Obama's $150 Million May Overwhelm McCain Campaign (Update1)

By Jonathan D. Salant and Julianna Goldman

Oct. 20 (Bloomberg) -- Barack Obama's record-breaking September fundraising puts him on pace to spend as much as a half-billion dollars for the general election, almost double the resources of Republican opponent John McCain.

Obama, the first major-party nominee to shun public funding for the general election since the system was put in place, reported taking in $150 million in September, the most ever raised by a presidential candidate in one month and more than twice as much as his previous record of $66 million in August.

He entered September with $95 million in the bank. Along with the money he raised last month, the Democratic National Committee took in $50 million, which can be spent on his behalf. Analysts say Obama and the party likely will at least match those figures in October, giving the Democrat about $500 million for the two-month campaign ending with the Nov. 4 election.

McCain accepted $84.1 million in federal money, barring him from directly raising private funds except to cover certain legal and accounting costs. Combined with the $103 million in the bank he had at the start of September, plus $66 million the Republican National Committee raised in September, and another $50 million advisers said the party will raise this month, McCain will have about $300 million for the general election.

`Tactical Flexibility'

Obama's decision to opt out of public financing ``means that he has tactical flexibility as we move into the final couple of weeks of the campaign,'' said Arthur Sanders, chairman of the Department of Politics and International Relations at Drake University in Des Moines, Iowa. ``McCain cannot answer in kind.''

The money advantage allows Obama to continue expanding the electoral playing field, setting up offices and airing ads in states such as West Virginia, North Carolina and Indiana that President George W. Bush won in 2004.

Obama campaign manager David Plouffe said yesterday the money would also help in North Dakota, which has awarded its electoral votes to a Democratic presidential candidate only once since 1940.

McCain drew down his reserves in September, ending the month with $46.9 million in cash, according to a filing his campaign made last night with the Federal Election Commission. The party committees and the Obama campaign are set to file their September reports to the FEC by the end of the day.

Focus on Economy

Obama's bank account also allows him to emphasize issues such as the economy, which favors Democrats, and drown out Republican attacks on his qualifications and positions.

``In framing candidates, advertising money is the name of the game,'' said Julian Zelizer, a professor of history and public affairs at Princeton University in New Jersey. ``Democrats can use this money in the next few weeks to keep public attention focused on the economy, which hurts McCain, and telling the public what Obama is about rather than having the GOP do that for them.''

McCain, 72, yesterday renewed his criticism of Obama for breaking a promise to accept public financing if he won the Democratic nomination.

``We're now going to see huge amounts of money coming into political campaigns, and we know history tells us that always leads to scandal,'' McCain said on ``Fox News Sunday.''

Ad Spending

The RNC has helped McCain make up some of the money gap, spending $34 million on ads attacking the Democratic nominee during the campaign. The Democratic National Committee, meanwhile, has spent $1.1 million on ads attacking McCain, an Arizona senator.

Forsaking public financing also gives Obama, 47, the freedom to decide where to spend his money. Most of the activities of the RNC can't be coordinated with the McCain campaign.

Obama's ``financial advantage and, equally important, his strategic control of all of his general election funds allow him to expand the number of battleground states and make it impossible for McCain to map a comeback,'' said Thomas Mann, a political analyst at the Brookings Institution, a Washington- based research group.

Obama, an Illinois senator, has now raised $605 million since he began his bid for the White House, more than anyone else has ever brought in. Last month, his campaign added 632,000 new donors, the most ever in a month, for a total of 3.1 million to date.

``These are absolutely astronomical numbers,'' said Barry Burden, a political science professor at the University of Wisconsin in Madison. ``Never before have the Democrats been so flush with funds.''

Even with its record funds, the campaign is no less frugal. Obama press aides yesterday were lamenting that they have to share one tape recorder among four people and that they couldn't convince the campaign to buy them more.

To contact the reporters on this story: Jonathan D. Salant in Washington at jsalant@bloomberg.net ; Julianna Goldman in Dunn, North Carolina, at jgoldman6@bloomberg.net .

Last Updated: October 20, 2008 10:55 EDT

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