Much has happened in the month since our last report to you on the status of Barack Obama's Presidential Campaign - and in that month, we continued to strengthen the campaign and Barack continues to demonstrate he is the only candidate with the strength, character and ideas to fundamentally change our broken politics and make the progress at home and abroad that America so desperately needs.

Our plan has always called for a focus on the early caucus and primary states, where this race will be shaped.

And now, as the Washington insiders focus on irrelevant and wildly inconsistent national polls, there are strong signs in Iowa, New Hampshire and South Carolina of the growing power and potential of this candidacy.

I will not address fundraising in detail in this memo, because there has been such voluminous coverage about the success you have all helped us achieve in this area.

Just a couple points to underscore, though. Our 258,000 + donors not only provide us the most muscular fundraising base in the field, it also is the bedrock of an unprecedented grassroots movement that will show its' strength in additional ways on the ground in January and February. And it a manifestation of the enthusiasm gap that Barack Obama enjoys in this race

Our financial success has also fundamentally altered the strategic calculus of the race. No longer can the quasi-incumbent candidate survive a stumble or two early and rely on an institutional financial and organizational advantage to recover. Obama has the financial and organizational assets to go toe to toe for the long haul with the largest political machine in the history of the modern Democratic Party - something that no pundit could have predicted six months ago.

We will have the strongest organization and deepest financial base in the Democratic field. If we have more momentum than other leading candidates heading into February 5^th, it will allow us to marry the success in the early states with our organizational superiority, a potent combination in what will be a quasi-national primary by that point.

Remember, each contest affects the next. Our strategy has always been to focus like a laser on the early states to create the momentum crucial to later contests. What has changed is our ability to also compete in February 5^th states more vigorously than any other candidate, allowing us to win the nomination under various nomination scenarios.

The month of July has fleshed out the true dynamic of this race - change versus more of the same. We saw this in the dispute with Senator Clinton over diplomacy with Barack arguing for turning the page on the policies of Bush-Cheney and in the YearlyKos Debate when Barack disagreed with Senator Clinton about the role of Washington lobbyists in blocking real progress. Barack believes we need a fundamental transformation of our politics, which is why as President he will rein in the power and influence of lobbyists. He doesn't agree that they represent "real people."

It becomes clearer every day that the American people desperately want to turn the page. An ABC/Washington Postpoll out last Friday shows Barack tied for the lead in Iowa and also found that 49 percent of Iowa Caucus goers were looking change and a new direction compared to 39 percent who wanted strength and experience. 

Barack is the candidate best position to bring about that fundamental change. As Barack often says - it is not enough to change parties in Washington, we need to change politics in Washington.

 

I. Debates

 

Barack was scored the decisive winner at the NAACP debate in Detroit on July 15^th, and also added the support of dozens of African-American leaders from around the country.

Jonathan Cohn, The New Republic :‘Barack Obama Shines at the NAACP Convention'-"Unless you are Abraham Lincoln and you're dedicating a Civil War memorial, it is virtually impossible to say something meaningful in three minutes. You can get through five or maybe six hundred words, which is the equivalent of two or three paragraphs, at best. And if you're appearing at a public event, you'll have to spend some of your time profusely thanking your hosts and flattering the audience. That leaves even less time to make an impression. And yet an impression is exactly what Barack Obama managed to make on Thursday, during his opening remarks at an NAACP candidates forum here." LINK

MSNBC: Obama stood out today at the NAACP forum -- for the first time outshining Clinton at a debate/forum. He took a much tougher, more direct tone than he did at the Howard University debate last month. He was greeted by thunderous applause and shouts -- much more so than any other candidate. And he received the loudest cheers for his well crafted opening speech, in which he weaved the theme "We still have more work to do" throughout.Clinton and Edwards were fine and delivered adequate answers, but they just could not match Obama's luster today. LINK

The voters also declared Barack a decisive winner at the CNN-YouTube debate last week, with focus groups of undecided voters in New Hampshire and South Carolina raving about his performance and the type of President he would be.

