And while it would be fun to jump on the various tax items that a lot of Democratic pundits had fun with this weekend -- especially Romney's decision not to claim more than a million dollars in deductions because it drove his effective rate to truly unseemly levels -- the pile of money in the returns turned my thoughts to a money issue more directly tied to the election: campaign fundraising, especially for the new SuperPACs that have hulked over all things campaign-finance this cycle.
One of the especially bad developments for Romney in August was that he both his campaign fund and his supporting SuperPAC fell behind Barack Obama in fundraising. Campaign momentum aside, there are some interesting structural reasons why Obama's campaign fund may very well outraise Romney down the stretch. According to stats from a recent New York Times article, Obama's fundraising base contains a very large number of small donors. He has collected more than twice as much money from donations of less than $200 than has Romney. While many Romney donors have already donated the federal maximum of $5,000 in this cycle ($2,500 for the primary, another $2,500 for the general election) these small Obama donors haven't nearly approached federal campaign limits and can presumably keep donating right through November.
In fact, many of the small Obama donors have been donating on monthly payment pledges that will keep the money flowing into the Obama campaign fund right through November. Many other small donations come in the form of entries in various online contests that the Obama campaign offers, such as an entry in a "Have Dinner with Barack" contest. And sometimes, the small-donor base just fires off another $5 or $50 or $200 credit-card payment whenever Romney says something that particularly annoys them.
Surprisingly, not all of Romney's big donors from the primary have maxed out to his general election campaign. According to the same New York Times article, 32,000 donors who gave the maximum $2,500 donation to Romney's primary campaign have yet to donate to his general election campaign. This could be good news for Romney, another $81 million in donations just waiting to be scooped up. Or it could be very bad news for Romney if it means that more than 30,000 deep-pocketed donors decided that investing any further in the Romney campaign was a bad investment.
Even more surprising than Obama's edge in campaign-specific fundraising in August is that Obama's SuperPAC (Priorities USA Action) also outraised Romney's SuperPAC (Restore Our Future) in August. The SuperPAC structure was expected to give the Republican Party a decisive fundraising edge this year. And so shortfalls in the wild and woolly world of unlimited donations are a very bad sign for Romney. It may be that this was a blip for the Romney campaign due to a poor convention for the GOP and a good convention for the Democrats. Or it could be another sign that the state of the Romney campaign has led Republican donors to shift their donations elsewhere.
As we saw in the primaries, fundraising is a good indicator of support and enthusiasm for a campaign. As hope for victory dries up, so does fundraising. A lot of commentators like to credit fundraising for victories. (i.e. "Candidate A won because she outraised Candidate B by a 3:1 margin.") And indeed, strong fundraising and smart spending are two important signs of a strong campaign. But that analysis misses the point that campaign funds flow towards a winning campaign for many non-financial reasons that correlate with a victory. And while a shift in fundraising doesn't always correlate with a shift in the polls, a shift in fundraising that is also accompanied by a shift in the polls is a good marker of underlying change in the campaign. This seems to have been the case with Obama's August surge.
So, who are the SuperPACs and how much money do they have? Fortunately for us, the Wall Street Journal has created a handy online summary: How Much Are Super PACs Spending. Many of this year's SuperPACs are concentrated on congressional elections or primary challenges, especially Republican primary challenges by Tea Party candidates. They're all interesting, but the four largest SuperPACs merit a closer look. Here they are in decreasing order of cash raised, with expenditures updated into mid-September:
- Restore Our Future (supports Mitt Romney.) Raised: $96,667,002, spent: $83,999,252, on-hand: $12,667,750. Has raised $5 million or more from three donors, including $5M each from Sheldon & Miriam Adelson, who financed nearly all of Newt Gingrich's SuperPAC during the primary. This SuperPAC has thus far spent $70M+ opposing other candidates, mostly through negative advertising: $31M opposing Obama, $21M against Santorum, and $19M against Newt Gingrich.
- American Crossroads (opposes various Democrats.) Raised: $56,764,412, spent: $13,513,512, on-hand: $43,250,900. This is the famed "Karl Rove SuperPAC." As of Aug. 31 it had by far the most cash on hand, and had spent $11,546,973 of $12,840,081 (90%) in opposition to Obama. Their decisions and actions over the next six weeks will be interesting.
- Priorities USA Action (supports Barack Obama.) Raised: $35,636,122, spent: $30,046,678, on-hand: $5,589,444. Has raised $2 million or more from five different donors, and has spent 100% of its money opposing Mitt Romney, mostly through negative ads.
- Winning Our Future (supported Newt Gingrich.) Raised: $23,921,215, spent: $16,319,639, on-hand: $7,601,576. Remember the sad spectacle of Newt Gingrich traipsing out to Vegas every other week, hat in hand to drum up another check from Sheldon & Miriam Adelson to keep his flagging campaign alive for a bit longer? In the end, the Adelson's donated $20,000,000 (84%) of the nearly $24 million gathered by Gingrich's SuperPAC. And it appears that Adelson associates made up another big chunk beyond that. What's most interesting to me is that it looks as if there's more than $7 million still sitting in this SuperPAC's accounts. If so, what they plan to do with it is anybody's guess.
If Romney can make up some of Obama's lead in the polls, especially in the swing states, Rove seems likely to continue to spend the vast majority of this money on anti-Obama advertising. But if Romney continues to lag in the polls, a big pile of cash may get diverted into downballot candidates, to try to keep hopes of a Senate takeover alive for the GOP, to stave off losing to the House to the Dems, or possibly even to try to hold or take some state legislatures and gubernatorial seats that may still be close.
In the last few weeks there's been a lot of hand-wringing among conservative pundits and a lot of premature victory parties among liberal pundits. But as we come down the final six-week stretch of Campaign 2012, my pick for the most telling vital sign of the Romney campaign may just be how American Crossroads spends its massive war chest. If American Crossroads continues to drop 90% of its money on anti-Obama ads in swing states, it's likely that the panic level inside the Republican establishment is being overstated by the media. But if you see their spending move away from the Romney campaign and towards struggling House, Senate, or state office candidates, you'll know that even Karl Rove has thrown in the towel on Mitt Romney's candidacy.
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Footnotes
- Super PAC Influence Falls Short Of Aims. By Neil King, Jr. Online.wsj.com. Sept. 24, 2012.
- Low on Cash, Romney Tries to Rally Donors for Final Phase. By NICHOLAS CONFESSORE, JO CRAVEN McGINTY and DEREK WILLIS. NYTimes.com. Sept. 20, 2012.
- Wall Street Journal online: How Much Are Super PACs Spending? Created by Jeremy Singer-Vine, based on FEC documents. Filings as of Aug. 31, 2012.
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