Saturday :: Dec 20, 2003

Running on Fumes

by CA Pol Junkie

by CA Pol Junkie

Jesse Unruh, when he was Speaker of the California Assembly, declared "Money is the mother's milk of politics". This is no doubt something of which Dick Gephardt, Joe Lieberman, John Kerry, and John Edwards are keenly aware. Every candidate needs the money to run ads in their key early primary states. Unfortunately, as I blogged a few weeks ago, doing poorly in the polls is a self-fulfilling prophecy because the candidate looks like a loser, donors go elsewhere, and the candidate becomes a loser because they can't advertise.

Let's start with how much cash each candidate had as of September 30th and how fast they were spending it:

Dean: Cash on hand: $12.4M; Q3 Raised: $14.8M; Q3 Burn: $8.8M
Clark: Cash on hand: $3.4M Q3 Raised: $3.5M; Q3 Burn: $0.1M
Gephardt: Cash on hand: $5.9M Q3 Raised: $3.8M; Q3 Burn: $4.2M
Lieberman: Cash on hand: $4.1M Q3 Raised: $3.6M; Q3 Burn: $3.6M
Kerry: Cash on hand: $7.8M Q3 Raised: $4.0M; Q3 Burn: $7.1M
Edwards: Cash on hand: $4.8M Q3 Raised: $2.6M; Q3 Burn: $5.9M

The burn rates only increase, though, as each candidate's organization expands and money is spent on ads. Contributions are expected to lag for all candidates besides Dean and Clark in accordance with their falling position in polls. If the contributions drop by 50% and the burn rate increases by 50%, each of the lagging candidates is left with approximately $0 at the end of the fourth quarter. A good Knight Ridder article summarizes the problems faced by the lagging campaigns.

Gephardt: Last month Rep. Richard Gephardt of Missouri asked his senior campaign staff to take a pay cut.

Lieberman: Paid staff have been asked to volunteer to defer one of their two January paychecks to free up cash for a last-ditch advertising blitz in New Hampshire, site of the first Democratic primary voting on Jan. 27.

Kerry: Sen. John Kerry of Massachusetts reported Wednesday that he will loan his campaign $850,000 from his personal fortune and will take out a second mortgage on his Boston mansion to give his campaign more money soon.

Edwards: Fundraising for the campaign of Sen. John Edwards, D-N.C., is "going very well We're doing well enough to implement our plan," said Edwards spokesman Roger Salazar.

Looking at the third quarter numbers, it's clear that the Edwards campaign is spinning, but at least they haven't announced cutbacks. Fester's Place has estimated matching funds, coming up with on the order of $5M to be available to each of the lagging candidates. CNN came up with similar estimates. The matching funds will be disbursed on January 2nd, in time to help with the early primaries.

Even with matching funds, each of the lagging 4 candidates is counting on just-in-time financing: strong showings in early primaries to bring in a surge of cash and keep them afloat. It didn't work for Gephardt in 1988 - he won Iowa but his campaign ran out of cash anyway. It looks pretty sad for Lieberman if he's counting on New Hampshire to boost his campaign, since he's running 34-39 points behind Dean in this week's polls. Edwards is hoping for a surprise in Iowa and/or New Hampshire to bring in money to help with February 3rd states and beyond. Kerry needs to beat the expectations game in Iowa and New Hampshire or he'll be selling his furniture on e-Bay. For each candidate that fails at the polls, financial ruin will bring a quick death to their campaign.

CA Pol Junkie :: 12:14 PM :: Comments (8) :: Digg It!