CNN's Mary Snow on New Hampshire Focus Groups: "We're here with 24 democrats, independents, who thought that Senator Hillary Clinton would be the best performer here tonight, but the results that we just got in, this is a focus group, show that Barack Obama got the most favorable in terms of the best performance from the 24 people who are here tonight." "Senator Barack Obama was showing some favorable responses to his answers. Some of the things that he got favorable responses were when he talked about fighting lobbyists, particularly on health care."

Frank Luntz on South Carolina Focus Group Results: "He is off the charts. I mean, this is as high as it can go. He's explicit. He has drawn the contrast. He has hit a home run. What I would like to do is I want to play for you the sound of what theyhad to say about Barack Obama so you can really understand it's not that he is a good politician and not his experience. It's as much his presentation and more importantly it's that he seems to represent people rather than politics.If you guys back there can roll the sound, this is why Obama will be shown as the winner of tonight's debate." (FOX News)

The pundit reviews have been more all over the map, leading Washington Post reporter Chris Cilizza to make the following comment on MSNBC July 24^th, "I worry because I watched the debate and I thought Senator Obama did well, I thought he did better than he had in previous debates, but I still thought senators Clinton and Edwards did better, and then as Chuck pointed out, we do have all these focus groups that said Obama did better. There appears to be some sort of chasm between the public perception and what, folks, like myself, you know, in Washington think. It worries me because I'm always worried as a journalist about missing the boat, you know, missing that Howard Dean rise or whatever it is, so I'm going to try and pay real close attention over the next couple days about what that's about. You heard Barack Obama talk incisively last night that we need to putting the national interest above special interest. He talked about lobbyists; he talked about he being the only candidate that wasn't accepting lobbyist or PAC money. That really resonates with people...And I think Obama probably scored points on that as the, sort of, outsider candidate." [Link, starts 50 sec. into video]

 

We, of course, agree. There is something happening out in the country, but it's hard to see from the Beltway.

 

There will be no shortage of debates in the coming months, allowing Barack ample opportunity to continue to demonstrate to the country the leadership and vision he will provide as President.

 

II. Issues

 

Over a three day period in Iowa earlier in the week, Barack made the forceful case for changing our broken Washington politics by reducing the influence of Washington lobbyists and putting the priorities of workers and families front and center again.

 

Barack highlighted the nefarious role the energy, health, drug and agribusiness industries have had on policies that have harmed our country and what as President he will do to stop it. In addition to not accepting contributions from Washington lobbyists and Political Action Committees in his campaign, Barack has offered the most sweeping government reform plan in the field, including banning anyone who leaves the employ of an Obama administration from lobbying the executive branch for the duration of his term. An outline of the plan is available here: http://www.barackobama.com/issues/corruption.

 

Early last week, Barack laid out a bold and comprehensive counter terrorism strategy that is winning rave reviews from experts for its scope, toughness and smarts. Barack, in an important difference with one of our opponents, feels that we are less safe than we were because of the ill-advised war in Iraq coupled with a lack of focus on hunting down those who have caused us harm and continue to plan to cause more harm to America.

 

The Obama plan to combat terrorism would change focus and put our sights squarely on Afghanistan and Pakistan, where the terrorists lurk and are gathering strength.

Highlights of the press coverage of the terrorism speech can be viewed here:

Associated Press: "Obama Vows to Hunt Down Terrorists": The Illinois senator warned Pakistani President Gen. Pervez Musharraf that he must do more to shut down terrorist operations in his country and evict foreign fighters under an Obama presidency, or Pakistan will risk a U.S. troop invasion and losing hundreds of millions of dollars in U.S. military aid. "Let me make this clear," Obama said in a speech at the Woodrow Wilson International Center for Scholars. "There are terrorists holed up in those mountains who murdered 3,000 Americans. They are plotting to strike again. It was a terrible mistake to fail to act when we had a chance to take out an al-Qaida leadership meeting in 2005. If we have actionable intelligence about high-value terrorist targets and President Musharraf won't act, we will." LINK

Washington Post: "Obama Pledges Aggressive War on Islamic Extremists": Democratic presidential candidate Barack Obama today pledged an aggressive war against Islamic extremists, calling for the deployment of at least 7,000 additional troops to Afghanistan to combat the growing Taliban influence and promising to order U.S. forces into Pakistan if necessary to seek out and kill known terrorists. "When I am president, we will wage a war that has to be won," Obama told an audience at the Woodrow Wilson International Center for Scholars in Washington. He added, "I will not hesitate to use military force to take out terrorists who pose a direct threat to the United States." LINK

