Campaigns Raise, Burn More Cash, More Quickly
Rapid Spending Puts Some in Jeopardy Early

By Matthew Mosk and Sarah Cohen
Washington Post Staff Writers and Washington Post Staff Writers
Monday, July 16, 2007

Candidates for the White House are not only raising far more than ever before, many are also spending that money as fast as they get it, leaving some close to being forced from the race almost six months before the first votes are cast.

Campaign finance reports released in recent days show that the spending spree is a reality for both front-runners and long shots. Former Massachusetts governor Mitt Romney (R) burned through more than $20 million in the past three months, 50 percent more than he raised during that span. Sen. John McCain (R-Ariz.) blew through the $11 million he raised during the past quarter and has barely enough money to keep going, even with his dramatically scaled-down operation.

The frenzy of spending has put the squeeze on several candidates in both parties who are struggling to keep pace during the long march to the first primaries in January, even as the gap between the haves and have-nots expands.

Sen. Barack Obama (D-Ill.) raised $32.8 million during the quarter -- the most of any candidate -- and spent about $16 million to finish June with $34.5 million in the bank, plus another $1.7 million that will be available if he becomes the nominee.

Sen. Hillary Rodham Clinton (D-N.Y.) raised more than $28 million and spent $12 million, finishing the quarter with $32.6 million -- plus $12 million she can use if she becomes the nominee, according to her campaign.

Former New York mayor Rudolph W. Giuliani led the Republican field by raising $17.3 million in the period. He spent $11 million, a modest amount when compared with other contenders but high by historical standards. At this point in 2003, the eventual Democratic nominee, Sen. John F. Kerry (Mass.), had raised $13 million but had spent only $4 million. Then-Texas Gov. George W. Bush raised a record $37 million for the second quarter of 1999 and spent only $3.9 million.

Some candidates have already had the excruciating discussion with advisers about whether to hang on and have concluded they could not. Former Virginia governor James S. Gilmore III made that call Saturday. Sen. Evan Bayh (D-Ind.) and former Iowa governor Tom Vilsack (D) reached that conclusion earlier in the year.

"It's tough. Very tough," said Vilsack adviser Gerald Crawford. "He faced the prospect of developing a big debt. He decided to make that move while the debt was still manageable. It's unfortunate in our system that money can drive credible voices out of the race."

Those now struggling include former Wisconsin governor Tommy G. Thompson (R), who, when debt is factored in, is now operating almost $6,000 in the red, and former Arkansas governor Mike Huckabee (R), who has $435,000 left.

"My goal for the second quarter was to have enough cash to get through the Iowa straw poll, which we have," Huckabee said in a statement, referring to a major gathering of Republicans in Ames, Iowa, next month.

Sens. Christopher J. Dodd (Conn.) and Joseph R. Biden Jr. (Del.), both struggling for a chance to break into the top tier of Democratic contenders, also spent more than they brought in last quarter.

McCain ended June with $3.2 million in cash on hand, with $1.9 million available for the primary campaign, but was saddled with $1.8 million in debt. His supporters said he has a strong enough base of support, and is such a well-known figure, that he can proceed with a vigorous if scaled-back effort.

"I think what you'll see is basically the campaign starting over with a great donor list and a great finance committee," said Charlie Black, a longtime McCain fundraiser and adviser. "If we can raise enough money to keep to our scaled-down budget, we'll be fine."

Of the candidates mounting a serious push for the 2008 nomination, records released yesterday show that among Republicans, Thompson, Huckabee and Sen. Sam Brownback (Kan.) all have less than $1 million. Rep. Dennis J. Kucinich (D-Ohio) also has less than $1 million.

None of those candidates has signaled anything but an intent to forge ahead. But Joseph Trippi, who is running the campaign of former senator John Edwards (D-N.C.), recalled the tough calculations he had to make when advising Howard Dean during his 2004 bid.

