Loan Talk Underscores McCain's Money Problems
As Sen. John McCain (R-Ariz.) continues to mull whether to accept public financing for the remainder of the GOP presidential primary campaign, his campaign manager is speaking openly about the possibility of taking out a seven-figure loan to avoid the limits that come with accepting public funding.

McCain shakes hands with a World War II veteran as he campaigns Wednesday in Columbia, S.C. (AP Photo)
Rick Davis, who took over control of the day-to-day operations following a huge staff shuffle this summer, has broached the subject of a large loan to fund the campaign's activities in early states. The idea was discussed as recently as a phone call this week with senior staffers, according to sources familiar with that conversation.
Jill Hazelbaker, McCain's communications director, said the candidate himself has never considered the possibility of taking out a loan to avoid the spending limits that come with accepting public financing. (In Iowa, the spending cap is around $1.5 million while in New Hampshire it is approximately $800,000.)
Regardless, the debate within McCain's inner circle over the campaign's fundraising shows the financial straits now facing the one-time frontrunner.
In reports filed at the end of September, McCain showed $5.7 million raised over the past three months. While he had roughly $3.5 million left in the bank, just $1.8 million of that total can be spent on the primary. When factoring in the $1.7 million in debt McCain carried, his campaign is barely breaking even.
Given those financial struggles, it was baffling to many observers inside and outside the campaign when McCain approved a significant expenditure of funds on a 100,000-piece direct-mail drop in Iowa this week. McCain, who skipped Iowa in 2000, has struggled to build support in the state; privately, his aides have downplayed the importance of the state to his hopes at winning the nomination.
Not so New Hampshire. McCain continues to run strong in the state, with most polling showing him in a competitive three-way race with Mitt Romney and Rudy Giuliani. McCain has spent scads of time campaigning in the Granite State -- the site of his 2000 upset over George W. Bush -- and has already run television commercials there.
Given McCain's limited resources, there is a strong argument to be made that he should focus all of his time and money on New Hampshire in hopes of winning an upset victory there and using it to catapult him into contention in South Carolina, Florida and beyond.
There is no set date for when a candidate must decide whether or not to take public money for the primary, although one election lawyer said that in order for McCain (or any other candidate) to be able to borrow against the publicly provided money, he must inform the FEC of his decision by early November. Only of the top-tier candidates on either side -- John Edwards (D) -- has said he will take public financing for the primary.
John Weaver, a former senior adviser for McCain's presidential campaign, said there is no real option left for McCain other than to take public financing.
"They have the luxury of not having a choice in regard to accepting matching funds and giving their army hope of having enough funds to compete in the early primary states," Weaver said. "John has always been the superior candidate in the field, and not taking matching funds deprives this superior candidate from competing for the nomination. Not accepting matching funds out of pride is malpractice."
By Chris Cillizza |
October 18, 2007; 1:15 PM ET
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Posted by: pach12 | October 20, 2007 8:43 AM
Imagine that, a Republican taking a huge loan with promises to re-pay in the future! Par for the course for the party that somehow manages to preach fiscal responsibility without laughing. Maybe Bush can push through a huge tax cut for the rich (again) while increasing spending (again) and then blame Democrats for the deficit.
Posted by: vfazio | October 19, 2007 3:03 PM
"That's the media's greatest bias. They aren't biased against liberals or conservatives; they're biased against depth"
A poster at a local news paper (star tribune) blog made a similar comment recently. He argues that depth doesn't sell. Its not that the media doesn't 'want' to write in depth stories, its that such don't sell. In order to stay alive, you have to sell ads, in order to sell ads you have to establish an audience. To establish an audience you have to identify a market & deliver what that market wants. If the largest market wants a quick skim of "who's winning?" that's what the media will deliver.
I wonder how many people watched Frontline on Tues night - an in depth analysis of Cheney's influence on White House legal policy - vs whatever else was on? I imagine reruns of 'three's company' drew a larger audience.
Posted by: bsimon | October 19, 2007 11:16 AM
Oh, I totally agree. Even for the big candidates, there's little detail about their policies. It was a big deal when Hillary came out with her healthcare plan, but major media outlets didn't do much analysis of it. They said the plan exists, they quoted her campaign about why it's great, and they quoted Republicans about why the plan is terrible. No real information at all.
The media is allergic to facts, particularly detailed facts. Political coverage is all about how candidates act, what they say about each other, and how they compare in fundraising and polls. But you never get more than a soundbite about the candidates' real policies. That's the media's greatest bias. They aren't biased against liberals or conservatives; they're biased against depth.
