Romney battles Obama for cash advantage

2012-08-21 10:00
Republican presidential candidate Mitt Romney. (AP, File)

Republican presidential candidate Mitt Romney. (AP, File)

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Washington - The Republican Party and presidential candidate Mitt Romney have almost $60m more in the bank than President Barack Obama and his Democratic Party but campaign finance experts say it is too soon to assume that means a political advantage in November.

The Obama and Romney campaigns are vying to become the most successful fundraising operations in US history, with help from their national parties.

In July, Romney raised $101m for his campaign and the party, outpacing Obama for the third month in a row. Obama and the Democrats hauled in $75m.

Romney, the Republican National Committee and the Victory Fund they use jointly said they had $186m left in cash on hand at the end of July.

Disclosures filed on Monday showed Obama, the Democratic National Committee and their own joint funds having a total of $127m left in cash on hand.

That money is an important gauge of firepower saved up for future advertising or investments in hiring, offices and events.

Flexible cash

It has prompted a flurry of fundraising e-mails from Obama - whose campaign spends at a faster clip than Romney to maintain its vast network of staff and field offices - urging donors to give because they expect Romney to far outraise the president.

But those grand totals may be too broad of a measure to foretell a candidate's future financial advantage, experts say.

"Romney is ahead when you combine it all together but some of his money is going to be less efficient," said Michael Malbin, who runs the non-partisan Campaign Finance Institute. "Obama is way ahead in the most flexible pile."

The most flexible cash belongs to campaigns, analysts said, because it allows for spur-of-the-moment investments, for example to instantly rebut the opponent's latest attack.

Parties, while vowing to spend every dime on their presidential candidate, do provide key support when it comes to mobilising voters and grassroots outreach but this year they have a $21.7m cap on how much they can co-ordinate with campaigns.

That limits, most importantly, their capacity for advertising, Malbin said, a crucial way to reach voters.

Tipping scales

The RNC has been outraising the DNC. It said it brought in $37.7m in July, compared to DNC's reported $5.8m. At the end of the month, the RNC said it had $88.7m left in cash on hand and the DNC had $15.4m, according to its Monday's filing with the Federal Election Commission.

But the scale tips when comparing campaigns head-to-head.

Romney emerged at the end of July with $30.2m in cash on hand, while Obama had $87.7m - nearly triple Romney's amount - in the bank, FEC filings showed on Monday.

In fact, Obama at the end of last month had more than the cash on hand he enjoyed at the end of July in 2008, the year of his historically successful election bid. He had $66.4m.

"The broad picture, the step back is that the Obama campaign has a stronger financial position than the Romney campaign," Malbin said.

Obama, who raised a record $750m for the 2008 campaign that put him in the White House, had a cushy advantage over Romney early in the 2012 campaign season because he had no challenger from his party, while the Republican until May battled several opponents in a bitter primary competition.

Spending more than money raised

"The way to think of it is Obama started running a marathon in April 2011, while Romney was in the hurdle race to run through a primary and now he's running a sprint, he has to raise much more money," said Bill Allison of the nonpartisan Sunlight Foundation, which tracks campaign spending and fundraising as part of its effort to increase government transparency.

Where Obama got left behind in the money game is when he started spending more than he raised.

In July, continuing several months of the trend, Obama's campaign spent $58.5m, roughly two-thirds of it on advertising. Romney's campaign last month spent a total of $32.3m, with half going toward ad production and placement.

"It's not as if that money is wasted," Allison said of Obama's high burn rate in run-up to the 6 November election. "The only thing that matters [this close to the election] is spending it all. ... Candidates don't want to leave anything on the table."

When Democratic presidential candidate John Kerry lost a close race to George W Bush in 2004, he was criticised for having $16.8m left over in campaign coffers after outraising the Republican throughout the campaign.

That year, Kerry was also heavily aided by liberal outside spending groups, predominantly non-profit advocacy organisations that poured in $121.3m, according to the Centre for Responsive Politics. Conservative outside groups spent $68.4m on the 2004 election, according to CRP.

$2m from single donor

But, legally prohibited from co-ordinating with campaigns, outside groups have trouble rebutting personal attacks against their candidate.

That year, liberal groups failed to effectively respond to allegations against Kerry, including an attack on his Vietnam War record by group Swift Boat Veterans for Truth.

Similarly, this year Romney is receiving help from conservative non-profits and "super" political action committees, which can raise and spend unlimited funds and have been outdoing their Democratic rivals.

The Super PAC devoted to Romney's election, Restore Our Future, in July raised $7.5m, Monday's filing showed. Of that, $2m came from Bob Perry, a Houston homebuilder who was a major donor behind Swift Boat.

The pro-Obama Super PAC, Priorities USA Action, on Monday reported raising $4.8m in July. The group has been under fire recently for its latest ad that links Romney to the death of a woman whose steelworker husband lost his job after Romney's company, Bain Capital, closed the plant where he worked.

Read more on:    barack obama  |  mitt romney  |  us  |  us elections 2012
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