Despite his image as a reform candidate and an explicit pledge to the contrary, Barack Obama on Thursday announced his campaign was opting out of the public campaign finance system. In a USA Today op-ed, Obama explains his decision, saying, "I support public financing and will work to make it viable. The decision not to participate in the public financing system wasn't an easy one -- 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 the Republican Party apparatus has mastered the art of gaming this broken system."
Obama's decision is giving him one of his worst media days of the campaign. NBC Nightly News said the decision "created a firestorm," and ran an examination of Obama's pledge to "observe the limits if his opponent did," and showing excerpts from a February interview with Tim Russert in which he indicated he would seek to participate in the system. ABC World News similarly called the move "a direct contradiction" of his early promises, while the CBS Evening News said Obama "abandoned a campaign pledge," adding, "it is a big reversal. Only months ago, Obama was signaling a willingness to preserve public financing. No wonder John McCain smelled a flip-flop."
In a highly critical analysis piece that received wide distribution, Liz Sidoti of the AP says Obama "tarnished his carefully honed image as a different kind of politician -- one who means what he says and says what he means -- while undercutting his call for 'a new kind of politics.'" Sidoti also took exception to Obama's argument that he had to make the move to defend himself against independent groups running ads, saying "he failed to mention that the only outside groups running ads in earnest so far are those aligned with Obama -- and running commercials against McCain. So much for being a straight shooter." In another widely-distributed analysis piece, McClatchy said the decision "is not only a huge blow to the Watergate-era campaign finance system, but it could hurt the Democratic nominee's effort to paint himself as a reformer." Brad Coker of Mason-Dixon Research, a prominent independent political polling firm, said, "For him to go outside this framework leaves him open to charges of hypocrisy."
Sen. John McCain was quick to jump on the move. The CBS Evening News showed McCain saying, "This is a big deal. It's a big deal. He has completely reversed himself, and gone back, not on his word to me, but the commitment that he made to the American people. That's disturbing." The Hill adds that McCain's campaign "responded with charges of hypocrisy, saying Obama 'has revealed himself to be just another typical politician who will do and say whatever is most expedient for Barack Obama.' 'The true test of a candidate for President is whether he will stand on principle and keep his word to the American people,' Jill Hazelbaker, a McCain spokeswoman, said. '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.'"
Editorials Heavily Critical Of Decision Editorials in major newspapers are unanimous in their criticism of Obama's move, even in several papers that have looked very favorably upon his candidacy. The New York Times says in an editorial, "The excitement underpinning Senator Barack Obama's campaign rests considerably on his evocative vows to depart from self-interested politics. Unfortunately, Mr. Obama has come up short of that standard with his decision to reject public spending limitations and opt instead for unlimited private financing in the general election." The Washington Post reports says Obama "had an opportunity here to demonstrate that he really is a different kind of politician, willing to put principles and the promises he has made above political calculation." Politicians "do what politicians need to do. But they ought to spare us the self-congratulatory back-patting while they're doing it." The Wall Street Journal says in an editorial that the decision "is a large and telling Obama flip-flop." USA Today says in an editorial that Obama's decision is "disappointing...particularly for a candidate who claims to be running as a reformer and a different kind of politician."
Move Seen As Making Sense Despite Bad Press The Washington Post reports in a front-page story that Obama's decision "drew criticism from adversaries and allies alike but could provide him with a significant spending advantage over" McCain. Given his "groundbreaking success in raising money in the Democratic primaries, estimates of how much he could collect for the general-election run to $300 million or more, a sum that would allow the senator from Illinois to compete even in traditionally Republican states."
Several prominent pundits also echoed this sentiment. Cox News Service reports that Thomas Mann, "a political analyst at the Brookings Institution, said that despite the hammering that Obama is likely to receive, 'the benefits...clearly outweigh the costs.' Given that upward of $300 million is likely to be spent on behalf of McCain by the party and outside groups in addition to $85 million in public financing, Obama 'would have been crazy to decide otherwise,' Mann added." Similarly, the Boston Globe reports that Norman Ornstein, "a resident scholar on politics and elections at the conservative-leaning American Enterprise Institute, said Obama's move makes political sense. 'When you're looking at the kind of money he can raise now from small donors and your first goal is to win...there's nobody who wouldn't do this,' he said."
