ELECTIONATE OCTOBER 8, 2012
With Obama holding a narrow lead over the summer, one of the more potent arguments for a Romney comeback was the fundraising prowess of his campaign and their PAC allies. Romney outraised Obama for four consecutive months after he secured the Republican nomination and GOP-aligned Super PACs outraised their Democratic counterparts by even larger margins. By late July, Team Romney was outspending Obama on television advertisements by a 2-to-1 margin after a profligate Obama campaign embarked on a supposedly reckless early summer effort to define Romney while burning millions on a costly ground operation. But two months later, the conventional wisdom about Team Romney’s financial advantage has been turned on its head. In August and September, the Obama campaign and the DNC combined to raise nearly $300 million, resulting in a growing spending disparity on the ground and in the air. What happened?
Romney's fundraising strategy relied heavily on big donors. After securing the Republican nomination, Romney crisscrossed the country attending large fundraisers with wealthy donors eager to contribute to a former private equity CEO combating a president often perceived as hostile to the interests of business. Romney collected huge sums from these big donors and outpaced the president for four straight months, raising Democratic fears that Obama might be swamped by a well-funded Romney campaign and their Super PAC allies. But while Citizens United permits unlimited contributions to Super PACs, campaign finance laws restrict contributions to the candidates and parties, and Romney’s big donors often maxed out with their first big donation. With relatively few small donors and plenty of maxed-out wealthy contributors, the Romney campaign couldn't simply go back to old donors and ask for more.
Ultimately, Obama’s small-donor base outlasted Romney. While 51 percent of the Romney campaign’s donor base maxed out, just 16 percent of Obama donors reached their contribution limits, allowing the Obama campaign to ask for more money from proven contributors. In August and September, millions of Obama supporters contributed again, allowing the Obama camp to raise nearly $300 million over two months. Perhaps most strikingly, Obama’s recent fundraising explosion paralleled 2008, when Obama’s fundraising rose by similar margins in August and September, belying the expectation of diminished enthusiasm for the president. If many marginal supporters are disappointed with Obama's performance, then most of Obama's '08 donors must have been true believers just as willing to dish out donations as they were four years ago.
What about the well-funded GOP-aligned Super PACs enabled by Citizens United? Although liberal fears of unlimited contributions came true, with Sheldon Adelson donating nearly $40 million over the season, the GOP-aligned Super PACs did not raise enough money to give Romney a clear financial advantage. According to the Washington Post, GOP Super PACs raised $145 million through August, allowing Team Romney to barely outraise Team Obama by just $5 million, $784 million to $779 million (these tallies preceded Obama's $181 million September). But the seemingly close top-line totals for Team Obama and Team Romney don't tell the whole story, as the GOP Super PACs have not proven to be an efficient or effective vehicle for advancing the Republican nominee. Super PACs are charged higher advertising rates than federal candidates, and many of the pro-Romney Super PACs, like Karl Rove’s well-funded Crossroads, also support Republicans down the ballot. And as TNR’s Alec MacGillis pointed out, the GOP Super PACs may be prioritizing the fight for control of the Senate, and the advertising numbers bare that out; Crossroads and other GOP Super PACs are spending less on the presidential race than they were last month. Similarly, much of Romney’s big donor fundraising was split between the Romney campaign and the RNC, which can use the money for down-ballot races, as well. Only the Romney campaign's coffers are assured of being spent on their behalf, but the Obama campaign has out-raised the Romney campaign by a $441 million to $284 million margin, again before Obama's $181 million dollar September (although some of the $181 million went to the DNC).
There was never any assurance that a large spending advantage would prove decisive in a race involving a well-known incumbent president, but the ability to outspend Obama during the final stretch of the race was central to the Romney campaign’s vision of the race. Undecided voters disappointed with the president’s performance would stampede to Romney’s corner, just as they did in 1980 and a deluge of Romney spending from push them in that direction. Instead, the Romney campaign trails Obama in crucial markets markets, even while making larger sacrifices in the less efficient markets of Iowa and New Hampshire. Over the last few weeks, the Obama campaign has escalated its efforts in Florida, the most expensive battleground state, and the Romney campaign has not matched Romney’s efforts. In the pivotal Orlando media market, Team Obama is outspending Romney and his allies by 66 percent. Obama is also outspending Romney on the ground. Throughout the summer, the Obama campaign was critizied for its “high burn rate” resulting from costly efforts to build and maintain dozens of field offices in crucial battleground states. Whether those efforts pay off is harder to say, but Obama’s high burn rate suggests that Chicago anticipated strong fundraising performances in August and September. And in an election with few undecided voters, it’s not hard to imagine how an expensive ground operation could prove decisive in a close race.
In a future presidential election involving a candidate without a large and passionate base of small donors, the unlimited donations enabled by Citizens United could give the candidate with the backing of large donors a real advantage. But in this election, Obama enthusiastic small donor base and the inefficient allocation of resources on the GOP-side appears to have neutralized if not reversed Romney's expected financial advantage. If Obama loses reelection, the money race won't be to blame.