shutterstockwflag285_1
Image

Ralph Waldo Emerson once asked, Can anyone remember when times were not hard and money not scarce? The answer to the latter might turn out to be the 2008 presidential election, which may prove to be the most expensive political campaign in U.S. history. After only nine months of fund-raising in 2007 (the last period for which complete figures are available at press time), candidates had raised over $420 millionmore than half of the $674 million raised in the complete 2004 election cycle and more than the $352 million total raised in 2000. Before the votes are counted this November, the money chase could bring in more than $1 billion.

Who Got What?

To a great extent, the fund-raising dynamics of an election cycle are a function of the larger political dynamics. With wide-open contests for both parties nominations, no incumbents at the top of the ballot, a slew of animated and high-profile candidates and an evenly divided electorate, voter enthusiasm is high on both sides of the aisle. But Democrats may have more reason to be excited. A shaky economy, record-low and declining approval ratings for the Republican President Bush, an unpopular war in Iraq and a seemingly imminent recession may make 2008 an especially difficult year for Republicans. Political scientists have shown that dollars raised are related to prospects for victory, which helps to explain why Democrats running for president across the board have been raking in the dough and helping to dismantle the fund-raising advantage Republicans have historically enjoyed. At the end of the third quarter of 2007, Democratic presidential contenders had raised more funds than Republicans by a 1.5-to-1 margin ($244 million to $175 million respectively).

The two leading Democrats, New York Senator Hillary Clintonthe first candidate ever to announce she would eschew public funds for both the primary and general election campaignsand Illinois Senator Barack Obama, have raised unprecedented sums. Clinton had collected nearly $91 million at the end of the third quarter, while Obama brought in over $80 million. The other Democrats also raised impressive amounts. Despite the uphill battle Republicans may be facing in 2008, Republican contenders also attracted considerable sums from donors (see tables).

Where Does the Money Come From?

Donors contribute to political campaigns for many reasons. Some contributions are purposefully aimed to advance or support a policy agenda, while other donors enjoy the social benefits associated with giving: networking, name recognition and more.

Material motivesquid pro quo expectations to get something in returninduce at least some donors to give, but campaign finance laws are designed to prevent such impropriety. This is one reason why the fourth quarter presidential fundraising totals reveal candidates raised $582.5 million and spent $481.2 million, according to the Center for Responsive Politics. The figures are in line with the fundraising trends for the first three quarters of 2007.

On the Democratic side, amongst candidates still in the running for the nomination, Senator Hillary Clinton raised the most money in the final quarter of 2007, bringing in $26.6 million. Overall in 2007, Clinton raised an unprecedented $115.7 million. Senator Barack Obama raised $22.8 million in the fourth quarter, bringing his total intake for 2007 to $102.2 million.

Republicans also raised impressive sums during the fourth quarter. Former Massachusetts governor Mitt Romney led the field (in both the 4th quarter and overall for 2007). In fact, Romney beat out both Democratic contenders in the 4th quarter to raise $26.9 million, raising his cumulative intake for 2007 to $88.5 million, more than twice what the next-best fundraising candidate, John McCain, brought in during 2007. McCain raised $9.7 million in the final quarter, for a 2007 grand total of $41.1 million. Ron Paul, who trails far behind in polls, showed considerable fundraising prowess in the 4th quarter and overall for the year. Paul brought in $19.8 million in the last quarter and $28.1 million overall. Former Arkansas governor Mike Huckabee, who won the Iowa caucuses in January 2008, had his best fundraising quarter to date in the 4th quarter, raising $6.6 million of his overall 2007 total of $9 million.

Going into the 2008 contests, candidates are also spending heavily. Fourth-quarter reports showed Clinton and Obama have already spent $77.7 and $83.5 million respectively in 2007. Clinton ended the year with an advantage over Obama in terms of available funds; Clintons cash-on-hand at the end of 2007 was $38 million compared to only $18.6 million for Obama. Still, Obama continues to raise impressive amounts. The Obama campaign, perhaps capitalizing on victories in states like Iowa and South Carolina, reportedly raised over $32 million in January 2008 alone.

Mitt Romney had spent nearly all his money by the end of 2007 ($86.1 million) and was left with a cash-on-hand total of $2.4 million. McCain spent a total of $38.2 million and was left with $3 million at the end of 2007. Ron Paul had the upper hand in terms of available resources at the end of 2007, with $7.8 million on hand. Paul spent $20.3 million in the year. Mike Huckabee, who spent $7.1 million in 2007, had $1.9 million cash-on-hand at the end of the year.

This article appears in February 11 2008.