Politics & Policy

McMoney

McCain neutralizes Obama's fundraising advantage.

Earlier this summer, the McCain campaign began running their “celebrity” ads, which, in a neat bit of messaging jujitsu, effectively turned Obama’s popularity into a question about his experience. Former Washington Post writer Sridhar Pappu summed up the genius of the ads thus:

Whatever one might think of the ad’s execution, as far as the McCain campaign was concerned, it at exactly the right time for exactly the right purpose: To plant seeds of doubt in the summer that will grow into a full-scale assault — turning a candidate’s greatest strength into his weakness — by the first leaves of fall.

Aside from Obama’s popularity, his other great strength as a candidate is his seemingly limitless fundraising. Obama’s candidacy has been the closest thing to a license to print money that politics has ever seen. So much so that, after explicitly endorsing public financing, Obama flip-flopped and decided to forego public financing for a shot at raising unlimited amounts of campaign cash. At the time it looked like the smart, if not exactly principled, move.

Now, it looks like this other great strength in fundraising is turning into a major weakness. The New York Times reports that the Obama campaign is describing recent fundraising efforts as “extremely anemic” and looks to fall far short of its goal of raising $450 million between the campaign and the DNC.

McCain, on the other hand, is sitting pretty. The campaign finished August with a cool $100 million in the bank between the campaign and RNC, and that’s before $84 million in public financing. The campaign is now forbidden from raising any more money, but can lean on the RNC’s consistently good fundraising. The McCain team has a comparatively modest fundraising goal of raising another $100 million through the RNC in the next two months.

Miraculously, with about $300 million expected to come in, this should put them on rough fundraising parity with the Obama campaign. It also means that, despite the fact that the McCain campaign has been vastly overspent in previous months, all the Obama money spent up until now doesn’t amount to much of anything.

With over 2,000 paid staff, Obama campaign’s overhead dwarfs McCain’s. And while the size of Obama’s campaign is unprecedented, so is its burn rate — the campaign has been known to spend as much as $42 million a month. The Democrat has been spending millions more on ads than his Republican rival — and to questionable effect. To cite just one example: through the beginning of August, Obama spent $5 million on ads in Florida to McCain’s nothing. And yet McCain has consistently led in the state. With McCain narrowly leading in most national polls, every dollar Obama has spent on advertising up to this point is effectively moot.

Further, McCain has been able to rely on the RNC to augment the campaign’s fundraising, whereas the DNC’s fundraising has been lackluster — having been outraised by the RNC in this election cycle by more than two-to-one. What’s more, according to the latest figures, the DNC has already spent most of the money they’ve raised — some 96 percent of it. The DNC sank $55 million into staging the convention alone. And despite gutting the Pepsi Center in Denver to install a stage set-up that would make Pink Floyd blush — and renting out Invesco field (where the Democrats literally hired Britney Spears’ stage crew) — the Democratic convention was dominated by talk of a rift between the Clintons and the Obamas, and the lackluster veep pick of Joe Biden ensured that the traditional post-convention bounce lasted only a few days.

While it’s too early to tell if the success in the polls McCain is currently enjoying will last, one thing is certain: McCain emerged from his convention in a much stronger fundraising position. If the Democratic convention was all about appearance, the comparably poor stagecraft of the Republican convention had at least one big attraction: Sarah Palin. As far as conventions go, the Democrats tried to put lipstick on a pig, as Obama is so fond of saying; McCain put lipstick on a pit bull and emerged from the convention with the money rolling in.

With the emergence of Sarah Palin as a bona fide political star, not only has McCain seen an uptick in the polls and in the size of crowds at rallies, but in campaign contributions, as well. As just one indication of Palin’s star power, the McCain campaign is charging $50,000 to sit at her table at an upcoming California fundraiser. While there isn’t exactly a market to compare that rate, it’s a safe bet that no one would pay $50,000 to have their ear chewed off by Joe Biden.

In the span of some two weeks, Governor Palin has become the biggest fundraising draw in the Republican party, far outstripping Senator McCain, President Bush, or Vice President Cheney. McCain recently pulled in $4 million from a fundraiser in Chicago where he was in town for only a few hours. It’s a safe bet that McCain would not have pulled that off a few weeks ago, without Palin in attendance.

By contrast, Obama is in a crazed dash for dollars. With less than two months to go before the election, Obama should be campaigning full bore, but instead has a whopping 40 fundraising events scheduled in September.

So how can Obama fight back? The Atlantic’s Marc Ambinder, who just a few months ago was saying that Obama’s ambitious fundraising goals wouldn’t be a problem, is now reporting that Obama is spooked and has decided to invite the money changers into the Temple — in the form of 527 organizations — and is now signaling that outside groups are welcome to run independent attack ads against McCain.

Ambinder notes that the two largest 527 groups — the Service Employees International Union and America Votes — are liberal Obama backers. Further, Progressive Media USA — headed by former right-wing hatchet man turned left-wing hatchet man David Brock — had previously announced that they were gearing up for a $40-million ad campaign against McCain. Progressive USA only backed off at the insistence of the Obama campaign. Now, all bets seem to be off.

But unleashing the 527s may be a risky strategy for Obama. After being roundly condemned for flip-flopping on public financing, it’s hard to imagine that Obama will be feted for fully embracing “swift boat” tactics. And in the war of unregulated media attacks, it’s hard to see how Obama comes out on top, anyway. The most damaging ammunition seems to belong to the Right, as conservative 527 groups could run footage of Jeremiah Wright, William Ayers, and Tony Rezko every hour on the hour until November 4.

The Obama campaign isn’t in dire straits yet, but it’s clearly not where it wants to be at a time when McCain is ascendant. This turn of events could be attributable to hubris and mismanagement on the Obama campaign’s part, but it can’t be underestimated how canny the McCain campaign has been thus far at conserving its resources and knowing when to marshal them. If McCain somehow wins this election — an outcome that’s still far from certain — one of the biggest stories of the campaign will be how McCain outflanked the Obama fundraising juggernaut, once again turning one of their rival campaign’s biggest advantages into a major weakness.

 – Mark Hemingway is an NRO staff reporter.

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