GOP Hopefuls Trailing Top Democrats in Money

Perhaps more than ever, the "money primary" in the 2008 nomination race is proving to be more important in sorting out the top contenters in both parties. The big news on the campaign finance front over the weekend was Barack Obama's record $32 million haul in (mostly) individual contributions. Obama surged past Hillary Clinton's "fundraising machine," as this Washington Post story indicates, and the first-term senator is looking to knock Clinton off her perch as the Democratic Party's establishment frontrunner.

On the Republican side, Rudy Giuliani and Mitt Romney raised less than their Democratic counterparts, with $17 million and $14 million respectively:

The presidential campaigns of Mitt Romney and Rudolph W. Giuliani released fund-raising totals for the second quarter this afternoon that showed them trailing significantly behind the Democrats in raising money.

Mr. Romney’s campaign announced that it brought in $14 million in contributions for the second quarter, and that the former Massachusetts governor had personally lent his campaign $6.5 million. Those donations to his campaign represented a drop from the $20 million he raised in the first three months of the year.

Mr. Giuliani’s campaign raised $17 million from April through June, a slight increase from the $16 million that the former New York City mayor raised during the first quarter, when his fund-raising was just getting started after the announcement of his candidacy.

The overall figures show the Republicans trailing the top Democratic presidential candidates, Senator Hillary Rodham Clinton of New York and Senator Barack Obama of Illinois. Mr. Obama raised $32.5 million from April through June, while Mrs. Clinton raised $27 million.

The fund-raising figures announced by Mr. Romney, while a decline from the first quarter, were still several million dollars more than the $11.2 million raised by Senator John McCain, the Arizona Republican, during the period. In announcing its numbers on Monday, the McCain campaign also said it was laying off dozens of workers and aides, a development that raised questions about whether he will continue in the race.

The sizable loan from Mr. Romney to his campaign, however, along with the additional contributions from donors, left him with $12 million in cash on hand, roughly the same amount that he had at the end of the first quarter, compared with the $2 million Mr. McCain has left now.

Mr. Romney has been plowing through his money rapidly, pouring much of it into an expensive early advertising campaign focused on Iowa and New Hampshire that has paid off by helping him to leads in recent polls in both states.

The Giuliani campaign said it had $18 million cash on hand and no debt.

McCain's a victim of his own campaign reform policies. Small contributions have become more important to fundraising efforts since the 2004 election, and McCain's apparently not able to compete for the large numbers of contributors required to sustain a viable candidacy. Obama, on the other hand, has really tapped a rich vein of donors, and he looks like he'll be able to hold his base of supporters (many of whom are presumed not to have maxed out their contributions yet) and generate new supporters as his campaign continues to kick into high gear.

That said, according to this month's Fortune, Clinton is generating tremendous support among the country's CEOs. The New York senator may be best positioned to shake the corporate money tree well into the early primary contests and beyond. Note, though, this interesting observation from the Fortune piece:

For Clinton, there is an underlying tension between the candidate who can do business with business - and the candidate who must curry support from the party's left wing to win the nomination.

At a speech before grass-roots activists in Washington on June 20, she was booed by antiwar activists but applauded when she took corporate America to task. Deriding the country's "highest concentration of wealth ... since 1929," she declared,"Let's start holding corporate America responsible, make them pay their fair share again. Enough with the corporate welfare! Enough with the golden parachutes! And enough with the tax incentives for companies to ship jobs overseas. We have to make sure there is not a single benefit they would get for doing that."

Five hours later she was on the phone with Fortune - and her tone was far more measured. Asked how she could balance an appeal to business with that sharp rhetoric, the Senator answered, "To me it's about getting back into balance. It's the search for that balance that's appealing to a lot of business leaders. They know I'm trying to figure out how we can have shared prosperity." As any CEO can tell you, it ain't as easy as it sounds.

As the late California Assembly Speaker Jesse Unruh once noted, "money is the mother's milk of politics." As we head into a presidential election expected to be more expensive that ever, that truism is more true than ever!