THE MONEY GAME: FIRST QUARTER
OBAMA’S STUNNING FUNDRAISING UPSET: WHAT IT MEANS FOR HILLARY
The Clintons had it all figured out.
They thought they owned the Democratic Party.
They thought that the coronation of Hillary as President of the second Clinton Administration was a done deal.
They thought they could stop anyone who got in their way. And they tried.
They were already discussing cabinet members and focusing on how Hillary would ‘govern’ in 2009.
They thought that it would be quick and easy walk to the nomination -- with all the money and all the support going to Hillary.
But guess what? The Clintons were wrong!
There’s now a whole new ballgame in the Democratic race for president.
Senator Barack Obama's spectacular showing in the first quarter of fundraising demonstrates just how viable a candidate he is and just how strong a contender he will be in the Democratic primary.
Hillary’s got a problem: As his fund raising demonstrates, Obama’s not going away.
This race will be tight until the mega primary day next February. Hillary is not going to walk away with the nomination.
A newcomer to national politics, Obama has basically matched the renowned Clinton money machine in the first quarter of 2007. Competing against the former First Lady and the former President, veteran fundraisers who have been raising Democratic Party money for the last sixteen years, Obama, the neophyte, outdid them. He was fearless: He went into Clinton’s back yard in New York and called donors that she considered her own. He battled her for Hollywood money and he outsmarted her on the internet.
He has to be considered to be the Democratic winner of what Bill Clinton said would constitute, in effect, the “first primary” – the March 31st financial filing.
Not only did he raise $25 million for the quarter -- compared to Hillary's $26 million -- but almost all of that sum -- $23.5 million – will be available for the primary. That’s important because it means that he can go back to those people to contribute again for the general election. Each donor can give up to $2200 per election. So each person can give $2200 for the primary and another $2200 for the general election. While candidates can collect both sums now, they have to segregate the general election money in a special account that cannot be touched until after the primaries are over.
So far, Hillary has refused to say how much of the money that she raised can actually be spent in the primary. There were public reports that her fundraisers were pressuring donors to max out. But, until the mandatory public filings on April 15th, we can only conjecture that a far larger proportion of her money cannot be spent until after the Democratic convention.
But even more important is the fact that Obama raised $6.9 million online while Hillary raised only $4.2 through the Internet. Online one can reload quickly and fire often. The fact that Obama has amassed 100,000 donors -- including 50,000 online -- shows how effective he has been. Hillary tried hard. She sent out solicitation emails from Bill Clinton and James Carville. And the campaign sent out numerous additional emails pleading for online contributions before the March 31 deadline. The results were underwhelming.
The Clintons have been amassing donors for Hillary's 2008 race ever since Bill first ran in 1992. Year after year, armed with the prestige of the presidency in the 90s and the glow of an ex-presidency in this decade, they have courted and cultivated the rich and powerful. But Obama came from nowhere, from a dead start, to raise as much money, likely from more donors, than Hillary.
That is quite an accomplishment. Obama is for real!
One thing is for certain: this amazing showing by Obama definitely has the Clintons freaked. On some level, they knew it was coming. Last week, Clinton campaign chairman Terry McAuliffe issued a preemptory warning that Obama’s totals would be competitive. How did he know that? Could it be that a lot of the usual doors for Clinton dollars were being closed in their faces?
The Clinton campaign’s frenetic cross-country grab for dollars last week suggested uneasiness. They evidently knew that they would not reach their publicly stated $30 million goal. And, at the last minute, Hillary suddenly dumped the $11 million left in her Senate campaign account into her presidential campaign in an effort to put some daylight between her funding totals and Obama’s.
Worries about Obama can perhaps explain why they chose to leak their cash total to the Drudge Report on April 1st. How ironic that Matt Drudge -- who broke the Monica Lewinsky story and has been a constant thorn in the Clintons sides for a decade -- was singled out by them to report their cash totals ahead of the mainstream media. If there is anyone left who discounts the influence and reach of the Drudge Report, the Clintons have proven them wrong. Congratulations, Matt!
MORE DARK CLOUDS FOR HILLARY
There are more dark clouds waiting for Hillary. Since the Clinton money machine has been up and running for sixteen years now, the first quarter will undoubtedly be the easiest one for Hillary. She already had the names and support of hundreds of thousands of donors who have given to both her husband’s campaigns and to her own Senate races. Hitting them up again should not have been so hard. To come out of this process with only $20 million in large donations (plus $4 million online and $2 million through direct mail) is not a result worth cheering about. Depending on how many of these large donors maxed out could mean that she has fewer than 10,000 large donors. There should have been a lot more. Apparently some of her people are not in the giving mood. Remember that Hillary raised over $50 million for a basically uncontested Senate race just last year.
In her Senate campaign, Hillary spent $30 million to build a base of direct mail donors. Yet she reports only $2.5 million in receipts from direct mail this quarter. That is not a good result! If her direct mail list still loved her, she would have experienced a much, much higher return. (Could it be that milking them to fund her race for re-election to a Senate seat she would try to leave the minute the votes were counted was a bad idea?)