Move Seen As Dooming Public Financing System In a New York Times, analysis, Leslie Wayne says with Obama's decision, the public financing system "is facing the most critical threat to its survival." Obama's decision "to opt out of public financing -- along with the ability of the Internet to let candidates raise large sums of money from small donors -- may do more to shatter the system than all of the loopholes it has spawned."
The Washington Post reports this morning that Sen. Barack Obama is up on the air in 18 states with his first ad of the general election campaign, and the "core message of" the "60-second spot -- 'the country I love' -- is designed to neutralize perceptions that" Obama "is less than patriotic, in the wake of his earlier decision to forgo a flag pin and his wife's comment about not having been really proud of her country before now." In an analysis, the New York Times says that the spot "addresses the problems Mr. Obama needs to address and tacks him back to the center."
However, perhaps the most interesting things about the ad is where Obama's camp has chosen to run it. The Los Angeles Times reports the commercial is airing "in a dozen battleground states, but also in six that lean heavily Republican: Montana, North Dakota, Indiana, North Carolina, Georgia and Alaska." The Times notes, however, that Obama "isn't advertising in Minnesota and Oregon, two of the most fiercely contested states in the 2004 race between President Bush and his Democratic challenger, Sen. John F. Kerry. Bush narrowly lost both states, and McCain has made them prime targets for 2008."
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The AP reports Barack Obama has secured the endorsement of the American Federation of State, County and Municipal Employees, "a political powerhouse union that was a strong backer" of Hillary Clinton. AFSCME President Gerald W. McEntee said, "Barack Obama has the experience, judgment and strength to reinvigorate our economy and resurrect the American dream." The AP adds AFSCME is "the largest union for workers in the public service sector with 1.4 million members nationwide, including bus drivers, child care providers, custodians and librarians."
The AP reports Barack Obama "personally apologized Thursday to two Detroit-area women who were barred from sitting behind him during a campaign rally earlier this week because they wore Islamic headscarves." Obama "released a statement saying he had 'reached out' to the women, Shimaa Abdelfadeel and Hebba Aref." In the statement, Obama said, "Our campaign is about bringing people together, and I'm grateful that Ms. Abdelfadeel accepted our apology and I hope Ms. Aref and any who were offended accept my apology as well."
Sen. John McCain yesterday campaigned in Minnesota, where he had great praise for Gov. Tim Pawlenty (R), considered one of the leading candidates for joining the McCain ticket. The AP reports that McCain "made no secret of his regard for" Pawlenty, saying Pawlenty "has 'a very big place in the future of the Republican Party.' But McCain wouldn't say whether that place would include a spot on his ticket." The Minneapolis Star Tribune reports that in St. Paul, McCain "was introduced by Pawlenty, who called the candidate 'a straight talker, a populist who calls it as he sees it.'" The St. Paul Pioneer Press adds that McCain's "first campaign appearance of the year in Minnesota clearly suggests he thinks he can win the state in November."
The AP reports Sen. John McCain flew to Iowa to view storm damage yesterday, the same day as President Bush, "although the two did not cross paths." The Sioux City Journal reports on McCain's visit to Columbus Junction, IA, saying that the GOP candidate "spent more than an hour walking around this small Louisa County town with the mayor, sheriff and other area officials, meeting with business owners and shaking hands with townspeople who came out to greet him." The Burlington Hawk Eye reports that Mayor Dan Wilson "said the fact that McCain toured the community meant a lot to the residents of Columbus Junction. 'It's uplifting for the community,' Wilson said. 'We thank you for all your support and your continued support in the future.'"