Posted by: Blarg | October 19, 2007 10:50 AM
Blarg, point taken. I think what I was trying to say was that it's a shame that extra leg work is required to find out what those who are not prominent candidates think about the issues. The only news coverage you hear about Biden, Dodd, Richardson, Kucinich and Gravel is how unlikely they are to win - actually, that's starting to be true of Obama and Edwards, too, although both of them at least have sufficient support that some of their policy proposals are covered as well. I think we are being sold Clinton II by the media, which has decided that this is what will be... and I have to wonder how and why.
Posted by: bokonon13 | October 19, 2007 9:56 AM
con_crusher, are you new here, or did you post as a different name previously?
Bokonon, if you want to find out more about Biden's policies, you can look on his website. You probably knew that, and it doesn't affect your call for more media coverage of policy positions. But having looked at his site, I see why Biden's Iraq plan is the only thing anyone mentions. His other policies are very conventional and moderate. He wants to change the health care system less than Clinton, and his environmental policy is full of minor improvements without any major changes. His policies would fit in great back in 1988. I can't blame the media for only talking about his Iraq plan; it's all he's got.
Posted by: Blarg | October 19, 2007 8:46 AM
Check out these JUST released detailed House ratings:
http://www.campaigndiaries.com/2007/10/october-ratings-democrats-feel-better.html
Posted by: campaigndiaries | October 19, 2007 2:24 AM
response: (bokonon13 | October 18, 2007 11:06 PM)
In 2000 I would have considered throwing my support to McCain. For a while he really seemed like a maverick. He stood up to the religious right. He supported pardoning the African-American boxer who was in the "wrong" place at the wrong time. Heck, he ran against the Bush money machine. But after the 2000 election, he kept grabbing his ankles for the Bush administration. Then he gave a keynote address at Liberty U. Now he's suddenly "Mr. Conservative," which would probably change in a general election. In essence, he's a flipflopper and no maverick at all.
Posted by: con_crusher | October 19, 2007 1:12 AM
Let's cut to the chase. McCain's best chance was in 2000. Edwards' was four years ago. They've both had nationwide exposure, yet neither is creating any real interest in the electorate. Whether it's sooner or later, both of their campaigns are virtually kaput. McCain has simply been too inconsistent and made too many blunders. Plus, he's really old. McCain should keep running for Senator until he can't run anymore, and then retire in Arizona. He's virtually another Bob Dole - too little too late.
Posted by: con_crusher | October 19, 2007 1:07 AM
Let's cut to the chase. McCain's best chance was in 2000. Edwards' was four years ago. They've both had nationwide exposure, yet neither is creating any real interest in the electorate. Whether it's sooner or later, both of their campaigns are virtually kaput. McCain has simply been too inconsistent and made too many blunders. Plus, he's really old. McCain should keep running for Senator until he can't run anymore, and then retire in Arizona. He's virtually another Bob Dole - too little too late.
Posted by: con_crusher | October 19, 2007 1:07 AM
Mark: I was kidding and ribbing you a little at the same time. This is what I like to see from folks out in the real world, make up your own mind and support whoever you choose. Recently, I saw an interview with this guy, [Land ?] from the Christian right, and he came very close to saying he would support Mitt. I mentioned in an earlier post about the trend toward Mitt, and it seems to be growing pretty quick in these past weeks.
Posted by: lylepink | October 19, 2007 12:32 AM
why can't you folks play nicely? JD, out of curiosity, what don't you like about McCain? and if not him, who IS your candidate? (I am asking seriously... I respect your opinion, but I don't remember if you have come down on one side or another.)
and Zouk, you will probably ignore this, but seriously, why don't you give the "Dirty Harry" and slams at the patriotism/intelligence/bravery of "Libs/Dems" a rest? You have to know that you are neither persuading nor intimidating anyone who does not agree with you already. I remember one point in the conversation, about a month ago, when you argued a few points with facts, and addressed the arguments of the other side intelligently rather than dismissing them with simple insults. I still didn't agree with you, but your presentation then did more for your side than name-calling ever could. I would like to see you do that again -- others on this board have been able to make logical and intelligent cases for conservative positions, and each time they do, it has helped me to understand better.... ahh, I'm probably just talking to myself at this point.
