The Obama Money Machine

Freed from a serious fundraising constraint, Democratic presidential candidate Barack Obama is positioned to mount a general election campaign on a scale the nation has never seen, fueled by hundreds of millions of dollars in private donations.

By rejecting public financing Thursday, Obama now faces no legal spending limits after he emerges from the Democratic National Convention in August and moves to the final stage of the race against the presumptive Republican nominee, John McCain.

Obama turned down $84.1 million in federal dollars in opting out of the federal system - the first major-party candidate to do so since it started in 1976. But his campaign is betting it will collect far more than that from his donors.

The Illinois senator intends to use the extra money to redraw the electoral map. He will run television ads in traditionally Republican states where he hopes to compete and deploy field operations in places Democrats are not supposed to win.

"It allows him to go broader and deeper than any candidate has been able to do from a financial basis," said Don Sipple, a Republican political strategist.

McCain said Thursday he would accept public financing, meaning he will be restricted to $84.1 million in direct spending in the two months between the Republican convention and election day.

He accused Obama of breaking a promise to abide by the federal spending limit.

"This is a big deal, a big deal," McCain said. "He has completely reversed himself and gone back, not on his word to me, but the commitment he made to the American people."

Though Obama's decision made strategic sense, it left some good government groups discouraged, predicting it would only fuel the money chase in politics. Complicating matters for Obama, he wrote in a campaign questionnaire last November that he was committed to public financing. His statement, however, left some wiggle room.

"It's a mistake; I'm sure he's thinking more of his short-term advantage than the long-term success of his reform program," said Steve Weissman, associate director for policy at the Campaign Finance Institute. "Even though he's for fixing the public financing system, this could help erode support for that objective."

Obama's campaign said the decision to reject public funding was tough. It is rooted in the unmatched success Obama has enjoyed in raising money. Through the end of April, Obama has brought in more than $265 million, compared to less than $97 million for McCain, according to the nonpartisan Center for Responsive Politics.

Under the public financing system, McCain can continue to raise and spend as much as he wants until he becomes the GOP nominee at the September convention. At that point, the Arizona senator can spend only the $84.1 million from a federal treasury fund. Taxpayers kick into the fund by voluntarily checking off a $3 contribution on their tax returns.

Obama's already deep pool of about 1.4 million donors is expected to swell. He is now absorbing New York Sen. Hillary Rodham Clinton's fundraising machinery, which will provide a jolt.

Obama's senior staff met in Chicago on Thursday with a half-dozen of Clinton's top fundraisers, and Clinton has called on 100 of her top fundraisers to meet with her and Obama next week in Washington.

Obama is also in a strong position because nearly half his donors have given less than $200, according to the Center for Responsive Politics. Contributions to the general election are capped at $2,300. So Obama is free to return to his small donors and ask for more.

Chris Kofinis, a Democratic strategist who worked for John Edwards' 2008 presidential campaign, predicted that Obama could raise and spend $200 million in the post-convention period alone.

Evan Tracey, head of the nonpartisan Campaign Media Analysis Group, said Obama's strategy against Clinton in the Pennsylvania primary foreshadowed what he might do to weaken McCain. Obama forces did not expect to beat her, but they spent so much that Clinton was compelled to deplete her resources to preserve victory.

"He can complicate McCain campaign's electoral math," said Tracey. "They can try to make any state in the country competitive."

[Via SF Gate]