Dems, GOP both have campaign cash concerns

May 21, 2008 5:49:36 PM PDT
As they steer toward November's presidential election, Democrats and Republicans are assessing the financial challenges ahead. The Republican problem: Even while losing primaries and fending off bad press over his former pastor, Democrat Barack Obama was able to raise $1 million a day last month. John McCain, unrivaled and secure in his eventual nomination, had his best fundraising month and raised only $18 million.

The Democratic problem: The Republican National Committee, with McCain operatives in place, raised nearly $16 million and had more than $40 million in the bank at the start of May. The Democratic National Committee had $4.4 million.

"This gap is going to be one of the immediate challenges that the Obama campaign has to deal with during the summer," said Bill Carrick, a California-based Democratic consultant who has worked on various presidential campaigns.

Obama entered May sitting comfortably atop more than $37. McCain had nearly $22 million in hand. Hillary Rodham Clinton, once the Democrats' presidential front-runner, was in the red.

Obama, moving closer to his party's nomination, let his fundraising slow only slightly last month and collected $31 million. Clinton raised more than $21 million, but was saddled with debt. And McCain, in his best monthly performance yet, hauled in $18 million.

All three candidates filed their April fundraising reports Tuesday with the Federal Election Commission.

Together, the reports reinforce what is increasingly evident: Obama and McCain are equipping themselves to confront each other, while Clinton risks a personal financial hit by quixotically hanging on to the end.

In a continued expansion of Obama's fundraising network, his campaign reported nearly 1.5 million donors since he started raising money for the presidential race. With such extraordinary numbers behind him, Obama appears to have access to a continuing flow of money, though his April total was his smallest this year.

Overall, he has raised close to $265 million for his White House bid.

Where Obama has built a decided advantage is with small donors.

An analysis Wednesday by the nonpartisan Campaign Finance Institute showed that 65 percent of Obama's money in April came in contributions of $200 or less. The maximum individual donation to a campaign is $2,300.

Clinton hasn't done badly with small donors, either. Nearly 60 percent of the nearly $22 million she raised came from contributions under $200.

"Obama's ability to go after small donors for additional donations is a very important advantage that he has," said Kevin Madden, a Republican communications strategist who worked on Mitt Romney's presidential campaign.

For McCain, however, less than a quarter of his money comes from small donors. That means that much of his money comes from contributors who have already given the maximum $2,300 allowed by law. To get more money, McCain must find new donors.

As a result, his only advantage right now is through the Republican National Committee.

"McCain is never going to outraise Obama," said Scott Reed, a Republican consultant who managed Robert Dole's presidential campaign in 1996. "But McCain will have enough money with the RNC to have a very competitive campaign in the fall."

McCain's finances are an important marker as he moves into direct competition with Obama, who has shown himself to be a fundraiser without equal. McCain has been taking advantage of his status as the all-but-nominated Republican candidate, embracing the big donors from his former GOP rivals and putting allies in charge of raising money at the RNC.

The Democratic National Committee, for now, is waiting for the party to unite behind a nominee, most likely Obama.

And while few doubt that Obama would be able to quickly improve the DNC's financial status, he also will be working to raise his own money for the general election. McCain, on the other hand, will likely avoid that task by choosing to accept $85 million in public financing.

"That's a good chunk of dollars to have for that post-convention phase, that should be enough," Madden said.

Meanwhile, Clinton faces other challenges.

She reported only about $8 million cash on hand for the primaries at the end of April. (She has $22 million set aside for the general election that she cannot use.) She also reported $19.5 million in debt, including $10 million in personal funds she has lent the campaign. Even without the loan, Clinton was in a negative cash position. The loan amount also did not include an extra $1.4 million she put into the campaign this month.

Clinton did not add to her debt to vendors, including such campaign consultants as Mark Penn and Mandy Grunwald. But she had to ramp up her spending, with most of it devoted to traveling and getting her message to voters. She spent more than $9 million on ads alone.

Still, that paled in comparison to Obama. He spent more than $20 million on ads, including nearly $2 million to advertise on the Internet.

Clinton campaign chairman Terry McAuliffe said donors continued to contribute though the Internet and that she planned fundraisers this week.