New York Times: "Obama Warns Pakistan on Terrorism": Senator Barack Obama said today that the United States should shift its focus from the war in Iraq to a fight against terrorism in Afghanistan and Pakistan. He said that if the Pakistani government fails to eradicate terror operations inside its borders, the United States should withhold aid and should strike Al Qaeda targets there itself. "It's time to turn the page on the diplomacy of tough talk and no action," Mr. Obama said. "It's time to turn the page on Washington's conventional wisdom - that agreement must be reached before you meet, that talking to other countries is some kind of reward, and that presidents can only meet with people who will tell them what they want to hear." LINK

Barack continues to offer bold ideas and challenge conventional orthodoxy on issues like education, energy and parental responsibility.

 

Clips summarizing some of these stands can be viewed here:

 

USA Today's DeWayne Wickham: ‘Obama is the Democrats' common sense 'liberal''-"When Barack Obama announced his strategy for combating some of the most intractable problems afflicting urban blacks, he invoked the name of Robert F. Kennedy, the New York senator who was assassinated during his 1968 campaign for the Democratic Party's presidential nomination. Kennedy, he said, looked at the poverty that wracked the Mississippi Delta and asked reporters, "How can a country like this allow it?" But as Obama, the Illinois senator who hopes to become the Democratic Party's standard bearer in the 2008 presidential election, reeled off what he believes needs to be done to better the lives of urban blacks, I thought of another Kennedy [John F. Kennedy]." LINK

 

Huffington Post's Tom Edsall: Barack Obama's August 1 speech outlining an aggressive anti-terrorist policy is part of the Illinois Senator's larger campaign strategy, demonstrating his willingness to break from liberal orthodoxy -- defying teachers' unions, proponents of racially based affirmative action, and Democratic constituencies wary of the use of force. Obama is similarly seeking to establish his political independence from Democratic party interest groups, refuting stereotypes which might encumber his candidacy.Obama has had unprecedented success in the campaign so far. Despite Hillary Clinton's institutional and organizational advantage, Obama has moved from running 20-plus points behind Clinton at the start of the year to a current deficit of only 12 to 13 points, compared to John Edwards' 18 points lag behind Clinton today. If nothing else, Obama's speech Wednesday has shaped the entire Democratic presidential debate for at least one news cycle, prompting every major candidate, and some minor ones, to comment on it. Whether Obama succeeded in changing his polling numbers remains to be seen.

 

Change won't come easily and certainly won't come from those unwilling to challenge conventional wisdom. Barack continues to walk the walk and demonstrate he is resolute about turning the page and bringing about real change.

 

III. Organization

 

We have made heavy investments in our early state organizations, internet program, low dollar fundraising base and a national field operation that will be deployed heavily in February 5 states. Your financial generosity has allowed us to build the best and deepest grassroots organization in history at this stage of a Presidential election, which will have a deep and powerful impact once voting and caucusing commences next January.

 

While this type of organization building is expensive, we are watching how we spend your donations, and are very pleased we have by far the lowest burn rate in the field.

 

‘08 Candidates/Burn Rates: Atlantic (Marc Ambinder's Blog) "Obama's Cool Burn Rate": The most interesting figure available to us today, as we pour over the 2nd quarter financial disbursements, is the average burn rate, which is calculated by adding the money spent plus debt, and dividing that by the amount of money raised for the primary elections. In Obama's case, that's $16M spent + 0.92M debt divided by $32M raised -- or 53%. Clinton burned through 73 cents out of every primary dollar she raised. That's a lot, but it's still an impressive figure. John Edwards spent 74 cents out of every dollar raised; Bill Richardson spent about 71 cents for every dollar raised. Joe Biden spent a whopping 104% of his receipts, and Chris Dodd spent nearly 133% of his primary money raised. LINK

 

A few numbers and facts that will illuminate the strides we are making:

 

• We have made hundreds of thousands of personal voter contacts in Iowa and New Hampshire. And people are responding exceedingly well.
• On July 4 in Iowa, the Obama campaign covered 67 parades and community events, signing up supporters and volunteers. In all but a few of these, we were the only campaign represented.
• We are the only campaign with a consistent voter contact program in South Carolina.
• Our volunteer operation in Nevada swamps the rest of the field.
• This past weekend we held a terrific and well attended regional Camp Obama training in southern California, the first of many we will do in non-early states across the country to turn our enthusiasm into organization
• We have held preliminary organizational meetings in NY, NJ, FL, MI OK, MO, MN, CA, AZ, CO and GA.

