Rather than issue a plain-vanilla bond with a fixed interest rate, Denver followed its bankers’ suggestions and issued so-called pension certificates with a derivative attached; the debt carried a lower rate but it could also fluctuate if economic conditions changed.

The Denver schools essentially made the same choice some homeowners make: opting for a variable-rate mortgage that offered lower monthly payments, with the risk that they could rise, instead of a conventional, fixed-rate mortgage that offered larger, but unchanging, monthly payments.

Since it struck the deal, the school system has paid $115 million in interest and other fees, at least $25 million more than it originally anticipated.

To avoid mounting expenses, the Denver schools are looking to renegotiate the deal. But to unwind it all, the schools would have to pay the banks $81 million in termination fees, or about 19 percent of its $420 million payroll.

Bennet, along with Thomas Boasberg, then the school system’s chief operating officer, stand by the deal, saying it saved the district $20 million in cuts that would have gone to cover the pension shortfall. As for the credit crunch that elevated the deal’s projected long term costs, no one could have predicted that, they claim.

Because the deal was structured over a period of thirty years, the jury is still out on whether it will ultimately benefit the school system or not. Termination fees associated with refinancing the debt could end up swallowing greater and greater sums of money, or interest rates could fall and annual costs associated with the deal could go down.

What’s clear is that with less than four days until the August 10 primary, the Times’s piece will act as fodder for Romanoff’s harsh, and sometimes misleading, attack ads against Bennet that accuse him of “Wall Street greed.” In the country’s current economic climate, it’s a line of attack that’s gained Romanoff traction among many liberals and party Democrats and allowed him to catch up in the polls. Whether today’s story will push him past the post on Tuesday remains to be seen.

The ad, which is airing today before President Obama returns home to Chicago and does some serious fundraising for Giannoulias tomorrow, attempts to link the Democrat to the state’s 10.5 percent unemployment and asks, “Does anyone think that Alexi Giannoulias can create jobs?”

The Chamber is likely targeting Giannoulias not just because of Obama’s support, but also because of the upswing he’s been experiencing at the polls following revelations that his Republican opponent Mark Kirk was embellishing numerous aspects of his military and his teaching record. Giannoulias’ favorable poll numbers, combined with new positive polling for Democrats in a few other Senate races, has prompted Democratic Senatorial Campaign Committee Executive Director J.B. Poersch to boast that the Democrats’ hold on the Senate is looking increasingly secure:

In Nevada, Kentucky, Louisiana, and Illinois, Democratic prospects have improved over the last five weeks as Republican candidates have been exposed for their extremism, evasiveness and exaggerations. Despite the headwinds of history, Democratic Senate candidates in these states – two of which would be pick-up opportunities – are becoming increasingly competitive.

It was at a town-hall meeting Friday. A McCain supporter rose and declared that he was frightened by the prospect of waking up to an America led by Sen. Barack Obama. Another woman said of Obama, “He’s an Arab.”

“No, Ma’am,” McCain said as he quickly grabbed the microphone from her. “He’s a decent family man, citizen, who I just happen to have disagreements with on fundamental issues. And that’s what this campaign is all about.”

Put aside the fact that plenty of Arab men are decent family men. What was revealing here was what one saw in McCain’s face — exasperation and perhaps a realization of what precisely his campaign had unleashed.

It’s no secret that this is not the campaign McCain wanted to run. He wanted Sen. Joe Lieberman as his running mate, not Alaska Gov. Sarah Palin. He wanted to focus on the war on terror and national defense, not economic bailouts.

And one can only imagine how much he’s cringed at his own campaign’s attack ads, which have been alternately tacky and blatantly false, and at his running mate whose attacks have prompted some audience members to yell “terrorist” to “kill him” at the mere mention of Obama’s name.

So Friday, when McCain was put in the awkward position of defending Obama’s honor, it was apparent that he had come to grips with what his campaign had wrought. For a man who considers ideas like honor and respect, civility and decency paramount, you could see McCain physically recoil at the sentiments being expressed by some of his supporters.

While McCain denounced the great civil rights avatar, Georgia Rep. John Lewis, for comparing his tactics to those of segregationist George Wallace in 1968, the truth is that McCain and Palin have brought this ugliness on themselves.

Unlike at Obama rallies, where one feels the buoyancy of the crowd, what one increasingly senses at Republican events is anger, some of it extreme.

Whether or not McCain can pull this election out remains unclear, because anyone who says he knows what’s going to happen Nov. 4 is simply kidding himself.

What is certain, though, is that McCain’s image — his standing — has been tarnished by what’s happened since the nominating conventions.

McCain is a man who has served this country well, who through the years has symbolized what is possible when ideological differences are put aside.

But now, in contesting for this nation’s highest office, he has effectively wiped that record clean. He simply will be viewed differently from now on.

One’s remaining years in public life should be spent trying to leave the office you have held in better shape than when you found it.

Instead, McCain will spend that time trying to repair the damage of what he has wrought.

Did Barack Obama really call Sarah Palin a pig, as a John McCain ad leads people to believe?

‘‘No,’’ McCain said Monday.

The Republican presidential nominee defended the ad anyway, saying Obama ‘‘chooses his words very carefully.’’

The implication: Obama was slyly up to something when he said McCain’s call for change in Washington is ‘‘lipstick on a pig,’’ days after Palin made a lipstick joke at the Republican convention.

‘‘He’s very eloquent,’’ McCain told The Associated Press and Florida newspapers in an interview, and ‘‘it was the wrong thing to say.’’

If Obama did not call Palin a pig, why would the McCain campaign embark on such a cynical effort to convince voters that he did?

McCain said of Obama’s comment: ‘‘I didn’t like it. So we respond. I think the American people will judge as to whether he and others have treated Governor Palin fairly or not.’’ But he said he won’t let attacks go unanswered.

So that’s how McCain rolls: say something he doesn’t like and find yourself the target of vicious, lying attack ads that feign political correctness and completely distort your comments — and he’ll deny they’re lies until even Karl Rove has to call out of bounds. That’s an interesting definition of honorable you’ve got there, senator.

Also in the interview, McCain deflects a question on whether Palin requested $200 million in earmarks this year and cuts off one about the “Bridge to Nowhere.” Who wants to start placing bets on when McCain stops giving any interviews at all?

Mr. Rove, the architect of President Bush’s election victories, has been telling Republican benefactors across the country that giving to official Republican Party fund-raising committees will not be enough this year, according to people familiar with his pitch over the past few months.

“They said Mr. Rove has regularly expressed concern that Democrat-leaning organizations such as MoveOn.org and labor unions could swamp the Republican Party’s money machine and overwhelm the presidential campaign of Sen. John McCain, Arizona Republican.

“To counter that wave, Mr. Rove has been asking elite Republican fund-raisers to pour their millions of dollars into non-party groups like Freedom’s Watch, which is gearing up to spend tens of millions of dollars to help elect conservatives — primarily Republicans — to Congress and the White House.

GOP contributors don’t seem to need much convincing. Donations to federally focused conservative “527” organizations — tax-exempt groups not permitted to advocate for individual candidates but allowed to attack their positions on specific issues — totaled more than $43 million through June, according the Center for Responsive Politics, a non-profit campaign-finance watchdog. That’s up from roughly $21 million by the same point in 2004.

The question remains: can one of these groups locate an issue — Swift-Boat-style — with the power to sway elections?