Despite McCain's warm welcome by local leaders, some Democrats took issue with the move. The AP reports Patrick Dillon, chief of staff to Iowa Gov. Chet Culver (D), said Thursday that McCain "ignored the governor's request to cancel a campaign visit amid a massive flood recovery effort in the state." He "said the governor was concerned that McCain's trip would divert local law enforcement from the flood recovery effort to provide security for McCain. David Roederer, who chairs McCain's campaign in Iowa, said McCain's trip didn't hamper Iowa's recovery operation" and that the campaign had provided "much of its own security."
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USA Today reports that Sen. John McCain is scheduled to visit Canada today "to speak about free trade and other issues." McCain is expected to highlight his support for free trade, particularly NAFTA, and contrast his position to that of Sen. Barack Obama. McCain "will emphasize the overall economic benefits of increased trade, including new kinds of jobs for which workers can be retrained, senior adviser Charles Black said."
However, some are questioning the decision. The Los Angeles Times reports that McCain's "advisors believe the border crossing will show McCain in his best light -- as a leader on the world stage unafraid to embrace an unpopular position and optimistic about the new jobs that trade could create. But some political analysts wondered why McCain would choose to highlight his position in attention-grabbing trips -- whether to Canada or to economically depressed areas like Youngstown, Ohio." McCain "needs to win the support of independent voters, many of them blue-collar workers worried that" NAFTA "will cost them their jobs."
A Fox News/Opinion Dynamics poll of 900 registered voters taken June 17-18 shows Sen. Barack Obama leading Sen. John McCain 45%-41%. If Ralph Nader (Green) and Bob Barr (Libertarian) are included, Obama leads McCain 42%-39%, with Nader pulling 4% and Barr taking 2%.
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An agreement reached yesterday by members of the House and Senate on revisions to the Foreign Intelligence Surveillance Act (FISA) is being portrayed as a win for President Bush on a crucial homeland security issue. USA Today reports that the compromise "would have a federal district court review certifications from the attorney general saying the telecommunications companies received presidential orders telling them wiretaps were needed to detect or prevent a terrorist attack. If the paperwork were in order, the judge would dismiss the lawsuit."
The New York Times reports on its front page that the bill, "particularly the immunity provision -- represents a major victory for the White House after months of dispute." The Washington Post reports the "breakthrough on the legislation came hours after the White House agreed to Democratic demands for domestic spending additions to an emergency war funding bill. Taken together, the bills -- two of the last major pieces of legislation to be approved by Congress this year -- suggest that Bush still wields considerable clout on national security issues but now must acquiesce to Democratic demands on favored domestic priorities to secure victory."
The Wall Street Journal reports on its front page that the compromise ensures "that much of the controversial surveillance operation created by...Bush in secret will outlast his administration." After "a yearlong battle," the Los Angeles Times reports, the agreement "signaled an end to a bitter standoff between the Bush administration and leading House Democrats." Despite criticism from Sen. Feingold, who called the deal "a capitulation," the measure "now appears poised to prevail in the House as well" as the Senate. The Washington Times, meanwhile, notes that the new legislation "sunsets in 2012, ensuring that Congress will revisit the issues."
With network news coverage last night focusing on the ongoing floods in the Midwest, none reported the development. Fox Special Report, however, reported, "The measure settles the largest sticking point in the long debate over the legislation: whether to give immunity to telecommunications companies that help the government monitor phone and computer lines after the 9/11 attacks."
GOP Sens. Jim DeMint and Jim Bunning are offering an amendment to a foreclosure relief bill in order to stall the measure. The Hill reports the amendment seeks to "capitalize on special low-interest, 'VIP' loans Countrywide gave to" Sens. Chris Dodd and Kent Conrad and would "require a review of how Countrywide Financial would benefit from a housing bill now being debated on the Senate floor." House Minority Whip Roy Blunt said on Fox News' Your World, "For the very people who were supposed to be looking at the industry to either know what was going on in the industry, one, or, two, have such close relationships there that they couldn't monitor the industry, I think is a big problem and it ought to be looked at."
Meanwhile, the Financial Times reports, "The path to completion of new US housing legislation experienced its latest twist on Thursday when the White House threatened to veto a Senate version of the bill that had won the support of many Republicans."
