By Emily Cadei, CQ Staff

When Democratic presidential nominee Barack Obama opted to reject public funds for the general election in favor of his own private fundraising operation, it was unclear how much of an edge it would give him. As it turns out, the decision has proved to be history-making.

Thanks to a massive outpouring of funds from supporters, the Illinois senator raised more than $150 million last month alone — the most by any candidate in history — and outspent his Republican rival, John McCain , by more than two to one. His decision to forego public funding — and it’s accompanying spending restrictions — is now likely to go down as one of the key strategic moves in the 2008 campaign.

The practical meaning of $150 million in one month can be found in how Obama is putting his money to work. He spent $96.9 million last month blanketing the airwaves — and the sidewalks with volunteers — of an expanding roster of battleground states in an unprecedented advertising and grass-roots effort aimed at connecting with as many undecided voters as possible. After all that, he still ended the month with $133.6 million in the bank.

McCain, meanwhile, is trying to fight back with what amounts to one arm tied behind his back. Like every other presidential candidate since 1976, the Arizona senator opted to participate in the public funding process, which limits candidates to $84.1 million in spending between their official nomination at the conventions and election day. By accepting the limitation, McCain is prevented from raising or spending any private funds on his own.

As a result, McCain is trying to make his $84.1 million stretch through the Nov. 4 election, while Obama continues to have millions more to play with. More than half of McCain’s public financing — nearly $45 million — was gone by the end of September. McCain spent more than that back in August when he paid out nearly $48 million for advertising and other efforts leading up to the Republican National Convention.

But McCain is getting lots of help from the party. The Republican National Committee is the one bright spot in an otherwise dismal GOP fundraising effort election cycle, and is doing its best to keep with Obama’s fundraising. The committee raised $67.2 million in September and spent $66.1 million on its presidential election efforts, including $5 million on ads attacking Obama.

The Democratic National Committee also is pitching in for Obama, though it trails the RNC in funding. The DNC raised $42.3 million in September and spent $37.2 million.

So when the party money and the campaign spending are combined, the difference between Obama and McCain becomes less dramatic: the combined Democratic presidential campaign efforts outstripped the Republican’s $134.1 million to $110.7.

The way the two party committees spent their money in September illustrates a stark difference in strategy. The RNC efforts are directed mainly out of the national office, with a focus on independent and coordinated spending to run ads in behalf of the McCain campaign. About half of the DNC spending, meanwhile, went to state party committees in battleground states identified by the Obama campaign as party of their effort to expand the electoral playing field. The top DNC transfer destinations included North Carolina ($1.1 million) and Virginia ($1.5 million), neither of which has gone for a Democratic nominee since 1964. In contrast, the Republicans directed only $20,000 to their Virginia state party and $307,000 to North Carolina.

Both parties are still devoting substantial resources to state parties in Florida, Pennsylvania and Ohio, battlegrounds that decided the 2000 and 2004 elections and could do so again. The DNC shifted $2.7 million to Ohio, $1.9 million to Florida and $1.5 million to Pennsylvania. The RNC has transferred $1.9 million to Florida, $1.2 million to Pennsylvania and $800,000 to Ohio.