Mark, no offense to Lyle, but I agree with what I think your point was, that being that every voter of both parties has a definite interest in having the debate be as inclusive and policy-focused as possible - and then left for the voters to decide, rather than be resolved by the media before a single vote is cast. I don't know as much as I should about Biden, for example, with the exception of his proposed partition of Iraq. Where is he on health care, the environment, outsourcing, etc.? I'd rather have that information than Clinton's "inevitability" in my ears and eyes when I listen to and watch the news, but without a single vote being cast, it seems that Hillary is just waiting to be crowned. I'd also like to hear more from Dodd and Richardson, especially Dodd. Hopefully the media will provide us with the necessary data to make an informed choice, rather than feeling empowered to make it for us.
Posted by: bokonon13 | October 18, 2007 11:06 PM
Claudia/drindl, calling me the base for McCain is like calling you the base for Lieberman. Maybe the guy belongs to the party I end up voting for more often than not, but it hardly puts me in his camp.
Now, you can either accept this accurate assessment, or reveal yourself to be an intolerant partisan and attack me.
Posted by: JD | October 18, 2007 10:23 PM
McCain needs to forget about cash and worry about portraying himself as a viable challenger to Hillary with conservative credentials.
Posted by: parkerfl | October 18, 2007 9:08 PM
lyle, you are personally more persuasive than the probably fictitious woman who solicited my $25 for Obama yesterday. But until Biden drops out on the D side, I have no incentive to help any other D. We'll "talk" then.
Posted by: mark_in_austin | October 18, 2007 8:46 PM
Mark: Help me out a little bit and give your money to Hillary [In my name, I can't afford to give] instead of McCain and get on a winner.
Posted by: lylepink | October 18, 2007 7:48 PM
Weaver said: "John has always been the superior candidate in the field, and not taking matching funds deprives this superior candidate from competing for the nomination..."
If he were truly the superior candidate, wouldn't he have $5 million in the bank, and not even need public financing?
But I think he should take the loan option. That will enable him to stay in the race longer, and spend whatever he wants without any worry about "Can I afford it."
Posted by: demonrats | October 18, 2007 7:02 PM
The problem with accepting public financing is that there simply isn't enough money. The FEC allocates money in the following order: conventions, general, primary. It's around $100 million for the conventions and $150 for the general (2004 numbers). The remaining money is spread pro rata among the candidates until all of the matching funds are paid. In the last three presidential elections, the final matching funds were paid the year after the election when Treasury finally had enough funds. So, as a candidate, you can't rely upon matching funds to be there when you need them. A lot of candidates take out primary loans to cover the gap until matching funds arrive in dribs over the next year.
Posted by: caudlea | October 18, 2007 6:39 PM
wow. That's mighty big of him.
"Blackwater CEO Says He Won't Let Iraqi Government Prosecute His Employees
By: Logan Murphy @ 2:09 PM - PDT Washington Times:
A defiant Blackwater Chairman Erik Prince said yesterday he will not allow Iraqi authorities to arrest his contractors and try them in Iraq's faulty justice system.
"We will not let our people be taken by the Iraqis," Mr. Prince told editors and reporters at The Washington Times. At least 17 of 20 Blackwater guards being investigated for their roles in a Sept. 16 shooting incident are still in a secure compound in Baghdad's Green Zone and carrying out limited duties.
"In an ideal sense, if there was wrongdoing, there could be a trial brought in the Iraqi court system. But that would imply that there is a valid Iraqi court system where Westerners could get a fair trial. That is not the case right now," said Mr. Prince. Read more...
Here is video from CNN of family members telling horrific tales of their loved ones having their skulls blown up by members of Blackwater during the September 16 massacre in Baghdad:
Download (141) | Play (180) Download (279) | Play (98)
The arrogance is staggering. His company has been terrorizing Iraqi citizens for years and now he says his men can't get a fair trial there. Welcome to the world you helped to create, Mr. Prince. Iraq is a sovereign nation and has every right to enforce their laws. Prince goes on to say that his men might be tried in a U.S. military court, but after learning from a U.S. Colonel that his men turned their weapons on our own soldiers, he may find he's no more welcome here than in Iraq.
"
Posted by: RUFUS11_33 | October 18, 2007 6:09 PM
"drindl demonstrates why the D's will lose this cycle"
Like they did on 06, right. Anything is better than eleceting r's. the choice them becomes indy or democrat. Time will tell. But you are a lost puppy zouk. your avatars got you so spun around you don't what is real and what is propoganda anymore. Get out of political conversation. It's hurting your frame of referance. Join reality, zouk. What will you do without your avatars? Just because Rush thinks he can buy off critizism, doesn't mean he can.
