Obama opts out of public funds

WASHINGTON -- Democrat Barack Obama's decision to walk away from more than $84 million in taxpayer money for the general election signals trouble for a system created to limit the influence of special interests, experts say.

Obama on Thursday set aside an early promise to use public funds for the fall and became the first presidential nominee to bypass the system since it was created in 1976 after the Watergate scandal.

Republican John McCain will accept public funding for the fall campaign. He applied for the money for the primaries, but did not use it.

"We've known for some time that the public-financing system was on the verge of breaking," said Richard Hasen, a campaign-finance expert at Loyola Law School in Los Angeles. "Now that the first major party candidate has opted out of it, it shows that is broken."

Hasen and Anthony Corrado, who teaches at Colby College in Maine, note that campaign-finance laws limiting contributions and setting levels for public money have not kept pace with the high costs of TV advertising and other expenses for a White House bid.

"It's outdated, and it's inadequate," Corrado said.

Obama's top campaign aides said the Illinois senator is forgoing taxpayer money because McCain has been raising general-election funds since March, when the Arizona senator clinched his party's nomination. Obama clinched on June 3.

In a video statement, Obama said his decision was prompted by the ability of party committees, outside groups and wealthy individuals to influence the election with their own spending.

"It was not an easy decision, especially because I support a robust system of public financing of elections," he said. "We face opponents who have become masters at gaming this broken system."

McCain, speaking to reporters from Iowa, said the fact that Obama was "not even willing to keep" a campaign promise "should be disturbing to all Americans."

Obama and McCain both pledged last year that they would accept taxpayer money for the general election if his opponent would do the same. Obama began stepping away from that as the primaries got underway and he shattered fundraising records. In a Feb. 20 column in USA TODAY, Obama said he would keep his pledge only if McCain also agreed to limit spending by political parties and refuse fundraising help from outside groups.

"Unlike Barack Obama, John McCain believes in keeping his word to the American people, and he will undergo public financing for the general election," spokesman Tucker Bounds said.

Obama has tapped more than 1.5 million donors and used the Internet extensively to bring in new ones. At the end of April, Obama had nearly a 3-to-1 advantage over McCain in fundraising.

Obama spokesman Bill Burton said the campaign would continue to cultivate "grass-roots" donors, but it has already stepped up its efforts with high-dollar donors.

The Democratic National Committee has not done as well as Obama in raising money and has less cash to spend than its GOP counterpart. The national party committees can underwrite ads and pay for crucial get-out-the-vote efforts.

Taxpayers can contribute to a fund that pays for presidential campaigns by donating $3 through a check-off box on their tax returns. Fewer than 10% of taxpayers do so each year. A record 29% did in 1980.

When top candidates opt out, taxpayers sometimes end up paying for the campaign expenses of lesser-known candidates or those who have trouble keeping pace with prolific fundraisers. The Federal Election Commission has paid out nearly $13.5 million this year, including $8.8 million to Democrat John Edwards and $100,000 to Republican Duncan Hunter.

Legislation is pending in Congress to raise taxpayer donations to $10 and increase the amount candidates receive in public money.