Obama opts out of public financing

Barack Obama is forgoing public financing so he can continue his record-shattering fund-raising, much of it from small donors online, and avoid the spending limits that come with public money.

The presumptive Democratic nominee's announcement to supporters this morning, confirming what had long been hinted, makes him the first presidential candidate to opt out of the public financing system since it was instituted during the 1970s Watergate reforms.

In the message to backers, Obama portrayed the move as avoiding a broken system for one that relies on a grassroots movement.

The decision will enable him to outraise Republican John McCain -- Obama had brought in more than $265 million by the end of April. But it opens him up to accusations of breaking a pledge he had made to use public financing.

McCain confirmed late this afternoon that he will take public financing for the general election and accused Obama of reneging on a pledge.

"He has completely reversed himself and gone back, not on his word to me, but the commitment he made to the American people," McCain told reporters.

In a November candidates questionnaire with the Midwest Democracy Network, Obama answered, "If I am the Democratic nominee, I will aggressively pursue an agreement with the Republican nominee to preserve a publicly financed general election."

While Obama claims about 1.5 million donors, more than 17 million taxpayers checked off $3 from their taxes in 2006 for public financing.

McCain criticized his rival, saying that Obama had "said he would stick to his word. He didn't."

"This election is about a lot of things. It's also about trust. It's about keeping your word," McCain told reporters while touring flood damage in Iowa today.

McCain's campaign also issued a statement slamming Obama as a hypocrite.

“Today, Barack Obama has revealed himself to be just another typical politician who will do and say whatever is most expedient for Barack Obama," communications director Jill Hazelbaker said in a statement.

“The true test of a candidate for President is whether he will stand on principle and keep his word to the American people. Barack Obama has failed that test today, and his reversal of his promise to participate in the public finance system undermines his call for a new type of politics.

“Barack Obama is now the first presidential candidate since Watergate to run a campaign entirely on private funds. This decision will have far-reaching and extraordinary consequences that will weaken and undermine the public financing system.”

The Obama campaign responded with a memo this afternoon arguing that McCain effectively opted out of public financing by using private money raised for the primaries after he became the presumptive nominee in the spring.

"Since that time, McCain has used that money, and he proposes to use it for the next three months, to run a fully private general election campaign in coordination with the RNC," the memo says. "He has raised money for his own campaign and the RNC for the general. He has spent this money, in coordination with the RNC, for a wide range of general election-related expenses. The expenditures have included those for media in a host of states—states in which the Republican nominating choice was made long ago. And unlike a publicly funded primary or general election candidate, McCain is free to spend whatever amount he can raise."

Obama made the announcement in a video sent via email. Here's the message, as provided by the campaign:

Hi, this is Barack Obama.

I have an important announcement and I wanted all of you – the people who built this movement from the bottom-up – to hear it first. We’ve made the decision not to participate in the public-financing system for the general election. This means we’ll be forgoing more than $80 million in public funds during the final months of this election.

It’s not an easy decision, and especially because I support a robust system of public financing of elections. But the public financing of presidential elections as it exists today is broken, and we face opponents who’ve become masters at gaming this broken system. John McCain’s campaign and the Republican National Committee are fueled by contributions from Washington lobbyists and special interest PACs. And we’ve already seen that he’s not going to stop the smears and attacks from his allies running so-called 527 groups, who will spend millions and millions of dollars in unlimited donations.

From the very beginning of this campaign, I have asked my supporters to avoid that kind of unregulated activity and join us in building a new kind of politics – and you have. Instead of forcing us to rely on millions from Washington lobbyists and special interest PACs, you’ve fueled this campaign with donations of $5, $10, $20, whatever you can afford. And because you did, we’ve built a grassroots movement of over 1.5 million Americans. We’ve won the Democratic nomination by relying on ordinary people coming together to achieve extraordinary things.

You’ve already changed the way campaigns are funded because you know that’s the only way we can truly change how Washington works. And that’s the path we will continue in this general election. I’m asking you to try to do something that’s never been done before. Declare our independence from a broken system, and run the type of campaign that reflects the grassroots values that have already changed our politics and brought us this far.

If we don’t stand together, the broken system we have now, a system where special interests drown out the voices of the American people will continue to erode our politics and prevent the possibility of real change. That’s why we must act. The stakes are higher than ever, and people are counting on us.

Every American who is desperate for a fair economy and affordable healthcare, who wants to bring our troops back from Iraq. Who hopes for a better education and future for his or her child, these people are relying on us. You and me. This is our moment and our country is depending on us. So join me, and declare your independence from this broken system and let’s build the first general election campaign that’s truly funded by the American people. With this decision this campaign is in your hands in a way that no campaign has ever been before. Now is the time to act. Thank you so much.