Some things you cannot buy your way out of. Treson and waging war against your own country are two of them. Attacking minorities is another. Attack the old/young or sick is another. Rush is done. He just dones't know it yet. The domino's will be sure to follow. What will you do then. What if you actually have to think for yourselves? How will you function?
Posted by: RUFUS11_33 | October 18, 2007 5:10 PM
What do we have here today?
you people should really be nicer to each other. You get further with honey. :)
Just messing with you
Zouk is a fascist. couldn't help myself.
the gop is done for a generation. Why give these liars and propogandists any credibility? Credibility zouk. your people have none. Why? you sqandered it. point the finger all you want. Accountability. Credibility. It will take time to get those two things back. The more you fight, the digger you dig your own holes.
Posted by: RUFUS11_33 | October 18, 2007 5:05 PM
Mccain? Who is john mccain? :)
Posted by: RUFUS11_33 | October 18, 2007 5:01 PM
"Democrats had anticipated defeat, and Senator Harry Reid of Nevada, the Senate majority leader, immediately issued an angry statement. "
with dirty Harry as your leader, you can anticipate many more defeats. harry's response will be as usual - issue an angry statement. what a piffle of a man. you can follow him down to 3% approval ratings.
Posted by: kingofzouk | October 18, 2007 4:29 PM
zouk, "you have a long history of ignoring [the topic at hand]. why stop now?"
Posted by: bsimon | October 18, 2007 4:27 PM
mibrooks-
Try a little optimism for once.
Look at it this way, we have a turnip for a president now, so at least if Hillary is elected, we'll be moving in the proper direction.
Posted by: bsimon | October 18, 2007 4:26 PM
claudialong - "I have to laugh when people call her a liberal....". YTou're right there. Hillary isn't right or left, she's all for herself. The only problem I have with people like you is that you would plug your nose and vote for this awful disaster. A turnip would make a better president than Hillary. Heck, outside of ROmney, any of the Republican's would make a better president.
Posted by: mibrooks27 | October 18, 2007 4:22 PM
drindl, you have a long history of ignoring reality. why stop now?
As far as what your time is worth, I can only assume based on the content of your prose, that the value is similar to ice in alaska.
At least you recognize that a direct copy of your own words is addled and senseless. there may be hope for you.
Posted by: kingofzouk | October 18, 2007 4:20 PM
As usual, koz, your statments are addled and senseless. So I shall go back to ignoring you. Not worth my time.
Posted by: drindl | October 18, 2007 3:59 PM
drindl demonstrates why the D's will lose this cycle. The base wnats someone so electable, there is no one on earth that can dis satisfy them regardless of principles, policies or corruption and deceit.
Posted by: kingofzouk | October 18, 2007 3:57 PM
JD demonstrates why the R's will lose this cycle. The base wnats someone so idealogically pure, there is no one on earth that can satisfy them -- particularly since the standards for the social cons and the bizness cons are different. They will have no unifying savior this time.
I really have to say I'm surprised. I think McCain is a good man [although I think he's changed a lot since he decided he wanted to be president] and I never expected his party to throw him under the bus for a few percieved slights...
Posted by: drindl | October 18, 2007 3:43 PM
"Would he have to raise money specifically to pay back the loan?"
Blarg, that's exactly how it works. There are many fundraisers in town to retire campaign debt from losers (sorry, but let's call a spade a spade).
McCain simply MUST take public financing. I see this loan idea being floated as a trial balloon, kind of a 'put up or shut up' approach to the whales.
McCain deserves this, I'm afraid. His positions fly in the face of much of the GOP (and conservative indies....), from immigration to campaign finance reform to education spending.
He made his bed, let him go nite nite now.
Posted by: JD | October 18, 2007 3:34 PM
AndyR writes
"proud and Mark, that has more to do with the fact that McCain's campaign Was being run by a bunch of rich-boy consultants that never had to balance a budget in there lifes since they were with the fund-raising machine of GWB."
Partially true. It is important to remember that it was a deliberate strategy. The theory is that if you act like the inevitable candidate and spend like the front runner, you will attract donors who want to be on the winning team, thus enabling the ongoing spending. It worked for GWB and thus far is working for HRC. For McCain it was a poor strategy unsuited to both his style and his message.
Posted by: bsimon | October 18, 2007 3:34 PM
Well, I think Hllary's been efficient. She has a machine there, which is what makes me uncomfortable. I have to laugh when people call her a liberal -- she ain't. That's what the base doesn't like about her -- too 'in tune' with corporations. While I think she'd be marginally better than any republican--enough so I'd vote for her, if I had to--her tightness with say, defense contractors, who are giving her lots--makes me nervous.
