McCain likely to be outspent in election

WASHINGTON (Reuters) - He backs an unpopular war in Iraq, represents an unpopular political party and is endorsed by an unpopular president in the midst of an economic downturn.

As if that's not enough, Republican John McCain could be heavily outspent by his Democratic rival in the U.S. election in November to succeed President George W. Bush.

For every $1 the Arizona senator has raised, Democrat Barack Obama has raised $3. Hillary Clinton, unlikely at this point to beat Obama for the Democratic nomination, has raised two and a half times as much as McCain.

McCain is likely to have enough to compete with either Obama or Clinton, his campaign and Republican strategists say. But several acknowledged that the yawning money gap is another sign of the uphill battle any Republican would face this year.

"I can't emphasize enough how terrible the political environment is for Republicans," said one Republican strategist who requested anonymity to speak candidly. "It is dreadful."

McCain raised $77 million through the end of March, campaign finance records show. Obama raised $235 million by that point, while Clinton raised $189 million.

Sectors like finance and real estate that traditionally favor Republicans have given more to both Democrats this time, according to the Center for Responsive Politics.

And a larger portion of the Democrats' money has come from donations of $200 or less -- a sign of widespread support.

Obama and Clinton need that cash to continue their own battle for the Democratic nomination, while McCain clinched the Republican nomination in March.

But if trends continue, McCain is likely to be outspent significantly by the eventual Democratic nominee.

McCain's campaign is preparing to take $84 million in public funding after the Republican Party convention in September and he is challenging Obama to stick by last year's pledge to use public money and its accompanying spending limits.

"It would be unfortunate for the Democratic nominee, particularly if it was Barack Obama, to go back on his commitment to the public financing system," McCain spokesman Tucker Bounds said.

'A DISTRACTION'

Combined with other funding sources, McCain should have roughly $115 million to last the final two months of the campaign, said Colby College political science professor Anthony Corrado, a campaign finance expert.

Republican strategists expect Obama or Clinton could raise $200 million or more for the final sprint.

That means a bigger budget for television advertising and get-out-the-vote efforts that could put Republican strongholds like Montana and Virginia in play, Corrado said.

Republican experts say McCain will not be hurt by the money gap because the race at that point is likely to be determined by debates, media coverage and e-mail and other relatively cheap online communication methods.

"Neither side's going to lose because of lack of money," said Ron Kaufman, who advised Mitt Romney's unsuccessful campaign for the Republican nomination and served as a political adviser to former President George H.W. Bush.

Fundraising in the general election is "a distraction," said Michael Toner, a former Republican chairman of the Federal Election Commission.

"You've got to prepare for the debates, you've got to get out the vote. The last thing you want to be doing is going to some ballroom in Beverly Hills in September to raise money."

Strategists also point to the Republican National Committee, which is sitting on more cash than its Democratic counterpart and will benefit from a McCain joint fundraising effort that allows donors to give up to $70,000, far above the $2,300 limit for individual candidates.

McCain brought in $7 million to be shared with the Republican National Committee at a New York fundraiser on Wednesday, said a source close to the campaign.

Still, several strategists acknowledged that the record sums raised by Democrats serve as a worrisome indicator.

"I think it's clearly going to be a tough environment," said Scott Reed, who managed 1996 Republican nominee Bob Dole's presidential bid. "But you know, McCain's challenge is to overcome all that and rebrand the party his way."

(Additional reporting by Tim Gaynor, editing by John O'Callaghan)

(To read more about the U.S. political campaign, visit Reuters "Tales from the Trail: 2008" online at blogs.reuters.com/trail08/)