Campaign Diaries

As we entered October, I asked a series of questions that I said would go a long way towards determining the winner of the presidential election. Now that results are in, it is time to take a look back at them. We have already discussed the Palin factor and the turnout factor. Today, we will broaden one of my October questions (”will McCain have to cut funding to some battleground states in order to defend Indiana, Missouri and North Carolina?”) to a discussion of the money factor.

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From the very first financial reports of the presidential campaign - back in the spring of 2007 - Barack Obama stunned political observers by posting exorbitantly high fundraising totals, erasing what was until then seen as one of Hillary Clinton’s main advantages. By the time Super Tuesday rolled around, the New York Senator was left largely penniless, forced to scale back advertising in many states and budget her way through the late primaries day-to-day.

Obama brought the same fundraising prowess to the general election, and while his decision to opt out of public financing is pinpointed as a key factor explaining his financial dominance, that only affected the final two months of the race. McCain was massively outpaced by Obama even before he became constrained by the limits of public financing, especially in red states that Republicans thought they would win easily but where Obama invested millions - Florida, Missouri, North Carolina, Montana, Indiana, Georgia.

As we got nearer to Election Day, these states became increasingly competitive, forcing the GOP to finally start paying attention. Florida in particular became a money pit for Republicans. Though they remained significantly outspent throughout the fall, they still ended up pouring in millions every week in a state that had McCain leading by double-digits in the spring. The same is true in Virginia, where the McCain campaign inexplicably invested very little until it was already too late and stayed away from the Washington DC market (which reaches Northern Virginia) for as long as it could.

In fact, McCain spent so much money in those states Obama did not need to win as to be unable to keep up adequate levels of spending elsewhere. Republicans tried to implement an offensive game throughout the summer - they did not invest in Indiana and North Carolina but they did spend millions in Michigan or Wisconsin. But that was simply no longer possible once a wave of new red states started demanding attention, leading to McCain’s truly earth-shattering decision to pull out of Michigan on October 2nd.

The Wolverine State was long considered to be the ultimate battleground of the 2008 election, the state that would test Obama’s strength among Reagan Democrats and blue-collar white voters. In retrospect, Obama’s 16% victory might make the Democrats’ fear of Michigan puzzling, but this state, like many other blue states, only anchored itself in the Obama column after the financial crisis solidified the Democrats’ party loyalty. (The Michigan exit poll shows that Obama got 93% of Democrats in the state, a number that was almost unthinkable in early September.)

As of October 2nd, McCain’s decision to withdraw all of its staff and investment from Michigan was truly shocking, and it was dictated as much by falling polling numbers as by the worrisome financial situation. And it was only the first sign of things to come as McCain ended up withdrawing from nearly all blue states by the last weeks of the campaign - including always-promising Wisconsin. The situation became so dire that the McCain campaign could no longer afford funding a full operation in Colorado, as they scaled back some of their advertising in their most desperate move of the campaign.

It is important to appreciate just how low McCain’s finances had gotten by the middle of October that his campaign scaled back spending in what was essentially a must-win state for them, the only way to offset the loss of Colorado was to get a win out of Pennsylvania - and from that point on they were locked in a quixotic (and costly) quest for the Keystone State’s 21 electoral votes.

As a possible counter to the GOP’s money woes, a lot was made throughout the summer of the discrepancy between the RNC and the DNC: Despite Obama’s financial advantage over his opponent, the Republican National Committee was collecting a lot of funds, putting the McCain plus RNC addition on the same level as the Obama plus DNC total.

I warned repeatedly that a dollar held in the RNC’s coffers did not equal a dollar held in Obama’s - and the past few months proved that to be right. While the Obama campaign controlled how to spend the entirety of the Democrats’ money - whether the message, the electoral map, the timing - the division of Republican funds only heightened the schizophrenia of the GOP’s efforts.

The RNC did indeed have millions to spend on the presidential race, but they could either do so through their independent expenditure arm (meaning that no coordination is allowed between the ad’s makers and the McCain campaign, preventing the latter from having any control over messaging, issues raised and themes emphasized) or through coordinated expenditures split equally between the two entities, but the latter option was in many ways more problematic: These coordinated ads cannot just be aimed at one candidate, so the GOP’s attack ads often wasted their time on meaninglessly broad (and often counter-productive) segments against “congressional liberals” like Byron Dorgan and Chuck Schumer.

In my opinion, this only served to make Obama look like a generic Democrat - which is exactly what voters were looking for this year - and distracted Republcans from the only task that could have destabilized Obama - paint him as a risky, unfamiliar figure. McCain’s need to rely on RNC funds forced his campaign to go down the former route more than it might have liked to.

The Obama campaign, meanwhile, was free to spend its money however it wanted - and they had a lot of it to use. That became obvious when Obama revealed that he had raised $150 million in September alone and spent more than $100 million in the first two weeks of October - a crucial period of the campaign during which Obama solidified his lead. His decision to buy a 30-minute infomercial on a number of channels (including Fox, NBC and CBS) was only the icing on the cake of what was an amazing shoping spree.

Of course, congressional Democrats enjoyed a similarly dominant financial position, as the millions the DCCC and DSCC’s started spending in the summer (months before their Republican counterparts were able to make a move) proved decisive. National money is sure to have proved decisive, for instance, in Jeff Merkley and Gordon Smith’s Senate victories in North Carolina and Oregon. At the House level, Democrats fell short of their ambitions but a number of their candidates would have had a far tougher time crossing the finish line without the DCCC’s help.

Now that Democrats are firmly in command of both chambers of Congress and of the White House, money should continue to pour in their coffers - and there is no reason to think that the DCCC and DSCC will not have yet another significant financial advantage in the 2010 midterms.