Live

Watch CBSN Live

Obama To Decline Public Financing

In a widely expected move that will give Democrat Barack Obama a huge cash advantage over Republican John McCain, Obama announced Thursday morning that he will be the first modern presidential candidate to decline public financing in a general election.

That means that Obama's campaign, which has shattered fundraising records, won’t accept the federal system’s $84 million in taxpayer money, but also won’t be subject to its $84 million spending limit.

McCain, the Arizona senator whose fundraising has lagged substantially behind Obama’s, has said he will accept public financing, making it likely he will rely on the Republican National Committee to help make up the difference between the public grant and Obama’s unprecedented fundraising potential.

From the beginning of the race through the end of April, Obama, an Illinois senator, had raised $266 million for his presidential campaign, compared with $93 million raised by McCain.

Obama’s fundraising advantage isn’t just about the numbers, though. He’s raised his cash primarily from smaller donors over the Internet, freeing him from the time-consuming and expensive fundraising circuit upon which McCain has relied.

If Obama’s campaign keeps up the pace of small online contributions — both from new and returning donors — and is able to win donations from supporters of his vanquished rival, New York Sen. Hillary Clinton, it’s estimated he’d be able to raise as much as $500 million.

That amount would allow his campaign to implement an unprecedented 50-state strategy, the goal of which would be both expanding the Democratic electoral map and forcing McCain and the RNC to spend money even in states where they are favored.

That’s similar to Obama’s big-spending strategy in the run-up to Pennsylvania’s April 22 Democratic primary. Though Clinton was heavily favored and ultimately won the state by more than 9 points, she nonetheless depleted her already bare warchest to compete there.

Still, Obama’s decision, announced in a Web video emailed to supporters, is not without risk.

Both Obama and McCain have cast themselves as reformers working to fix a broken Beltway political culture, in part by reducing the role of big-moneyed interests.

And Thursday’s move will certainly open Obama to criticism that he backed away from an apparent commitment he made last year to the public financing program, which stems from Watergate-era reforms intended to reduce the power of special interests.

McCain's campaign was quick to pounce.

“The true test of a candidate for president is whether he will stand on principle and keep his word to the American people,” his spokeswoman, Jill Hazelbaker, said in a statement. “Barack Obama has failed that test today, and his reversal of his promise to participate in the public finance system undermines his call for a new type of politics.”

Hazelbaker predicted Obama's decision "will have far-reaching and extraordinary consequences that will weaken and undermine the public financing system.”

But Democrats have a response at the ready in the form of their recently filed lawsuit accusing McCain of violating the rules of the primary election public financing system.

In a suit filed Wednesday, the Democratic National Committee alleges that McCain shouldn’t have been allowed to back out of the program after using the promise of the funds to secure a loan that kept his campaign afloat.

Obama can also expect sharp criticism from influential newspaper editorial boards and campaign reform groups.

They lavished Obama with praise last year for winning an opinion from the Federal Election Commission granting flexibility in the public financing program and for announcing that if he won the Democratic nomination, he would “aggressively pursue an agreement with the Republican nomine” for both to accept public financing.

McCain was the only candidate who matched him, agreeing to take public funding if his general election opponent did the same.

Their public statements on the matter, which at the time were celebrated by editorial boards  and good government groups as efforts to save an embattled good government program, were presented as matching “promises” or “pledges.”

Obama’s campaign did nothing to correct that impression at the time.

But on Thursday, Obama framed his decision as a principled effort to fix a “broken system” and used it to solicit donations.

“So join me and declare your independence from this broken system, and let’s build the first general election campaign that’s truly funded by the American people,” he said. “With this decision, this campaign is in your hands in a way that no campaign has ever been before.”

The Obama campaign said it held one meeting with McCain’s team to try to work out conditions under which Obama would agree to accept public financing, including efforts to curtail the influence of outside groups including so-called 527s.

“It was immediately clear that McCain's campaign had no interest in the possibility of an agreement,” Obama spokesman Bill Burton said.

In the Web video, Obama pointed out that his campaign has refused contributions from lobbyists and political action committees, a policy without much obvious financial impact, but one that McCain hasn’t adopted.

Obama acknowledged Thursday’s move wasn’t “an easy decision, and especially because I support a robust system of public financing of elections. But the public financing of presidential elections as it exists today is broken, and we face opponents who’ve become masters at gaming this broken system.”

David Paul Kuhn contributed to this report

 

View CBS News In