Candidates are already running out of money

NY Times:

The 2008 presidential race long ago shattered all fund-raising records. But lately even the best-financed campaigns are feeling short on cash.

The leading presidential candidates raised and spent tens of millions of dollars on the same ultimately unsuccessful goal: to knock out their opponents with decisive victories in the early nominating contests of Iowa, New Hampshire and, for the Republicans, Michigan.

Together, the top six candidates across both parties are projected to have brought in a total of more than $400 million and burned through at least 80 percent of it.

Now, the top three Democrats and the five or so Republicans all find their bank accounts depleted just as the most expensive phase of the race is about to begin. The candidates are entering a far-flung battle, with more than 20 other states voting in the three weeks that follow regional skirmishes on Saturday in South Carolina and Nevada. Strategists acknowledge they will have to make tough choices, especially since both parties face the prospect of prolonged nomination fights that could extend into the spring — or beyond.

“It is almost like the elections that have been held so far have reset the clock and we are starting the game all over, except that the money has largely been spent and there is no time to replace it,” said Steve McMahon, a veteran operative who worked for the primary campaign of Howard Dean, a Democrat, four years ago. “It is like we have just taken a mulligan.”

Advisers to Senator Hillary Rodham Clinton of New York and Senator Barack Obama of Illinois have said their primary campaigns had each raised about $100 million by the end of last year. But both were spending more than $7 million a month in the third quarter, and spent an additional roughly $15 million apiece on television advertising in the early contests. The campaigns will not report their year-end figures until Jan. 31, but Mrs. Clinton’s advisers have said she came out of the New Hampshire primary with about $20 million left, and Mr. Obama appears to be in a similar position.

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Most of the Republicans, who badly trailed the Democrats in fund-raising last year, are even harder-pressed. Rudolph W. Giuliani, the former New York City mayor and the biggest fund-raiser among the Republican candidates, brought in more than $60 million last year. But he was burning through more than $4 million a month in the third quarter, had spent about $4.5 million on advertising by the middle of January, and acknowledged last week that he had only $7 million left. A dozen senior staff members gave up their salaries as an emergency measure.

Mitt Romney, a financier with a personal fortune of more than $250 million, is the only Republican whose campaign is not feeling the pinch: he has pumped more than $17 million of his own money into his campaign, and his advisers say he shows no sign of slowing down.

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What has happened here is that the Democrats fund raising advantage has bought them nothing. It is very likely that their nominee will be as broke as the Republican nominee once the matter is resplved, unless the GOP selects Romney who can still self fund. I suspect that the fund raising may pick up for some of the candidates as they go to the bigger states. One dynamic that will make this happen is that people in states like Texas California and New York will have a chance to effect the outcome and the fat cats in those states may be holding back so the money will be spent locally.