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MIKE PESCA, host:

Yesterday, Barack Obama did what political observers knew he had to do. It was the smart move. He guaranteed his presidential campaign tens of millions more dollars. But it was a calculation he knew would draw criticism. Here, he announces his decision.

(Soundbite of speech)

Senator BARACK OBAMA (Democrat, Illinois; 2008 Presumptive Presidential Nominee): Public financing of presidential elections, as it exists today, is broken, and we face opponents who've become masters of gaming this broken system. John McCain's campaign and the Republican National Committee are fueled by contributions from Washington lobbyists and special interest PACs. We've already seen that he's not going to stop the smears and attacks from his allies running so-called 527 groups.

PESCA: To discuss Barack Obama's decision to opt out of campaign financing, I'm joined by Eamon Javers, the financial correspondent for politico.com. Hey, Eamon.

Mr. EAMON JAVERS (Staff Writer, politico.com): Good morning.

PESCA: So, Obama says, campaign finance is broken, because he can raise more money outside of it. But for John McCain, I guess it's not broken, because the 80 or so million dollars it guarantees is more than he could raise by himself. Am I getting the definition of "broken" correct?

(Soundbite of laughter)

Mr. JAVERS: Yeah. I mean, look, the Obama campaign is going to spin this as sort of they're taking the high road here by getting all these donations from small donors around the country. But basically, what's happening here is an entirely tactical decision by the Obama people that said, look, if we go the public-financing route, we have to agree to a cap on our spending of about 84 million dollars. But if we raise the money ourselves, we think we can raise something like 300 million dollars.

So - and for them, it was just a matter of whether or not they wanted to leave all that money on the table or not, and sort of fight the political campaign with one arm tied behind their back financially. They decided not to, even though they knew they would take a hit for breaking the promise that Obama had made last year not to do it.

PESCA: Right, the risk of reward is like, we've got to get the money and we know we'll take a hit. How big do you think the hit will be? Are we going to see 100 ads calling Barack a flip-flopper and criticizing him for this?

Mr. JAVERS: No, but you're going to see some, and you're going to hear it for a couple of days now, and you're going to hear it again, you know, as we get into October. But you know, my guess is that this won't have much of an impact. I mean, the average voters don't pay a whole lot of attention to this kind of thing, and the Obama campaign is very savvy in how they're handling this.

If you looked on their website yesterday, and even this morning, they have a huge banner up saying, we're declaring independence from a broken campaign system. This is a first campaign truly funded by the people. And they're using Obama's decision here to actually call for more contributions to their huge campaign fundraising juggernaut. So, they might make money out of this than anything else.

PESCA: I don't know, man. Calling independence from a broken system, it's like saying, I'm going to a snooty prep school, as independence from the failing public schools.

Mr. JAVERS: Yeah, there could be something to that. I mean, it was dressed up very much as a 4th of July kind of thing. That even the type face on the website was, you know, as if it was the Declaration of Independence or something like that. I mean, they're really trying to spin this hard. This is the Obama campaign raising money from grassroots people.

This really is public financing, because they have, you know, a million donors out there who are contributing. You know, that's their line. The McCain people can't do anything really, other than grumble in public that Obama broke his promise, and in private sort of be amazed at the amount of money that he has raised.

PESCA: Well, I was going to say, that they can replay what Obama himself said in 2007, which is this clip.

(Soundbite of press conference)

Sen. OBAMA: I'll strongly support public financing. You can change the rules on lobbying here in Washington. But if we're still getting financed primarily from individual contributions, those with the most money are still going to have most influence.

PESCA: We'll probably see that clip a few times.

Mr. JAVERS: Yes, the hard truth here is that Obama said that way before he invented this huge Internet-fundraising machine. And now that he's invented it, he doesn't want to have to put it on the shelf and not use it during the general.

PESCA: Sure, no candidate would say, I'm going, you know, raise 200 million fewer dollars based on principle, possibly jeopardize my party's chance of winning the White House, et cetera, et cetera. But what do you think of the basic argument? Is 80 million dollars just so little that it is kind of a broken or at least a flawed system? The number that the public would give you just really isn't enough to run a modern campaign?

Mr. JAVERS: Yeah. If you look at the - I mean, the last major campaign in the UK, for example, those candidates spent 75 million dollars, and that's a tiny country.

PESCA: And the elections last, what? Six weeks or something?

Mr. JAVERS: It's a month, right, I mean, it's a very short season over there, and they're spending 75 million. So, 80 million here is just not all that much when you think about it. In Washington they always throw around, well, the money that you spend on just toothpaste advertising during the year is less than that. So, no - is more than that, I'm sorry. So you know, the amounts that we're limiting these candidates here are relatively small.

What Obama is going to do with all this money that he's raising is he's going to embark on a 50-state strategy, and in order to do that, he's - what that means is he's not going to target the states that he thinks are most favorable to him in the general. He's going to play everywhere, which means he going to run television ads in all the biggest markets in the country. That's an expensive prospect, and that's certainly going to cost him more than 80 million dollars.

PESCA: You see, my co-host who's not here, Rachel, is from Idaho. He could maybe leave that one off the list.

Mr. JAVERS: Yeah, I think that TV ads in Idaho are free.

(Soundbite of laughter)

PESCA: And also, I don't think they're going Democrat, but what do I know, right? There's one other part of his announcement that we played, where he said that, I have to run against this 527 groups. Those are the private groups, like the Swift Boat Veterans for Truth. And of course, people - Democrats especially, are very sensitive to getting swift-boated. But what I want to ask you is, is he doing anything - Obama criticized McCain for not doing anything to stop the 527s. Is Obama doing anything to stop the 527s that are attacking McCain?

Mr. JAVERS: You know, that's a good question, and I'm not totally up to speed on that. I know Obama has said that he doesn't want that to happen, but there's a difference between sort or saying publicly that you don't want that to happen and then maneuvering behind the scenes to shut those people down when you can.

PESCA: Here is...

Mr. JAVERS: I'm not in the loop enough to know whether they're actually doing those behind the scenes maneuverings.

PESCA: Well, here's one that just got a lot of attention. This is by moveon.org, and a young mother is holding her baby Alex on her knee.

(Soundbite of MoveOn.org political ad)

(Soundbite of baby chattering)

Unidentified Woman: Hi, John McCain. This is Alex, and he's my first. So far, his talents include trying any new food and chasing after our dog. That and making my heart pound every time I look at him. So, John McCain, when you say you would stay in Iraq for 100 years, were you counting on Alex? Because if you were, you can't have him.

PESCA: Wow.

Mr. JAVERS: Yeah that's pretty melodramatic stuff. I'm not sure that'll play beyond the core audience of the people who were hardcore antiwar folks already. So - but yes, that's the kind of thing that sort of stirs the Democratic base and Barack Obama benefits.

PESCA: Maybe - right ,and maybe makes them give all that money. Well, Eamon Javers, financial correspondent for poltico.com, thank you very much.

Mr. JAVERS: Thanks a lot.

PESCA: Coming up on the show, a big solstice blow out. Stonehenge and Baconhenge. This is the Bryant Park project from NPR News.

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