Campaign Diaries

Republicans and Democrats released their fundraising numbers for the month of July, and their numbers are in line with what they had unveiled a month ago: After a string of rough months, the DNC continues its recovery and the Obama campaign significantly outraised McCain’s - paving the way for a massive financial dominance in September and October. Yet, the gap between the two parties isn’t (yet) as big as Democrats were hoping for earlier this year.

In July alone, the DNC raised $27.7 million - for the first time outraising the RNC, which took in $26 million. The GOP’s national committee remains far ahead of the Democrats’ in cash on hand, however, $75 million versus $28.5 million.

As for the campaigns, McCain had his best month in July, raising $27 million (up from $21 million in June). Obama’s campaign did raise much more - $51 million - but this represented their third best month, after February and June. That put the cash on hand as of July 31th at $65.8 for Obama and $28.5 million.

Put together, that puts the party + candidate total at near parity - just as it was last month - meaning that Democrats spent about $20 millions more in July than Republicans did. Democrats have $94.3 million of cash on hand compared to $96 million for the GOP.

What do these numbers mean for the coming months? For one, remember that McCain needs to spend whatever cash on hand he has by September 4th, the date at which he will accepts his party’s nomination. After that he will be limited to the $84 million of public financing. Assuming that Obama spends in August as much as he did in July and continues to raise at least $50 million per month until Election Day, that will give him about $160 million to spent in that same two-month period - nearly twice as much as John McCain.

In fact, Obama’s advantage is likely to be even larger: If he is raising more than $50 million in the summer months of dull campaigning, he is nearly assured of raising much more in September and October, when he will tap into donors who have already given the maximum of $2,300 for the pre-convention season and when small donors will come to the campaign more impulsively - just as they did in February.

This financial disparity represents a great potential here - and it is a complete reversal from the 2004 campaign where Kerry had to built an advantage by the summer since he was going to be outspent in the fall (since his convention was 5-6 weeks earlier). If Obama even finds a way to spend that much money in the space of two months, it should be more than enough to swamp McCain’s turnout effort, the reach of his campaign, number of campaign offices and TV ads. This has led to speculation that the reason Obama is not hitting McCain as hard as he could right now is that he is waiting for the fall, where McCain’s campaign will be forced to take budgetary constraints into account before deciding whether to respond.

It should also guarantee Obama will not have to choose to give up on certain states a few weeks from election day - as Al Gore had done in 2000 (giving up on Ohio) or Kerry in 2004 (giving up on Missouri, for instance). Obama might stop contesting places like Georgia - but it will have plenty of money to fund a large-scale campaign in much more states than Gore and Kerry could afford to in the past two cycles.

Of course, the RNC’s significant edge over the DNC will be a huge lifeline for McCain. It appears that the RNC is no longer expanding that gap - but the nearly $50 million at which the disparity stands now is already significant. Yet, as I explained last month, we should not treat the cash on hands in the hands of the campaigns with that in the hands of the party committees. Not only will the RNC and DNC not spend all their money on the presidential race (the RNC will probably have to come to the rescue of the RNCC) but relying on the RNC to attack Obama or help built a turnout infrastructure will cost McCain the control of his message as well as an overall view of the ground effort. We have seen over the past month that the McCain campaign was much better than expected in terms of driving a message home (Obama’s celebrity status…) and that’s a big part of the reason McCain looks to have improved its poll numbers over the past few weeks.