The Note: McCain hits bottom

Scenario No. 1: It is over for Sen. John McCain. Down in the polls, battered by Iraq and immigration, flat broke -- pack it in, senator, and leave with your dignity.

Scenario No. 2: This is Sen. John McCain's moment. Down but not out, standing up for principle, poised for a grand comeback -- just the set of circumstances McCain needs to recapture the magic of 2000.

Keeping in mind that nobody's really eliminated in July -- except maybe the Nationals -- do not lose sight of this spin-proof fact: Something has gone wildly, horribly off-track in McCain land. Whether it was misjudging the impact of the immigration debate, misreading the fund-raising pull of the other candidates, or overstating McCain's own sway with donors and the GOP base, it is now clear that the once-presumed front-runner does not have the financial wherewithal to compete with the big boys. Per ABC's John Berman, "he is now in a corner, forced to make major staff cuts and organizational restructurings just to stay in the race."

Everyone from Ronald Reagan to John Kerry had moments like this early in the process, and it's not over for McCain, R-Ariz. But he has to avoid looking like an aging rocker paying off his child-support bills with one last sad bus tour. What he has left is himself: Forget McCain 2.0, and go back to the beta version -- the unvarnished, shoot-from-the-hip tough guy who dazzled New Hampshire eight years ago. "The campaign that John McCain planned is over right now," ABC's George Stephanopoulos said on "Good Morning America" today. "He's going back to his roots."

McCain himself is in Iraq this week, but even if he were in Iowa it would be hard to find a quick way out of this tailspin. The campaign wants to redouble its efforts in the early-voting states, but he lost his Iowa director yesterday and let go half of his 16-member staff in the Hawkeye State, per The New York Times' Carl Hulse and Adam Nagourney. "The problems fueled speculation that Mr. McCain would pull out of the race," they write. McCain is "now looking to raise $50 million this year -- half of what he once expected -- and was retooling the campaign to save as much money as possible for television advertising and travel."

McCain's core problem isn't money -- it's the message, and (perhaps) the man himself. "Lackluster financial results ($11.2 million for the second quarter) are as much symptom as cause of the malaise that is shadowing -- and threatens to prematurely end -- the Arizona Republican's presidential campaign," write Politico's David Paul Kuhn and Jeanne Cummings. "A once front-running candidacy is clinging to life, and at bottom the problems are about McCain's complicated relationship with the Republican Party's activist base."

As for the other political bombshell of the day, President Bush did a huge favor for a friend, but he did little to help the Republicans who want to succeed him as president, notwithstanding the warm embrace with which most of the GOP candidates greeted the news. (Just to be clear, Mr. President: It was inappropriate to comment on this pending judicial matter right up until the moment that you brought it to a crashing close so your friend could stay out of prison?)

Democrats are already casting the "Scooter" Libby commutation as a data point in the "culture of corruption" argument. Check out the angry statements from the '08ers. "Politics of cynicism and division" and "ideology above the law" (Obama); "clinically incapable of understanding that mistakes have consequences" (Edwards); "abdicate responsibility" (Dodd); "blatant disregard for the rule of law" (Biden, who also called for the public to "flood the White House with phone calls" today -- guess the switchboard will see how big his e-mail distribution list is). Even Sen. Hillary Rodham Clinton, D-N.Y., forgot about Marc Rich long enough to weigh in: "This commutation sends the clear signal that in this administration, cronyism and ideology trump competence and justice."

Bush has done right by the narrow slice of his base that's been lobbying for leniency for loyal Libby, "but the move's practical impact on the president's diminished popularity is likely to be minor," write John McKinnon and Evan Perez of The Wall Street Journal. "While prominent conservatives applauded the move, it could wind up putting pressure on some Republican presidential candidates to defend the commutation for the remainder of the campaign. And some rank-and-file Republican foot soldiers were disappointed that Mr. Bush didn't go further."

The Journal's editorial page was among those not impressed by Bush's move: "By failing to issue a full pardon, Mr. Bush is evading responsibility for the role his administration played in letting the Plame affair build into fiasco and, ultimately, this personal tragedy."

Amid all of this news, remember that yesterday was supposed to be Bill Clinton's big day. The former president was side-by-side with his wife for the first time on the campaign trail, and they were popular as ever at the Iowa State Fairgrounds in Des Moines. "I would be here tonight if she asked me to [even] if we were not married," Bill Clinton said. (He consumed only a third as much time as his wife, and his bright yellow shirt clashed with her peach outfit, per ABC's David Wright and Sunlen Miller.)

The Washington Post's Dan Balz and Anne Kornblut cast Bill Clinton as "the ultimate surrogate" as the Clinton campaign seeks to reenergize a flagging Iowa operation. "The former president came to offer validation for his wife, and his appearance underscored the campaign's determination to deal with what has become a nagging problem in a state that could be crucial in determining who wins the Democratic nomination: Hillary Clinton leads in national polls, but she has been struggling in the state with the first caucuses of the nomination process," Balz and Kornblut write.

How's this for classic Clinton? "A chorus of whoops went up from the audience of several thousand Democratic activists, Clinton supporters and curious Iowans as the couple strode up the steps together side by side -- albeit an hour later than scheduled," , writes the Des Moines Register's Thomas Beaumont.

Also in the news:

The Christian Broadcasting Network's David Brody reports on conservatives' concerns over former governor Mitt Romney's, R-Mass., service on the board of directors of Marriott, which offers in-room pornography in many of the hotels it manages. "Some of these conservative grassroots activists want to know whether he spoke up or tried to put a stop to Marriott's business dealings back then," Brody writes.

This comes in the wake of a stellar Washington Post Magazine profile of CEO Bill Marriott, where Marriott heaps praise on Romney, his fellow Mormon and long-time family friend (Willard Mitt Romney was named for J. Willard Marriott Sr.). "You need a chief executive who is a chief executive," Marriott told the Post's Michael S. Rosenwald.

Romney and former mayor Rudolph Giuliani, R-N.Y., have been mighty slow to reveal their fund-raising hauls for the quarter. It sure looks like they have little to brag about in a year where Democrats' fund-raising is swamping Republican efforts to attract cash, "reflecting growing enthusiasm among Democrats and adding to the GOP's already considerable burdens going into 2008," per ABC News.

The kicker:

"I expect every member of this administration to stay well within the boundaries that define legal and ethical conduct. This means avoiding even the appearance of problems," President Bush, addressing his staff shortly after taking office in 2001.

"Even Paris Hilton had to go to jail," Sen. Dick Durbin, D-Ill., winning in the (highly competitive) category of Best Libby Statement by a Democrat in a Supporting Role.

A Note holiday:

The Note is off for the rest of this week and will resume publishing on Monday, July 9. Enjoy your Independence Day.