Money Matters

As all the presidential candidates proved this week, money matters. Even better than polls –which provoke endless arguments about methodology and bias — campaign fundraising totals and debt, number of donors and spending figures can be objectively tallied. Cold hard cash provides a story line in an endless campaign and confirmation of pundits’ subjective hunches about how candidates are faring and where the race is headed.

For Obama the sheer size of the haul and the number of donors is staggering. 258,000 donors for Obama confirm that the Democrats have an interesting dilemma. One candidate “wins” debates, leads polls, commands an impressive campaign machine but another has captured the excitement and hearts of the base (and perhaps expanded the base) and has not yet turned off half the voters. Just when pundits were ready to pronounce Hillary Clinton unbeatable, Obama and his legions of supporters beg to differ. Perhaps the accountants found something the pundits didn’t: proof that the Democratic Party is not ready for a coronation just yet and the “change the page” message of Obama is penetrating. If he uses his millions wisely, defines himself and develops credibly policy prescriptions the pundits will need a new storyline.

It also should serve as a warning sign to the GOP as a whole. No candidate on the Republican side approaches either Obama or Clinton’s money total or remotely approaches the number of Obama donors. The Democrats are well funded, enthusiastic and internet savvy. Republicans should be concerned and focus relentless on the issues like the economy, immigration and national security which offer the opportunity to unify and expand their base of support.

On the GOP side, the totals for Rudy Giuliani seem to remove any doubt that he is the front runner. Clearly he has gotten his organizational campaign act together. He outraised all other opponents by taking in over $17M, $15M of which is for the primary. With $18M still in the till (for primary and general races) and no debt he maintained his frugal image. According to his press release, he doubled the number of individual donors from the First Quarter.

At the other end of the spectrum is Senator John McCain. For his campaign, reality has sunk in. In grim but determined tones his campaign aides announced the results and confessed they would not match their weak First Quarter results or reach their yearly goal of $100M. Even more startling than the $11.2M figure for Second Quarter, which passes the “at least not embarrassing” test, is the paltry $2M left in the campaign kitty. Where did the money go for a candidate not yet blanketing the airwaves with paid ads like his opponent Mitt Romney? Aside from this mystery, the spending spree raises the nagging question of how a candidate who prides himself on spending restraint as a policy matter can squander his own funds so readily.

Mitt Romney perhaps suffers from an expectations game. After raising over $20M in a huge First Quarter he raised $14M in the Second, only $3M more than McCain but good enough for second place to Giuliani. This is perhaps a sign that his amazing money making machine has limits and faces new competition from Giuliani and also the newest conservative almost in the race, Fred Thompson. Moreover, his campaign revealed a personal loan of $6.5 million to boost his total over $20M. With this personal infusion he was able to show $12M cash on hand, again second to Giuliani. (His campaign did not report an exact figure for debt but sources indicate it is minimal.) Nevertheless, his campaign clearly has adequate resources to compete and, as his campaign emphasized, has added 50,000 new donors for a total of 80,000 for the year (tops among the GOP field).

But if money matters it is only the beginning not the end of the story. For Obama, he still must unseat Clinton, who is running a polished and coolheaded campaign, methodically working her way to capture the Left which dominates her party’s base. At some point she will ask her version of “where’s the beef?” and he must have a credible answer.

For Giuliani he will almost certainly face a new challenger in Fred Thompson (who is not legally obligated to release fundraising figures and has yet to confirm rumors of huge online contributions) and a well funded opponent in Romney whose money and organization, especially in the early states, will keep him in the thick of the race.

For McCain, those betting he will “quit” perhaps underestimate the quality which has given his campaign political fits – his steely, if not irrational, determination. If he did not abandon fidelity to McCain-Feingold, the “Surge” or immigration reform he certainly will not abandon his own campaign without a vote being cast. Nevertheless as the possibility of victory slips from view the question as to where his supporters “go” remains an interesting parlor game and will likely be analyzed in a new spate of “without McCain in the race” internal and public polling.

So after the money is counted there are still two fiercely contested races to be run. In the end, the voters, not the accountants, will still decide who wins and loses.