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John McCain's Budget Cuts: Not What He Had In Mind

Curbing spending has become the new centerpiece of John McCain's 2008 presidential campaign--but not in the way the Arizona senator had hoped. Faced with lagging donations and down to just $2-million in cash, the one-time front-runner has laid off one third of his staff.

That includes his top economics adviser, Douglas Holtz-Eakin. As former head of the Congressional Budget Office, Holtz-Eakin has underscored McCain's political appeal to economic conservatives; that he has the record and commitment to curb runaway federal spending. But campaigns in trouble have higher priorities than the salaries of policy gurus. A McCain spokesman says Holtz-Eakin will continue to advise the candidate, but without pay.

Perhaps more problematic is the departure of McCain's well-regarded e-campaign director, Christian Ferry. The Internet has become increasingly important as a campaign communications tool. McCain's $3-million in online donations so far represent a respectable total--more than double the e-donations collected by Rudy Giuliani, though less than Mitt Romney's $5 million haul. But the McCain high command decided they couldn't afford Ferry's salary either as they dramatically scale back their campaign budget.

Once that budget was built on expectations of $100-million in 2007 donations. McCain's currently on track to bring in less than half that amount.

Questions? Comments? Write to politicalcapital@cnbc.com.