McCain in Trouble

From the Evans-Novak Political Report:

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GOP Field: While Sen. John McCain claims that everything is "fine" in his bid for the Republican presidential nomination, events strongly suggest otherwise. The former frontrunner is now in deep trouble. With respect to the positive signs a presidential campaign can point to at this early stage -- fundraising, national polls, state polls, endorsements -- McCain finds himself almost empty-handed.

For this and other reasons, the nascent campaign of former Tennessee Sen. Fred Thompson poses a challenge for McCain in particular. Thompson has reportedly raised millions in just days after filing an exploratory committee, and a new national Bloomberg poll puts him at 21 percent, in a strong second place against former New York City Mayor Rudy Giuliani. McCain has plunged to 12 percent, just ahead of former Massachusetts Gov. Mitt Romney, but at least Romney has some bright points in his favor: his lead in fundraising and his lead in Iowa and New Hampshire polls.

McCain has no such good news. If Thompson is the charging bear, McCain is the slowest of the three campers fleeing him -- the most likely to be devoured.

First, McCain has fallen out of favor in the important state polls. Romney, who has saturated the Iowa and New Hampshire airwaves with campaign advertisements in recent weeks, has leap-frogged over both McCain and Rudy Giuliani to lead in both states. Romney leads McCain only narrowly in Iowa but has pushed his lead in New Hampshire to 8 percent. In South Carolina, Giuliani and McCain trade a narrow lead. In Florida, Giuliani dominates.

McCain's recent withdrawal from the August straw poll in Ames, Iowa, seemed to come with a sigh of relief. With Giuliani exiting the straw poll first, McCain had an excellent excuse to drop out of an expensive and early symbolic contest that he probably can't win against the moneyed Romney. Especially troubling for McCain in Iowa are his past stances on ethanol, immigration and guns, to say nothing of his campaign finance reform bill.

With respect to fundraising, McCain had a dismal first quarter at $12.5 million, widely considered a disappointment. Now his campaign is setting extremely low expectations by saying simply that he will raise more than that amount in the current quarter (results will be available in mid-July). Such a take would be woefully insufficient for him to continue in earnest, perhaps leaving him with one fourth (or less) of the cash on hand of his top competitors. His campaign is still recovering from its earlier spendthrift ways, even though his staff has now been pared down by more than one third.

More striking are the stories of many high-profile Bush supporters -- so-called Rangers and Pioneers -- from previous campaigns. They are currently keeping their powder dry in spite of McCain's aggressive courtship. The uncommitted heavy-hitters see Thompson looming in the background, prompting many to hold off in consideration of backing the newcomer. McCain is also soliciting help from unusual quarters, giving rise to stories that hardly inspire confidence in his operation.

Third is the recently reported defection of McCain staff and a high-profile supporter, which is more symptomatic than causal of McCain's problems. Fourth is the national poll mentioned above. With non-candidate Thompson 10 points ahead of McCain nationwide, the "electability" rationale for backing McCain begins to fade for many Republicans.

More significant are the negative motivations for supporting the top three candidates, and McCain in particular. As we have argued previously, much Republican support for the top three stands on three pillars, or the Three D's: disagreement with Giuliani, distrust of Romney and dislike for McCain. For example, a conservative Republican who feels overwhelmed by antipathy toward Romney and Giuliani will reluctantly back McCain on these or similar grounds: "McCain may be too liberal on taxes and guns, but at least he is very conservative on earmarks and spending, he's tough on terrorism, and he has a pro-life voting record on abortion." The same sort of thinking applies, in varying degree, to all three candidates.

But with the entry of Thompson into the race, many conservatives will feel -- rightly or wrongly -- that they may have a conservative alternative and need not settle for someone they merely distrust or dislike less than the others. This is the key to Thompson's effortless success so far, his climb from nowhere to 21 percent nationally. (It is also a reason Thompson could suddenly implode once he is defined.)

With Thompson's candidacy all but declared, the outlook becomes even more bleak for McCain. The big money that McCain has been courting could instead flow to the newcomer. Romney, who will never be without money, is sprinting ahead in the early states. Giuliani remains the overall frontrunner. Thompson is luring McCain supporters into his camp.

McCain may be able to overcome any one of these setbacks, but can he survive them all simultaneously? The futures markets are already counting him out, putting his contract at $12 to the $29 price on Thompson.