Don't Write Off Public Financing Just Yet
Perhaps the declarations about the demise of the presidential public financing system were premature.
After looking at the latest campaign finance reports, it seems several candidates are likely to need the political equivalent of public assistance if they want to continue campaigning through January.
Those in the most desperate financial straits were Republican Sens. John McCain and Sam Brownback. McCain reported having $3.5 million on hand, which would seem to be adequate. But that's before stripping out $1.7 million in debt and $1.8 million in money that he can only use if he reaches the general election. That leaves him $94,000 in the red.
Unlike Mitt Romney, who is carrying a sizeable debt because he loaned his campaign money from his personal fortune, McCain's debts are of a more pedestrian variety. For example, he didn't pay the September rent on his Crystal City campaign offices, and owes $90,969.07 to Charles E. Smith realty for that rent payment. He also continues to carry $118,837.46 in debt on his American Express bill, according to his finance report.
Jan Baran, a campaign finance lawyer in Washington, said any debt McCain carries has to follow the normal commercial terms. "It's illegal for vendors and companies to extend credit on terms that they don't normally provide to their non-politician customers."
"But," Baran added, "we know from our own experiences that you can carry credit card debt infinitely as long as you pay the minimum balance."
Baran said McCain's salvation may be in the public financing system, which will allow him to quickly borrow about $6 million against the money he will get from the public system. The downside, of course, is that he will then be subject to strict limits on spending. McCain campaign officials have not yet said whether they will take the matching money, though they have taken all the legal steps needed to do so.
Two other Republicans, Brownback and former Arkansas Gov. Mike Huckabee, have said little about their intentions to take public money. Brownback, though, appears to be in need of financial help. His campaign reported just $95,000 in cash on hand as he enters the critical final weeks before the Iowa caucus. Huckabee reported about $600,000, after factoring in his debts. Compare that to the $16 million in cash frontrunner Rudy Giuliani had in the bank heading into the fall.
How can a shoestring presidential campaign compete? "They live off the land. They eat what they kill. And they try to find ways to get cash to tide them over," Baran said. "But if they run out of money and they're still an asterix in the polls, they'll discover why the fourth quarter is always the most desperate time both politically and financially."
October 16, 2007; 1:20 PM ET
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