Obama: Public Finance System 'Creaky'

(INDIANAPOLIS) — The nation's system of public financing presidential elections is "creaky" and needs to be updated, Sen. Barack Obama said Friday, offering another possible argument for bypassing the three-decades-old system that has helped pay campaigns for the White House.

Obama, who has raised a whopping $234 million from about 1.3 million donors, said the limited amounts of money available from the federal treasury for presidential campaigns pose difficult choices for candidates raising large sums.

"I think that it is creaky," he said of the program financed by $3 dollar checkoffs in tax returns. "The amount of money raised through the public financing system may be substantially lower than the amount of money that can be raised over the Internet, which presents candidates then with some pretty tough decisions in terms of how they want to move forward if they want to compete in as many states as possible."

This year, the presidential nominees would be entitled to $84 million in public funds in the general election.

Speaking to donors at a fundraiser this week in Washington, Obama likened his fundraising to a "parallel public financing system," a remark that set off speculation that if he is the Democratic nominee he would be the first presidential candidate to forego federal funds in three decades.

But Obama on Friday said he had not made a decision about his general election money plans and said that if he secures the nomination he would meet with John McCain, the likely Republican nominee, to discuss ways to reduce the influence of outside groups in the election.

McCain is taking steps to accept the public funds, returning money he has raised so far that was designated for the general election.

McCain spokesman Tucker Bounds said the campaign "will always welcome an open discussion with Barack Obama, but he has clearly committed to public financing in the general election should he win his party's nomination, and we expect him to keep his word."

Obama noted that participation in the $3 checkoff had declined, reducing the amount of money in the fund. Obama himself, however, did not check off the $3 designation in his 2005 and 2006 tax returns.

Obama, who had checked off the box in previous returns, said it was an oversight

"It may be a situation where my accountant didn't do it," he said.

His campaign later said that an amended 2006 tax return did assign the $3 to public financing.

In talking to reporters, Obama also offered a discourse on abortion, noting that he has received support from anti-abortion Democrats such as former Rep. Tim Roemer of Indiana and Sen. Bob Casey of Pennsylvania.

"It may be that those who have opposed abortion get a sense that I'm listening to them and respect their position even though where we finally come down may be different," he said.

"The mistake that pro-choice forces have sometimes made in the past, and this is a generalization so it has not always been the case, has been to not acknowledge the wrenching moral issues involved in it," he said.

"Most Americans recognize that what we want to do is avoid, or help people avoid, having to make this difficult choice. That nobody is pro-abortion, abortion is never a good thing."

On other topics:

—Obama weighed in on the controversy surrounding Clinton's former chief strategist, Mark Penn, whom she demoted because of his private work for the Colombian government on behalf of the free trade Agreement, a pact that Clinton opposes. Colombia was a client of Penn's large public relations firm, Burson-Marsteller.

"It was surprising to me that a high-ranking, if not the highest-ranking member of Senator Clinton's team would be engaged in business activities and lobbying that was directly contrary to a position that Senator Clinton had taken," Obama said.

"I know that if staff of mine were putting me in that kind of position, I would get rid of them," he said.

Clinton spokesman Jay Carson argued that the Obama campaign took no action against one of its senior economic advisers, Austan Goolsbee, when he met with Canadian government officials to discuss NAFTA. According to a Canadian memo of the meeting, Goolsbee said the debate over free trade in the Democratic presidential primary campaign was "political positioning" and that Obama was not really protectionist. Goolsbee said his comments were misinterpreted by the memo's author.

— Obama acknowledged that besides an unusually large number of small donors, he also has relied on well-connected fundraisers with corporate interests. But he said his financial operation is separate from his policy positions.

"We have a national finance committee, they are very active but they don't interact with me," he said. "They are not as a general rule part of my day-to-day policy or advisory committee. Although there are some people who have raised money for me who are also prominent business leaders, so if we were putting forward an economic plan and there was some expertise there we would tap into it."

— Obama called for company shareholders to have a say in how much executives get paid as he pushes his populist message.

Obama said he wants Congress to pass legislation he has sponsored that would require corporations to have a nonbinding vote by shareholders on executive compensation packages.

Under Obama's legislation, shareholders could not veto a compensation package offered to an executive and would not place limits on pay. Rather, they would have a means to publicly express their position.

A similar bill passed the House last year.