February 11, 2009 5:07 PM
- Text
A Perfect Storm For Fundraising
(CBS)
By CBSNews.com's David Miller.
In the early days of the 1996 presidential campaign, Republican Sen. Phil Gramm of Texas won attention for building a massive campaign war chest during the first quarter of 1995. How large were Gramm's cash reserves? A little over $8.4 million, putting him at the front of the pack in the race to challenge President Clinton. The man who eventually won the Republican nomination, Sen. Bob Dole of Kansas, had less than $2.5 million on hand at the end of March 1995.
Fast-forward to today, the eve of the fundraising deadline for the first quarter of 2007. Democrat Hillary Clinton raises $2.6 million in one night. Republican Mitt Romney did even better, taking in $6 million in one day.
Republican John McCain says he might not meet his fundraising goal, yet analysts still believe he'll pull in at least $20 million, which would easily eclipse the $15.6 million Gramm, who ended up dropping out before the New Hampshire primary, raised through all of 1995.
The rise in campaign fundraising numbers is shocking not only in size but also in speed — raising the bar of expectations to $30 million has been anything but gradual. At the end of the first quarter of 2003, the five Democrats then considered serious contenders for their party's nomination averaged just over $5 million in contributions. That amount was actually lower than the average posted by the top four Republicans running in the spring of '95.
So why, and how, have fundraising numbers gone up by so much and so quickly?
The answers lie in many places: the laws regulating campaign contributions, changes in how candidates are raising money and the unique political environment surrounding the next election.
• Higher Limits = Higher Totals: Until the 2004 campaign cycle, individuals could donate only $1,000 per election to a presidential candidate — once for the primaries, and once for the general election. The campaign finance overhaul law known as McCain-Feingold changed that, immediately boosting the limit to $2,000 and indexing it to inflation. The cap now stands at $2,300 per election, or a total of $4,600 per person for the entire cycle.
The new rules had just gone into effect in early 2003 and hadn't quite sunk in yet, said Evan Tracey, CEO of the Campaign Media Analysis Group. "You have a new set of books. This is the first full general election where all the strategists could focus on it for four years," he said. "By and large, the first-tier candidates have been at this a while."
• Doing the Double-Dip: The top-tier candidates have also taken the (until now) unprecedented step of raising money for both the primaries and the general election at the same time. This represents a dramatic departure from 2004, when even President Bush, with his massive fundraising network, didn't raise money for the general election in favor of accepting public financing.
Some of the candidates are doing this with caveats — Democrat Barack Obama is raising money for the general election with the option of giving it back if he, providing he wins his party's nomination, eventually decides to accept public financing. But what matters is that he and others are taking general election money now, and it will show up on their quarterly reports.
Moves like this have the effect of artificially inflating fundraising reports, says former Democratic National Committee Chairman Steve Grossman, who has donated to Clinton's campaign. He notes that while campaigns will be flush with general election funds, that money is essentially off-limits until a candidate formally accepts the nomination.
"If I'm a candidate with $25 million in the bank and $10 million of that is general election money that's escrowed but shows my prowess, I really only raised $15 million," Grossman said. "That $15 million, while an impressive number, isn't that much more impressive than the $10 million raised by Howard Dean in the 2nd quarter of 2003."
• Compressed Calendar: In previous cycles, after initial contests in Iowa, New Hampshire and, recently, South Carolina, the primary season became somewhat drawn out. "Super Tuesday" included about a dozen states and occurred in mid-March, by which time the nominee was all but decided. This meant that the early states, all of which are relatively small with no major media markets, held sway.
In the early days of the 1996 presidential campaign, Republican Sen. Phil Gramm of Texas won attention for building a massive campaign war chest during the first quarter of 1995. How large were Gramm's cash reserves? A little over $8.4 million, putting him at the front of the pack in the race to challenge President Clinton. The man who eventually won the Republican nomination, Sen. Bob Dole of Kansas, had less than $2.5 million on hand at the end of March 1995.
Fast-forward to today, the eve of the fundraising deadline for the first quarter of 2007. Democrat Hillary Clinton raises $2.6 million in one night. Republican Mitt Romney did even better, taking in $6 million in one day.
Republican John McCain says he might not meet his fundraising goal, yet analysts still believe he'll pull in at least $20 million, which would easily eclipse the $15.6 million Gramm, who ended up dropping out before the New Hampshire primary, raised through all of 1995.
The rise in campaign fundraising numbers is shocking not only in size but also in speed — raising the bar of expectations to $30 million has been anything but gradual. At the end of the first quarter of 2003, the five Democrats then considered serious contenders for their party's nomination averaged just over $5 million in contributions. That amount was actually lower than the average posted by the top four Republicans running in the spring of '95.
So why, and how, have fundraising numbers gone up by so much and so quickly?
The answers lie in many places: the laws regulating campaign contributions, changes in how candidates are raising money and the unique political environment surrounding the next election.
• Higher Limits = Higher Totals: Until the 2004 campaign cycle, individuals could donate only $1,000 per election to a presidential candidate — once for the primaries, and once for the general election. The campaign finance overhaul law known as McCain-Feingold changed that, immediately boosting the limit to $2,000 and indexing it to inflation. The cap now stands at $2,300 per election, or a total of $4,600 per person for the entire cycle.
The new rules had just gone into effect in early 2003 and hadn't quite sunk in yet, said Evan Tracey, CEO of the Campaign Media Analysis Group. "You have a new set of books. This is the first full general election where all the strategists could focus on it for four years," he said. "By and large, the first-tier candidates have been at this a while."
• Doing the Double-Dip: The top-tier candidates have also taken the (until now) unprecedented step of raising money for both the primaries and the general election at the same time. This represents a dramatic departure from 2004, when even President Bush, with his massive fundraising network, didn't raise money for the general election in favor of accepting public financing.
Some of the candidates are doing this with caveats — Democrat Barack Obama is raising money for the general election with the option of giving it back if he, providing he wins his party's nomination, eventually decides to accept public financing. But what matters is that he and others are taking general election money now, and it will show up on their quarterly reports.
Moves like this have the effect of artificially inflating fundraising reports, says former Democratic National Committee Chairman Steve Grossman, who has donated to Clinton's campaign. He notes that while campaigns will be flush with general election funds, that money is essentially off-limits until a candidate formally accepts the nomination.
"If I'm a candidate with $25 million in the bank and $10 million of that is general election money that's escrowed but shows my prowess, I really only raised $15 million," Grossman said. "That $15 million, while an impressive number, isn't that much more impressive than the $10 million raised by Howard Dean in the 2nd quarter of 2003."
• Compressed Calendar: In previous cycles, after initial contests in Iowa, New Hampshire and, recently, South Carolina, the primary season became somewhat drawn out. "Super Tuesday" included about a dozen states and occurred in mid-March, by which time the nominee was all but decided. This meant that the early states, all of which are relatively small with no major media markets, held sway.
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