The Trail

Friday, August 15, 2008

CAMPAIGN CONTRIBUTIONS

Tallies Indicate Troops Favor Obama

The Center for Responsive Politics has found that the bona fide war hero is garnering far less financial support from the troops than the Harvard-trained lawyer.

"Democrat Barack Obama has received nearly six times as much money from troops deployed overseas at the time of their contributions than has Republican John McCain, and the fiercely antiwar Ron Paul, though he suspended his campaign for the Republican nomination months ago, has received more than four times McCain's haul," the report said.

The report also included this surprise: "Members of the armed services overall -- whether stationed overseas or at home -- are also favoring Obama with their campaign contributions in 2008. . . . Although 59 percent of federal contributions by military personnel have gone to Republicans this cycle, of money from the military to the presumed presidential nominees, 57 percent has gone to Obama."

The analysis of campaign records found Obama has raised more than $60,000 from 134 men and women deployed overseas. McCain has raised $10,665 from 26 deployed donors.

-- Matthew Mosk

TALKING TAXES

Obama Lowers Rate Targets

Barack Obama said he would set the tax rates paid on most dividends and capital gains at 20 percent, well below where they stood during most of Bill Clinton's presidency and lower than most Republicans expected.

He also said a proposal to impose Social Security taxes on incomes over $250,000 would not start for at least a decade.

Obama has said for some time that he would raise dividends and capital gains tax rates from the 15 percent level reached in President Bush's 2003 tax cuts, but he put the range somewhere between 20 percent and 28 percent. Writing in the Wall Street Journal on Thursday, two Obama advisers picked the lowest point in that range -- a decision made as McCain pummels Obama as a tax hiker in a barrage of ads running during the Olympics.

For much of the 1990s, most capital gains were taxed at 28 percent. The balanced-budget agreement reached between Clinton and Republican congressional leaders in 1997 brought that rate to 20 percent. Bush and the Republicans lowered it to 15 percent in 2003.

Until that year, dividends from stocks and other investments were taxed as ordinary income. And since most of that income went to the affluent, dividends were taxed at higher rates -- as high as 39.6 percent under Clinton. Bush also cut that rate to 15 percent in 2003.

By choosing a 20 percent tax, Obama is bringing tax rates on investments up to a midway point for families earning more than $250,000. Families below that level would continue paying the existing 15 percent rate. Obama economic aides Jason Furman and Austan Goolsbee noted that a 20 percent capital gains rate is well below the level set by President Ronald Reagan in 1986 -- and Bush didn't even think to lower the rate on dividends in his first round of tax cuts.

-- Jonathan Weisman

'THE OBAMA NATION'

Book Said to Be 'Full Of False . . . Attacks'

Barack Obama's campaign is aggressively contesting a new book criticizing the senator from Illinois, putting out a 41-page memo attacking what the campaign says is "full of false, rehashed attacks."

The memo was the latest criticism of "The Obama Nation," by conservative author Jerome R. Corsi. It has risen to the top of bestseller lists even as many of its allegations against Obama have been disproved by media outlets.

The campaign not only criticized parts of the book -- pointing out, for instance, that Obama did not give money to a Kenyan politician, as Corsi suggests -- but also rebuked the author for some of his controversial remarks. Corsi had once referred to Islam as a "virus" and Pope John Paul II as "senile."

The sharp reaction reflects, in part, the campaign of 2004, when Corsi wrote a book called "Unfit for Command," in which veterans attacked Sen. John F. Kerry's Vietnam War record.

"Jerome Corsi is a discredited liar who is peddling another piece of garbage in order to continue the Bush-Cheney politics he helped perpetuate four years ago," said Obama campaign spokesman Tommy Vietor. "His is one of what will likely be many lie-filled books rushed to print this election cycle that are cobbled together from debunked Internet sources to make money and advance a partisan agenda. We will forcefully respond to these smears with all means at our disposal."

The campaign put the report on its FightTheSmears.com Web site, which counters what it considers the false allegations and wild rumors about the candidate that have proliferated online.

-- Perry Bacon Jr.

PUBLIC FINANCING

McCain Gets Boost From the FEC

Staff attorneys for the Federal Election Commission have recommended that the commissioners accept John McCain's position that he was legally entitled to withdraw from public matching funds during the Republican primaries, according to an 18-page memorandum made public Thursday on the FEC Web site. The commission is scheduled to vote on the matter next week.

Questions first arose about the legality of McCain's decision to withdraw from the federal matching program after he filed papers with the FEC showing he had taken out an unorthodox bank loan to help his campaign stay afloat.

McCain's cash-strapped campaign borrowed $1 million from a Bethesda bank two weeks before the New Hampshire primary by pledging to enter the public financing system if his bid for the presidency faltered. That was on top of a $3 million bank loan in November, and another $1 million loan shortly before the Super Tuesday contests that pledged unprocessed contributions and other campaign assets as collateral.

The lending terms brought condemnation from Democrats and prompted questions from then-FEC Chairman David Mason. He questioned whether McCain may have inadvertently committed himself to entering the public financing system for the remainder of the primary season by holding out the prospect of taking public matching funds in exchange for the $1 million loan in December.

McCain's attorneys and a Fidelity & Trust president said all along they thought the loan agreements were carefully scrutinized in advance to make sure they would pass muster with federal banking regulators and the FEC.

The recommendation sent by staff to the FEC members suggests that the commission's legal experts agree.

-- Matthew Mosk