The Money

Four questions are generating the most chatter relating to campaign financing and the 2012 election.

First, will the Obama campaign be able to greatly outspend the Romney campaign the way it outspent the McCain campaign in 2008? The Obama campaign spent more than twice as much as the McCain campaign.

Second, how much money will be spent in one way or another on the Presidential general election campaign?

Third, how much money will be spent, the source of which is not disclosed?

Fourth, outside of the campaigns, will more money be contributed by major conservative donors as opposed to liberal donors?

The answer to the first question is easy. Romney will not be financially outgunned, as McCain was in 2008. Some 700-800 big givers and fundraisers showed up at a “retreat” in Utah. It was an impressive conglomeration of individuals, campaign and party officials, and Super PACs (some of which have associated 501(c)(4)s).

The more interesting question may be whether the Obama campaign will be outspent by the Romney campaign. It is a possibility, especially if all the Party, Super PAC, and 501(c)(4) spending is included in the equation.

The second question, on how much will be spent, is all but impossible to answer. There will be sources of spending brought to bear that are beyond anything we have experienced.

To the third question, we know a lot of money will be spent on the campaign, the source of which is not disclosed. But does it really make any difference? A very large number of really excellent Presidents of this country were elected with large amounts of money of unknown origin, including most of the money spent by the campaigns directly.

As often as not, at least among public officials, whether they are for or against campaign finance disclosure is much determined by whether they think it works for or against their interests.

While the amount of money that is spent on political communication can obviously affect elections, it is doubtful that voters entering the voting booth in 2012 will have this issue on the list of items on which they will base their votes.

When all is said and done, if you have a great deal of money that you want to spend on the coming Presidential or Congressional campaigns, you can do it without limit.

Fourth, it is likely that conservative contribution dollars will exceed liberal contribution dollars, and how those dollars are spent may be quite different. Conservative funders seem primarily interested in supporting large advertising campaigns. So far, the major liberal funders have not been on the playing field. As they begin to play it seems likely that they will focus on grassroots organizing, voter registration, and turnout of Democratic voters.

Finally, there has been some speculation that at least one Justice in the majority in the Supreme Court’s decision in Citizens United might be having second thoughts about the impact of that decision. If that is the case, his concerns are well hidden.

In its decision earlier this week, in the Montana case regarding a 100 year old state statute prohibiting corporate contributions to State candidates, the Court essentially reaffirmed the decision in Citizens United by throwing out the State statute.

And then, in an unrelated case, the Court put limits on the ability of unions to require nonmembers to contribute to the union’s political coffers.

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There is considerable consternation in some quarters about the amounts of money that individuals and some private corporations are giving to Super PACs and 501(c)(4)s, well as 527s, if they are still in favor. This is not a new phenomenon. No one really knows how much money was spent, by whom, through the 1968 elections. Even the money given during a large part of the 1972 election season was undisclosed or unlimited.

Here are examples of giving in various elections, based on published information about these contributions, and what those contributions represent in 2012 dollars.

1964 – One prominent businessman gave Lyndon Johnson’s campaign $18,000 (equivalent in 2012 - $133,000)

1968 – One prominent person gave Eugene McCarthy’s campaign $210,000 and another gave him $500,000 (equivalent in 2012 - $4,700,000)

2000 – A group of 10 Democrats spent a total of $11,150,000 ranging from $950,000 to $1,600,000 (equivalent in 2012 - $14,880,000)

2000 - 3 labor unions spent a total of $56,000,000 (equivalent in 2012 - $74,700,000)

2004 – A group of 5 individuals gave a combined total of $78,700,000 to liberal-leaning 527 organizations (equivalent in 2012 - $95,800,000)

2006 – One individual gave $13,900,000 to liberal-leaning 527s (equivalent in 2012 - $17,000,000)

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The following is an attempt to summarize campaign fundraising and expenditures for selected Presidential campaigns, national Party organizations, and the larger SuperPACs. The data does not include State political parties, 501c(4)s, or 527s. Some of the SuperPACs will also spend money on other Federal or State races.

The information below is based on Federal Election Commission reports.

The Obama campaign raised $39.2 million in May, for a total of $261.5 million through the end of May. The campaign has spent $154 million and has a net $108.5 million on-hand as of June 1st.

In the 2007-08 cycle (through 11/24/08), the Obama campaign raised $778 million and spent $760 million. To reach that amount, the campaign has to raise $516.5 million between now and the 2012 election. This amounts to roughly $103.3 million per month.

The Romney campaign raised $23.4 million in May, for a total of $123.6 million through the end of May, and has spent $106.6 million, leaving a net $17 million as of June 1st.

None of the above includes the amount that has been raised for the Democratic National Committee or the Republican National Committee, most of the resources of which will be dedicated to the Presidential campaign. To date, the DNC has raised $189.2 million and has $26.4 million on hand. The Republican National Committee has raised $169.4 and has $50.9 million on hand.

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Fundraising/Spending/Available Cash 2011-12 cycle (in millions of dollars)

* This committee is not engaged in the Presidential election. It is set up to challenge sitting members of Congress in both Parties. It has had some some success during the Congressional primary season.

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There is considerable discussion of the real and potential impact of SuperPACs, etc., on the Presidential election. At the end of the day, these PACs may have far more impact on Congressional races, where relatively modest amounts of money can have considerable impact.

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