Campaign Financing Furor

Barack Obama announced he was not going to accept public funds for his fall campaign and was immediately lambasted by editors, pundits, and Repuglicans.

Why?

First, Sen. Obama has earlier stated he would use the public finance system if his Republican opponent did the same. The about face on this topic is distasteful to some in the press, and scary to the GOP.

Barack Obama has shown an absolutely incredible ability to raise campaign funds. His average contribution is $88 and through the end of May he had raised $295 million, compared to McCain's $122 million. This is particularly telling when you look at how much longer Obama was in a contested primary than McCain, splitting the ability to raise funds between himself and Sen. Clinton.

The biggest reason for Obama to reject public funding is that it carries a limit on the amount of spending by the candidate that is allowed. If he had chosen to accept the public funds, Obama would have been restricted to spending about $85 million dollars.

The kicker here is that there is no restriction on what can be spent by the special interest groups (such as the infamous Swift Boat bunch) which are typically well funded by big business interests and, hence, Republican oriented.

The Republican National Committee can also throw money into the Presidential race, particulary if they do so in a manner which also qualifies as helping their Senate and House races.

The decision to not use public funding was the correct one for Barack Obama, although his earlier statement that he would do so may be hard for some to take, particularly as Obama casts himself as a reformer.

One other note. The public finance system was put into place so that the corporate interests wouldn't be able to have as much influence in an election, which they are able to work around by using the 521 groups. Obama however has held true to the idea, since most of his support came from the public at low donation levels.

The Republicans are upset because they are masters of loopholes, and were counting on the special interest groups doing their dirty work and the Democratic nominee not having the funds to respond.

Doh. Outsmarted again.