McCain might seek matching public funds

Senator John McCain of Arizona, once the odds-on favorite to win the Republican presidential nomination, has slashed his campaign staff and might take public matching funds after a weak quarter of fund-raising left him with only $2 million in cash on hand.

Neither of the campaigns of his leading GOP rivals, former Massachusetts governor Mitt Romney and former New York City mayor Rudy Giuliani, has released an estimate of fund-raising through June 30, but both are expected to report larger money totals than McCain's when reports are filed by July 15.

McCain campaign officials had consistently predicted that he would exceed his first-quarter total of almost $13 million, third behind Romney and Giuliani, but yesterday said the second-quarter total was $11.2 million. Overall, McCain's campaign spent more than it raised over the past three months and has about $2 million in cash on hand entering the summer.

As a result, the campaign has drastically reduced salaried staff, senior officials have taken a pay cut, and campaign manager Terry Nelson confirmed in a conference call with reporters yesterday that he is working without pay and "proud to do so."

Neither he nor senior strategist John Weaver would say how many staff members have been cut. The Associated Press reported earlier yesterday that "some 50 staffers or more are being let go." The cutbacks apparently began some time ago. On June 12, the website politico.com reported that the staff had shrunk from about 165 to slightly more than 100.

Nelson and Weaver also said that the candidate, who is spending July Fourth in Iraq, will focus his efforts on the early states in the nominating process -- Iowa, New Hampshire, and South Carolina -- where they believe the results will determine the Republican nominee.

Nelson attributed the fund-raising drop-off to a combination of factors, including McCain's steadfast support for comprehensive immigration reform despite fierce opposition within the party's conservative base. "He's also fought a lone fight against earmarks and wasteful spending," Nelson said. "That doesn't always make us the favorite candidate of the special interests."

Weaver said McCain will win, and "it won't be because we raised the most special-interest money or the establishment money looking to support the flavor of the month."

A key component of the McCain strategy, however, has been to court the leading fund-raisers of President Bush, in part through McCain's strong support for the war in Iraq.

Nelson also said Republicans in general are struggling to keep pace with Democrats in raising money for the presidential nomination. On the Democratic side, for the second consecutive quarter, the campaign of Senator Barack Obama of Illinois has reported outraising Senator Hillary Clinton of New York, this time about $31 million (almost $57 million to date) to $21 million (about $40 million to date) for primary spending. Clinton has also raised a large sum that she could spend on the general election if she won the Democratic nomination.

Trailing them are former senator John Edwards of North Carolina at $9 million for the primary campaign ($23 million total to date); Governor Bill Richardson of New Mexico, with about $7 million (more than $13 million total); and Senator Chris Dodd of Connecticut with $3.25 million ($7.3 million total).

Senator Joseph Biden of Delaware raised more than $2.4 million in the quarter, spokesman Larry Rasky said yesterday, to bring his year-to-date total to about $4.2 million.

Besides McCain, on the Republican side, Senator Sam Brownback of Kansas reported raising "close to $1.5 million" for the quarter, spokesman John Rankin said, raising his total this year to under $2.8 million.

Obama's campaign has said it has now received contributions from about 258,000 donors, far more than any other candidate. McCain's campaign said yesterday that it has received contributions from more than 72,000 supporters.

McCain's campaign initially assumed it could raise more than $100 million this year but is now on a pace to raise less than half that. Nelson said the campaign is "seriously considering accepting public matching funds," which would require him to adhere to state-by-state spending limits.

In a year when fund-raising records are falling, McCain's is one of the few campaigns in either party to acknowledge entertaining the idea of accepting federal money.

Under the rules of the Federal Election Commission, a candidate could receive about $20 million in matching funds under a complicated formula. The first funds would not be disbursed until January, however.

But accepting the public funds requires accepting spending limits during the nomination period. For the 2008 cycle, the overall limit will probably be around $50 million up to the party convention, according to Bob Biersack, a spokesman for the FEC.

Moreover, there are limits imposed on spending in each state during the nominating process. There are exemptions for fund-raising costs and other ways to get around the state caps, but they can be very restrictive. The caps in the early states, subject to an increase next year for inflation, are Iowa, $1.5 million; New Hampshire, $818,000; South Carolina, $2.1 million.

On the Democratic side, spokesmen for Dodd, Biden, and Richardson said they have either rejected or are not considering public financing. Richardson, for instance, has already spent about $1 million in Iowa, more than six months before the caucuses will kick off the nominating season.

Representative Dennis Kucinich, Democrat of Ohio, will accept public financing, his spokesman said. Kucinich raised about $344,000 in the first quarter.