Public Funds Throwdown

Last week we argued that Obama would be unwise to refuse to take public funds in the general election, seeing as he pretty much agreed to do so if McCain did. Sure, Obama stands to lose an impressive and expanding donor pool, the vast majority of which have contributed small amounts. But chucking his image as a reformer out the window would be more politically perilous.

Now it looks as if Obama is trying to wriggle out of his near-promise by turning the tables on McCain. Press secretary Bill Burton sent out a statement saying that McCain “abandoned the latest campaign finance reform efforts in order to run for the Republican nomination and went back on his commitment to take public financing for the primary election this year.”

As proof, Burton offers up McCain’s conspicuous absence from a campaign-finance reform bill introduced in 2006. As for the senator’s alleged “commitment” to taking public financing, Burton cites a recent Washington Post piece detailing how McCain secured a $1 million bank loan by promising to take federal matching funds if his campaign began to falter. There’s some debate over whether, by using a promise of federal funds as collateral for a loan, McCain obliged himself to enter the public financing system. But that is far from settled.

Still, it looks as if Obama’s campaign is developing an excuse to decline federal funds in the general. Even if Obama kinda-sorta promised that he would take them, he will now argue that McCain has disqualified himself from the agreement. Never mind that McCain is essentially responsible for the current campaign finance reform system. The Arizona senator wants to keep his financing options open—something Obama also wants to do —and that is suddenly cause for contempt.  

The face-off over public funds involves some game theory. If Obama and McCain both take federal funds, they both look good, but McCain gets Obama to forego his treasure-trove. If Obama refuses funds and McCain accepts, Obama looks bad but has a huge financial advantage. If Obama and McCain both refuse, it’s a wash PR-wise, but Obama maintains a huge financial advantage. (The fourth scenario, in which Obama accepts and McCain rejects, is pretty much impossible.)

For Obama, this last scenario (in which both refuse) is clearly the most desirable. But for that to happen, he needs to convince McCain that he won’t take federal funds under any circumstances. And for that to happen, he needs a plausible moral rationale. The McCain-is-a-hypocrite tack appears to be the strategy of choice.

Needless to say, it’s risky. There are a few areas where Obama has a strong, high-contrast case against McCain—Iraq, health care, jobs, and the economy, among others. Campaign finance is not one of them. If Obama wants to make it one of his first battlegrounds, good luck with that.

Update 4:09 p.m.: As a reader points out, Obama weighed in on the subject in a USA Today column on Wednesday, reiterating his commitment to a “meaningful agreement in good faith that results in real spending limits.”