Democrats still haven't picked their presidential nominee. But Barack Obama is already jostling with Republican John McCain over how to finance the fall campaign. McCain intends to take public funds, and he accuses Obama of breaking a promise to do so. But like anything to do with campaign money, that political spat is just part of the story.

The government would give each major party nominee more than 84 Million dollars, provided that he or she doesn't take money from private donors. It's a Watergate-era reform and McCain and Obama are competing to wear the halo of a reformer.

Months ago, they seemed to strike an agreement on public financing. If both were nominated and one said yes to it, so would the other. Obama even answered Yes on a questionnaire that asked if he would use public funds.

Then Obama's fundraising shot into the stratosphere. The higher it goes, the less incentive he has to take public funds.

McCain is making the promise a campaign issue. "I made a promise to the American people that I would," McCain said recently. "And he made a promise. Apparently he may not keep that."

Obama prefers to talk about a different promise -- to change Washington. It's a central theme of his campaign. This week, at a fundraiser in Washington, he said lobbyists with lots of campaign cash shouldn't have so much influence: "I don't love the way they dictate the agenda in Washington D-C -- because I want the American people to dictate that agenda."

Obama said his campaign has created "a parallel public financing system." He's arguing that millions of dollars in small Internet donations are as clean as public funding.

And in practical terms, Obama would be better off turning down the public money. At his current pace, next month he'll have outraised every other presidential candidate in history. Jonathan Bernstein is a political scientist who's followed the boom in political money. He's at the University of Texas in San Antonio. He says the small-dollar Internet fundraising really has changed a candidate's calculations. And it's not just money.

"What's happened is that it's turned out that there's just way more money out there than really anyone expected ... You know, that's not nearly as time-intensive as having to schmooze with the big-money people."

But McCain doesn't have that base of small donors. This week he held that most traditional of money events -- a reception at the Willard Hotel near the White House. Illinois congressman Ray LaHood said he saw lots of donors who had backed McCain's primary rivals.

"These are folks that missed the train first time thru, last year. But now that they see that he's gonna be the nominee, they want to be a part of the team."

Events like this have boosted McCain's finances since he clinched the nomination. But even now, Obama's outraising him more than two to one.

With public financing in the fall, McCain would get 1 point 4 million dollars per day. That's eight times his daily fundraising average in the race.And since 1976, every Democratic and Republican nominee has opted for public financing.

And normally, it isn't that hard to get the cash. But this year, it may be. A nominee needs certification from the Federal Election Commission. That takes a vote of 4 commissioners. But only 2 commissioners are currently confirmed.

Senators are squabbling over 4 nominees. Fred Wertheimer, a long-time advocate for stronger campaign finance laws, says the stalemate causes all sorts of enforcement problems.

"If another country was going thru a national election and had shut down their agency to oversee the campaign finances of the election, we would call that country a banana republic."

There's a window in May and June when the Senate might confirm new commissioners. If it doesn't, either party's nominee could go to court for the public funds, where a judge might, or might not, agree.

-- Peter Overby

8:22 PM ET | 04-10-2008 | permalink