Many Senators Don't Have Mortgages The Politico publishes a chart of senators' answers to a survey of their mortgages. "A substantial number of senators -- being on average older and wealthier than the US population -- don't have mortgages at all."
Yesterday's announcement that over 400 people have been arrested in a national mortgage fraud crackdown dubbed "Operation Malicious Mortgage" is covered widely in this morning's papers. The networks also covered the story, combining their reports on mortgage fraud with their coverage of the arrests of two former Bear Stearns executives on charges relating to misleading investors regarding the health of the subprime credit market earlier this year.
NBC Nightly News reported, "Federal agents revealed today they'd rounded up more than 400 people since March, charged with mortgage fraud, cheating individual homeowners and banks with, for example, phony foreclosure rescue schemes." The CBS Evening News reported, "The mortgage fraud charges run the gamut, from phony bankruptcies and foreclosure schemes, to bogus applications and builder kickbacks. And no corner of the nation was untouched, as scammers coast to coast sought to cash in on an overheated real estate market."
ABC World News reported, "Justice Department officials say the massive fraud extends from Wall Street to Main Street. The 400 arrests announced today are part of a broad effort, with investigations in every FBI field office in the country." The AP reports, "The FBI put the losses to homeowners and other borrowers who were victims in the schemes at over $1 billion."
According to the New York Times, "The FBI has more than 40 task forces around the country that are working with other federal, state and local law enforcement agencies on mortgage fraud issues. Its caseload has nearly doubled in the last three years, from 721 mortgage fraud cases in 2005 to more than 1,400 cases that are currently pending."
The AP reports, "Two former Bear Stearns hedge fund managers were hauled into jail Thursday and charged with lying to investors about the collapse of the subprime mortgage market, perhaps signaling the start of a wave of prosecutions arising from the housing meltdown. Ralph Cioffi and Matthew Tannin were accused of encouraging investors to stay in their hedge funds, heavily exposed to subprime mortgages, even as they knew the credit market was in serious trouble." The "eventual implosion of their two hedge funds cost investors $1.8 billion and started the domino effect that led the demise of Bear Stearns itself."
NBC Nightly News reported the Bear Stearns execs are "the first senior executives from Wall Street investment banks to face criminal charges in connection with America's massive mortgage crisis." ABC World News reported attorneys for both men "claim they are innocent, that they are being made scapegoats for the massive subprime collapse."
The Washington Post, in a front-page story, says the indictment "alleges that the two men misled investors by offering upbeat assessments of the fiscal health of two Bear Stearns hedge funds, even as these executives harbored deep doubts about their viability. Cioffi was also charged with insider trading for allegedly moving $2 million of his personal money out of one of the funds, which were heavily invested in subprime-mortgage-backed securities, and into a better-performing fund he managed."
The Wall Street Journal reports, "The managers pleaded not guilty and were released. Messrs. Cioffi and Tannin posted $4 million and $1.5 million bonds, respectively, secured by various properties. ... To win their case at trial, prosecutors will need to convince a jury that the gaps between Messrs. Cioffi and Tannin's public and private assessments of their funds underscore a deliberate effort to help themselves at the expense of investors."
Under the headline "Cheney Gets Last Laugh," The Hill reports Vice President Dick Cheney "has won his battle to withhold records from the public despite efforts by Congress and other critics who say they should be open to scrutiny." Democrats "are conceding defeat," with "the party's top investigator in the House of Representatives" acknowledging "that there is nothing more he can do to force the vice president's hand." Rep. Henry Waxman, chairman of the House Oversight and Government Reform Committee, said, "He has managed to stonewall everyone. ... I'm not sure there's anything we can do."
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Jay Leno: "And President Bush spoke at a campaign rally in support of John McCain. They raised millions and millions of dollars, most of which will be used to repair the damage of President Bush supporting John McCain at a campaign rally."
Conan O'Brien: "The latest rumor is that Hillary Clinton," who "lost the Democratic nomination," is "going to divorce Bill Clinton. ... Yeah, Hillary's exact quote was, 'Just because my dream didn't come true doesn't mean his shouldn't.'"
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