"You can move a message with very little money," Trippi said. "Where you find trouble is if you hit a stage where you say, 'I'm not even sure if I can manage to run the basics: paying for airfare, bus fare, lodging, keeping the lights on.' "

Many of those who are struggling have depended on money from their home states. Thompson raised 62 percent of his funds from donors in Wisconsin, where he served four terms as governor. Huckabee took half his money from his home state of Arkansas. Democrat Bill Richardson got 37 percent of his $7 million in donations from New Mexico, where he is governor.

Trippi said the challenge for these candidates, in particular, is figuring out whether they can extend their reach beyond states where they have enjoyed political success. "That's a huge step," he said.

Biden has $2.7 million on hand and said he considers his haul "a solid showing," given the size of his home state, Delaware.

One exception among long-shot candidates is Rep. Ron Paul (Tex.), who has parlayed high-profile moments in the Republican debate and a frugal campaign into a balance of $2.4 million.

He is one of the few candidates from either party to raise more in the second three months of the year than in the first.

"Our fundraising speaks to the grass-roots explosion of our campaign," Paul spokesman Jesse Benton told the Associated Press. "It's very potent, very powerful and very exciting."

For some low-profile candidates, prospecting for donors can be particularly costly -- whether it's spending $6,313 to wine and dine supporters at the 21 Club in New York, as Biden did, or $675,195 to send out literature, as Brownback did. That was more than the $539,517 Paul spent on his entire campaign in the past three months.

Keeping pace with well-funded opponents can be a challenge. Giuliani spent $1.4 million between April and June on 28 fundraising consultants and 18 political consultants. Edwards paid $233,000 to his finance chairman, Texas attorney Fred Baron, for frequent flights on his private jet.

Obama registered nearly $2 million in expenses for travel, including more than $700,000 for charter flights. He spent $373,141 for private security guards, including payments made after he was afforded Secret Service protection. He spent more than $500,000 on polling, with payments spread among four polling firms.

Running with a low balance represents a new approach to seeking the White House. At this stage in 2003, most Democratic contenders were socking away funds, operating on about one-third of the money they raised. In 1999, candidates were burning even less of their resources at this stage of the campaign.

One major change to the political landscape is a revamped and more front-loaded campaign calendar. Competitors for their parties' nomination will for the first time spend January waging primary and caucus battles in more than just Iowa, New Hampshire and South Carolina.

Now Nevada and Wyoming are in the mix, Florida looms on Jan. 29, and the ultimate primary event comes on Feb. 5, when more than a dozen states, including California, New York and New Jersey, will hold primaries.

Lesser-known candidates have also had to compete with the likes of Clinton and Giuliani, candidates with near-universal name recognition.

For Romney, at least, the costly effort to get his message out seems to have paid off, said Craig Fuller, an adviser to President George H.W. Bush who is helping Romney raise money. Romney has spent nearly $5 million on television ads at a time when few others are venturing onto the airwaves, and he has risen to the top of many polls in Iowa and News Hampshire.

Romney has the added advantage of being able to dip into his personal fortune -- estimated to be in the hundreds of millions -- to supplement his fundraising, and had lent more than $9 million to his campaign by the end of June.

"The strategy of building his name recognition in the early states through advertising, I think, has paid off for him," Fuller said.

"I think he's established that he's a front-running candidate, and that was a crucial first step for him."

There remains disagreement among candidates as to how much money it will take to make it to the Iowa caucuses.

Edwards, who finished the quarter with $13.3 million in cash, said he is on track to hit his target of raising $40 million by the end of the year.

Aides for Dodd, who has $6.3 million on hand, had a slightly lower projection. "We've said all along that we need $20 million to $25 million to wage a successful campaign, and we are well on track toward meeting that goal," said Colleen Flanagan, a campaign spokesman.

"We're exactly where we need to be -- structurally and financially."

Crawford, the Vilsack adviser who helped the former governor crunch numbers as he struggled to keep pace, has a different take. "I don't see how you can make it to Iowa with less than $30 million," he said. "I think that's a floor, an absolute floor."

Research director Lucy Shackelford and staff researcher Madonna Lebling contributed to this report.

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