Running on Empty
Newspapers are full of stories writing about how Senator McCain is spending money as fast as he can take it in, but according to Politico, that’s a problem that afflicts the entire Republican field. McCain’s dire financial straits are well-established, but he is trying to cut back on expenses, streamlining his campaign so he can stay in for the duration. However, it turns out both Romney and Giuliani’s campaigns are also flirting with financial ruin, and they are continuing to court it. Romney’s fundraising dropped by a third in the second quarter, a precipitous decline masked in part by his loaning his campaign $6.5 million.
Romney’s spending has, if anything, increased: He spent $4 million on advertising in the second quarter, along with over $14 million on his campaign. This means, not counting his $6.5 million “loan” (one which seems incredibly unlikely to be repaid, short of Romney being elected President) Romney lost millions in the second quarter. If his fundraising considers to decline by a third a quarter, Romney will be forced to almost entirely self-finance his candidacy, or drop out, before the year is finished.
It also creates a new context to Romney’s sons’ wholehearted support for his Presidential campaign. If Romney fails to be elected, a large portion of their potential inheritance will be lost forever. That’s one way to get your children to feel a stake in your campaign.
Giuliani seems all right for now. He raised $17 million, and has $18 million in cash on hand. However, he spend $11 million on his campaign apparatus this quarter (not including advertising), and is continuing to hire staffers. He raised $16.7 million in the first quarter, but he did that in roughly six weeks. If $17 million turns out to be his best quarter, and he keeps hiring people on, then he’s likely to begin to burn through more money than he raises in the third quarter.
If Romney and Giuliani have to cut back, they could be finished. Romney’s only rationale was his impressive fundraising ability, which seems to have been exaggerated. And unlike McCain, Romney and Giuliani need hordes of staffers. Senator McCain can look Presidential walking down the street alone. Former Mayor Giuliani and former Governor Romney need staffers and hangers-on and body men to look like anything more than bureaucrats.
