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Not the worst case scenario, but not good.

Campaign Manager Terry Nelson said the campaign is now considering accepting federal matching funds.

Cites a "difficult fundraising environment" for Republicans as well as McCain taking "principled stands" on such issues as immigration and campaign finance reform.

UPDATE: The conference call that just concluded represented a campaign coming to terms with the dire position they find themselves in. It is quite a turn of events. Held up for years by the media as the inevitable nominee (something that was always bogus), McCain is now forced to run like the insurgent candidate he was in 2000.

Nelson said that they originally projected they'd raise more than $100 million during this calendar year, and "constructed a campaign based on that assumption." Now, they're scaling back their operation, shedding staff, reducing payroll, and even Nelson is working for free for the next few months. It's very hard to start a campaign as the "frontrunner," scale back so drastically, and expect to win the nomination. As Dave Weigel points out, just about a month ago, Nelson was predicting McCain would raise over $12.5 million.

McCain's new strategy will focus on the early primary states of Iowa, New Hampshire, and South Carolina. There are several problems with this strategy. With many big states moving up their primaries, the early states may not have the influence they once did. Even if you were to argue that the early states will still prove crucial, McCain's strategy still faces a huge obstacle. Mitt Romney has been pouring money into those states for months, and his early organizing in Iowa has already forced McCain out of Ames Straw Poll. True, Giuliani was forced out too, but the Giuliani campaign has not made winning in Iowa central to its strategy of winning the nomination.

topics:
Environment, Immigration