 

We will continue to grow and build everywhere that matters. Having enthusiasm allows us to do so. The enthusiasm gap remains alive and well in the Democratic contest.

 

We have also received some important endorsements in the last months. Over 400 Hispanic community and political leaders endorsed Barack's candidacy after he appeared at the national la Raza convention. This is in addition to the dozens of local Latino elected officials who endorsed Barack after his appearance at the National Association of Latino Elected Officials. Both of these conferences occurred in Florida.

 

Earlier I mentioned the support we received from the African-American community as a result of Barack's performance at the NAACP conference. The campaign has also received the support of state Urban League leaders from across the country after Barack spoke at the National Urban League conference in St. Louis last week. Our African-American support continues to strengthen and solidify nationally.

 

We also have had an active month, securing the support of key members of Congress as well as local elected leaders in the early states.

 

One particularly significant endorsement comes from Congressman Paul Hodes of New Hampshire. Not only is Congressman Hodes one of only two members of Congress from New Hampshire, giving his support extra weight, but his rationale for endorsing Barack captured why so many people are hopeful, and believe that Barack can lead American in a fundamentally different direction.

 

Concord Monitor ‘Hodes backs Obama in White House bid' -"It was a well-coordinated announcement, with both politicians flying in from Washington, D.C., yesterday morning to greet several hundred supporters jammed into Eagle Square. Hodes told the crowd that Obama was the candidate most able to bring fresh ideas to the White House. "What he's shown is an ability to bring people together around the idea of change and a new direction," Hodes said. The two men described each other as newcomers to Washington - Obama was elected to the Senate in 2004 - and said they shared a commitment to reform. Obama said voters who elected Democrats such as Hodes last year were voicing their frustration with "conventional thinking that stops us from moving forward." LINK]

 

IV. Polling

 

The national press continues to be obsessed about national primary polling, but as we outlined in the last memo, we fundamentally reject the importance of these national primary polls. This is a sequential process that begins in Iowa and carries through the calendar. If national polls were affecting our ability to grow the campaign, perhaps we would pay them some attention. But they have not, so we don't.

 

Even early state polls at this point are poor predictors. So even when there are positive polls for us - like one out late last week that shows us with a slight lead in Iowa, and tied in the New Hampshire primary and another that had us ahead again in the South Carolina primary - we do not get overheated.

 

This race is covered often times as if the election is occurring tomorrow. It is, of course not. In fact we have many months, and this campaign several lifetimes, until voters begin to have their say. We are confident about where we are today; confident in the pacing and progress we are making and confident in our ability to ultimately win the nomination and the general election.

 

One last point on polls. There is beginning to be a clear pattern that in general election horse race tests, Barack, would be the strongest general election candidate against the likely Republican nominees. The Battleground Poll, a bi-partisan polling effort, found the following results last week that underscore Barack's appeal to independents and moderate Republicans.

 

Talking Points Memo: "Poll: Obama Stronger Nominee Than Hillary": The new Battleground poll - a joint project of George Washington University, Democratic polling firm Lake Research, and GOP polling firm the Tarrance Group - would indicate that Barack Obama is a much stronger general election candidate than Hillary Clinton. While a generic Democrat has an 11-point lead over a generic Republican, Hillary loses to Rudy Giuliani and only leads Fred Thompson by two points. Obama, meanwhile, beats Rudy by a nine-point margin, and Fred Thompson by an even wider edge: STORY - POLL DATA

 

Thanks for all you are doing to help elect Barack Obama the next President of the United States. We will continue to share updates with you on where we see the race and look forward to your comments.