Sept. 13 (Bloomberg) -- Barack Obama may be playing possum.

John McCain's campaign is boasting about a surge in fundraising following his pick of running mate Sarah Palin, a swell of cash that his campaign says has eroded the money advantage Obama once enjoyed.

The Illinois senator's campaign hasn't done much to refute the notion its financial edge may be shrinking. So far, though, Obama's aides privately say they're keeping a low profile so donors don't get complacent, suggesting that August contributions -- to be disclosed next week -- will top February's one-month record of $55 million. And Palin, while energizing Republicans, has also motivated Democratic donors.

Less than two months before Election Day, money raised from this point comes on top of millions of dollars Obama has already spent to train staff and open offices in competitive states -- building a more extensive operation than McCain and Republicans have been able to put together so far.

``This was always an election where we needed to significantly broaden the battlefield and put in play a whole series of states that have not been competitive,'' said former Democratic National Committee Chairman Steve Grossman, who is raising money for Obama, 47. ``That takes a lot of money. I have no doubt we'll be able to implement that plan.''

Obama may yet face fundraising challenges. Unlike McCain, 72, the Democrat spurned federal campaign financing and is banking on money from supporters. Attracting contributions may get tougher if the Republican Arizona senator's poll numbers keep strengthening.

Victory Prospects

``Contributions follow prospects of victory,'' said Costas Panagopoulos, director of Fordham University's Center for Electoral Politics and Democracy in the Bronx. ``If the prospects diminish, so will some of his contributions.''

By the same token, Republicans may rake in more than expected if McCain holds onto his bounce in the polls since the Republican National Convention.

``Folks are much more inclined to invest when they think there is going to be a payoff,'' former Republican National Committee deputy chairman Eddie Mahe said.

McCain's campaign organization is limited to $84.1 million in public financing. Obama isn't subject to spending restrictions after becoming the first major-party nominee to refuse public funding.

Obama raised more than double McCain's haul before the nominating conventions, $390 million to $160 million, and spent some of that money hiring workers and setting up get-out-the-vote operations.

On-The-Ground Organization

``The story of the Democratic primary was a superior on-the- ground Obama organization,'' said Rogan Kersh, associate dean of New York University's Wagner School of Public Service. ``This fundraising differential may mean we see that movie sequel in November.''

In June and July, Obama spent $5 million on staff; McCain spent $2.8 million, Federal Election Commissionreports show. Last week, Obama opened 35 new offices in Pennsylvania, the campaign announced. Obama is also competing in states such as Virginia and North Carolina that in recent elections haven't been hospitable to Democratic presidential nominees. There are 27 offices in Virginia, for example, according to his Web site.

That means McCain and the RNC during the two-month sprint to Nov. 4 will be spending part of their budget matching expenditures Obama has already made. This week, McCain and the RNC began adding campaign staff, with an eye toward doubling the size of the party's ground operation in 14 states.

Party Assistance

In the money contest, McCain is getting help from the national Republican Party, which has so far taken in $100 million more than the Democratic National Committee to help promote its ticket.

In mid-June, Obama set a goal of raising a combined $450 million for his campaign and the DNC by Election Day. Reaching that target requires an unprecedented average of $100 million per month. Democrats didn't hit the mark in July, when Obama drew $51 million and the DNC got $27 million.

Both parties now say they're on a pace to meet the mid- summer fundraising targets -- which would give Obama and the Democratic Party about a $100 million spending advantage.

Time for Fundraising

Even so, Obama has to take time away from competing for votes to raise the private contributions his campaign needs. He spent Sept. 5 at two New Jersey events, including one at the home of musician Jon Bon Jovi where donors gave $30,800. On Sept. 16, he's scheduled for a $2,500-per-person Beverly Hills, California, fundraiser and concert featuring Barbra Streisand.

``It's a huge advantage when you're not so heavily encumbered by fundraising,'' said former Representative Jim Davis, a Florida Democrat. ``But Senator Obama has found the balance between the time he spends getting to know people and funding his campaign.''

Obama has also gone back to his small donors -- 49 percent of his contributors through July 31 gave $200 or less. That means the Democratic nominee has millions of financial supporters who can donate again without exceeding federal contribution limits.

His campaign raised $10 million on Sept. 4, the day after Palin addressed the Republican nominating convention, for its biggest one-day haul of the campaign.

``We had a terrific summer,'' said Obama's campaign manager, David Plouffe. ``We always knew the Republicans would do well financially. They always do. Our imperative is to just make sure that we raise what we need to execute our plan.''

McCain raised $50 million last month, campaign manager Rick Davis said, including $10 million after Palin was picked. ``Basically what we've done is take money out of the equation,'' Davis said.

To contact the reporter on this story: Jonathan D. Salant in Washington at jsalant@bloomberg.net.

Last Updated: September 13, 2008 00:01 EDT