OF the R's, Rudy is an absolutely profligate spender,[$13 million spent and none of it on TV] dropping thousands of dollars a night on luxury hotels and spas and private planes, likely at the behest of his luxury-loving wifey, who, from all accounts, wears the pants in the family. Literally.
Posted by: drindl | October 18, 2007 3:34 PM
Proud, I missed that section of the original post. That takes care of the legality question. But I still don't see how it helps McCain pay back the loan. If his plan is to pay back the loan with public money, why doesn't he just take the public money instead of the loan?
Posted by: Blarg | October 18, 2007 3:32 PM
' It also is probably why the current administration couldn't balance a checkbook much less a two trillion dollar budget.'
Indeed -- when GWB needed money for a new business after he failed the last one, he'd always go to a Saudi prince godfather or a government official from an emirate. The money was always there for him.
Posted by: drindl | October 18, 2007 3:28 PM
I was thinking that if Huckabee has been the most efficient with his campaign's finances in the GOP what would be the Democrat equivalent. I was thinking the top three rankings would go
-Richardson
-Edwards
-Hillary
Any thoughts?
Posted by: AndyR3 | October 18, 2007 3:21 PM
proud and Mark, that has more to do with the fact that McCain's campaign Was being run by a bunch of rich-boy consultants that never had to balance a budget in there lifes since they were with the fund-raising machine of GWB.
If we assume that the ability of a campaign to properly control their money flow will be reflected in the way they run the governments budgets (which is legitimate since the same people who work on the campaign will work in the west wing) then I would think Mike Huckabee is making a good argument as a good steward for our finances at least from a GOP point of view. It also is probably why the current administration couldn't balance a checkbook much less a two trillion dollar budget.
Posted by: AndyR3 | October 18, 2007 3:12 PM
blarg- CC writes that "in order for McCain (or any other candidate) to be able to borrow against the publicly provided money, he must inform the FEC of his decision by early November." That means he can pay back the loan from the matching funds, which he will recieve as long as he is still in the race. correct me if I'm wrong here.
Yeah, mark, my $100 increments don't appear to have kept him in the black either. :(
Posted by: proudtobeGOP | October 18, 2007 2:57 PM
How would he pay back the loan? If he's able to stay in the race and jump-start his fundraising, he's fine. But if he's forced to drop out even with this extra money, what would he do? Would he have to raise money specifically to pay back the loan?
This seems like it could just make his problems worse. He should just take the government money. I'm not even sure why it's legal for a bank to loan money to a presidential campaign.
Posted by: Blarg | October 18, 2007 2:21 PM
'Dave, as a theoretical matter, I see "compassionate conservatism" as relying upon private initiatives and voluntarism, substantially. Where it differs from "laissez faire social Darwinism" is that it is amenable to using government to provide the lightning rod or focal point for volunteers, preferably the most local government, first.'
Your analysis is always interesting, Mark. What you are interested in is good government. But I beleive --and of course many 'conservatives' will articulate it -- that the movement [since Goldwater, at least] is based, not on smaller, efficient government, but no government at all. No taxes, no programs, essentially anarchy. I think that's why Ron Paul is so attractive to them. They are always talking about 'liberty', etc.
I think that's why it's such in interesting contradiction that they can then turn around and say the government should be given the huge, uncontrolled, unnaccountable power to spy on any American citizen, any time, any place, and arrest them on a whim for any reason they want, and hold them forever without charges. Ironic, to say the least.
Posted by: drindl | October 18, 2007 2:16 PM
McCain should take the public financing. My $25 twice a month is just not cutting it for him.
Posted by: mark_in_austin | October 18, 2007 1:58 PM
For someone who wrote the law that created the public financing system to opt out of said system strikes me as a bit strange. If the system doesn't work why did you pass the law? Plus McCain can use that exact argument to say why he took the money. Now we all KNOW he did it because he is broke but he still can use the argument to his benefit.
Posted by: AndyR3 | October 18, 2007 1:44 PM
Were there a quantum difference between the amounts he could get through loans and the government matching funds, I might say it was worth the risk to take out a loan. But the campaign is going to be over so fast, and the amounts of money involved in the two choices aren't that different. He'd be stupid to go the loan route.
Posted by: Budikavlan | October 18, 2007 1:38 PM
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Of course McCain will accept public financing.
It is who he is and what he does.
America simply does not need a Chief Executive whose every last nickel came to him from dear old Uncle Sugar.