Obama Rejects Public Financing

By Jonathan Allen and Emily Cadei, CQ Staff Thu Jun 19, 9:47 AM ET

Presumed Democratic presidential nominee Barack Obama will opt out of public financing for his campaign, reversing an earlier stance on the role of private funding in presidential campaigns.

Obama's surprising fundraising ability has put campaign strategy at odds with previously stated support for public financing. Obama smashed records by raising more than $272 million in the primary season, as of April 30, the latest available reports on file with the Federal Election Commission.

"It's not an easy decision, and especially because I support a robust system of public financing of elections," Obama told supporters in a video on his website Thursday morning.

"But the public financing of presidential elections as it exists today is broken, and we face opponents who have become masters at gaming this broken system," Obama said.

Republican John McCain's campaign quickly reacted, releasing a statement that said "Today, Barack Obama has revealed himself to be just another typical politician who will do and say whatever is most expedient for Barack Obama.

"The true test of a candidate for President is whether he will stand on principle and keep his word to the American people. 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.

"Barack Obama is now the first presidential candidate since Watergate to run a campaign entirely on private funds. This decision will have far-reaching and extraordinary consequences that will weaken and undermine the public financing system."

About $265 million of Obama's contributions have come from individuals, and the overwhelming majority of donors have given $200 or less.

Obama's decision to reject public funding in the general election could tarnish his image as a reformer. It marks the first time a major party presidential candidate has opted out of the financing scheme since the system was put into place in the late 1970s. And it comes after the candidate, in the early days of his campaign, pledged to accept public financing if he became the nominee and his Republican opponent did the same.

Obama has backtracked since then, saying any agreement between the two candidates on public funding would need to address outside group spending, as well. And he certainly took into consideration the fact that the Republican National Committee, is flush with cash it while his own Democratic National Committee is sorely lagging in fundraising. The RNC ended April with more than ten times more in the bank, $40.6 million, than the DNC's $4.4 million. The parties play a large role in campaigning and are able to coordinate their own spending with that of the candidates' campaigns.

Obama's decision means he will not receive about $84 million in taxpayer money for the general election, which begins for each candidate is officially nominated at his convention (the last week of August for the Democrats, first week of September for the GOP) . It is a large sum for only two months of campaigning, but it would mean Obama could not do any other fundraising. He has shown the capacity to raise even more than $84 million: the campaign hauled in over $50 million in February for the primary campaign.

McCain has indicated he will take the public funds for the general election. And, as he is required to do, he has begun returning donations for the general election to facilitate that.

McCain has not demonstrated the same fundraising prowess as his Democratic rival. His $101 million trailed far behind Obama's $272 million in the same time period. And, even with an extended primary battle, Obama ended April with nearly double the cash on hand as McCain -- $46.5 million to $24 million.