Hillary’s donors were complaining loudly by the end of the quarter about the campaign’s high pressure fund raising tactics. Bill was deeply involved in the fund raising, going to seventeen separate fund raising events in the last few weeks. (including one at a gym in Manhattan!) Bill also taped a fundraising video for the HillaryClinton.com web site. Terry Mc Auliffe reportedly warned some potential donors that Hillary would not forgive – or forget – those who did not support her now. He even asked one young woman how she expected to get appointed as the Ambassador to France if she didn’t give to Hillary. Sound familiar? Something like the White House coffees and sales of the Lincoln Bedroom?
If $26 million is all she could raise with this all out effort, one wonders what is wrong among her donor base.
During this entire quarter, Hillary had excellent poll numbers and a comfortable, although somewhat dwindling, lead over both Obama and Edwards.
She should have been able to do a lot better.
All of this doesn’t mean that Hillary won’t have the $100 million she’ll need to compete on Super-super Tuesday, February 5, 2008. She will. But it does indicate that she is not going to blow anyone away with so massive a fund raising juggernaut that nobody else need even try to compete. And that’s bad news for Hillary.
The crown is not going to be handed to her.
Meanwhile as Obama released his numbers today, Hillary stayed out of sight today and huddled with advisers, including Bill Clinton at her Chappaqua home. The New York Times fell hook, line, and sinker for the Clinton line that the meeting was scheduled long ago and was not about money. No, her advisers were going to get Hillary’s report on her trip to Iowa early this week.
You can bet that there was one subject that was discussed in great detail – Obama.
Watch your back, Obama!
DON’T DISCOUNT EDWARDS!
raised $14 million in the first quarter – twice what he raised in the first quarter of 2003 when he began his race for President last time. While overshadowed by Obama and Hillary, he still made a good showing. And he raised over $3 million on the Internet.
He’s still a player.
And his poll numbers have steadily climbed since he and his wife Elizabeth announced that she was once again afflicted with cancer. He’s leading in Iowa – with 27% of the vote against Hillary’s 19% and Obama’s 20%. And that’s despite four trips to Iowa by Hillary in the last month.
And his vote share is steadily growing in New Hampshire. He’s now at 21%, second to Clinton at 27% and just ahead of Obama at 20%.
In a national poll by Time last week, Edwards came in third at 16 % - a 6 point gain over the previous Time poll. Significantly, Clinton dropped 3 points to 31% and Obama dropped 2 points to 24%. Al Gore was included in the sample and received 15% of the vote.
Based on poll numbers and open ended statements of respondents, it doesn’t appear that the surge in Edwards poll numbers is due to sympathy for him and Elizabeth. That’s there, of course. But, voters seem to be giving him a harder look now that media attention is focused on the Edwards. And they like what they see.
Their appearance on 60 Minutes was successful. By 2-1. voters agreed with their decision to stay in the race.
And the amazing courage, honesty, and peacefulness of Elizabeth Edwards is inspiring voters around the country, especially those who are cancer victims themselves. Everyone wished her well, but few knew about the strength of this amazing woman.
All in all, Edwards is still a serious candidate, but is still overshadowed by Hillary and Obama. But his early and impressive lead in Iowa and competitive numbers in New Hampshire suggest that he is clicking with the voters.
OBAMA’S FUTURE: HE NEEDS AN ISSUE
Propelled by massive crowds, increasing enthusiasm, and a burgeoning war chest, Barack Obama is on his way. But, there is still a nagging problem: After gaining momentum throughout January and February, Senator Barack Obama lost four points in the Fox News poll of March 28th and gained only one point in the Gallup Poll of March 25th. (Fox News has Obama slipping from 22% to 18% during March while Hillary rose from 36% to 37%. Gallup, measuring a two-way race, shows Hillary holding steady at 56% while Obama moved from 36% to 37% during the same month).
While his poll ratings will probably improve given his dramatic showing the first quarter fund raising reports, the Gallup poll results suggest that he is getting as much support because people dislike Hillary as he is attracting by any affirmative message of his own.
When voters were asked by the Gallup organization why they were voting for Obama – in their own words – 52% cited a dislike of Hillary while an equal number -- 52% -- spoke of Obama’s positive qualities (many chose more than one reason).
By contrast, when the Clinton voters were asked to cite their reasons for backing Hillary, only 16% cited dislikes of Obama while 97% spoke of affirmative reasons to vote for Clinton.
WHY VOTERS WHO BACK OBAMA SUPPORT HIM
Source: Gallup Poll of March 25th
(note: Some voters mentioned more than one reason)
Do not like Clinton/Like Obama more than Hillary 18%
Clinton has too much baggage/
don’t want another Clinton 12%
Obama has better chance to win than Hillary 8%
Obama is less divisive or polarizing than Clinton 7%
Country is not ready for a woman president 7%
Comparative or Anti-Clinton Responses 52%
Agree with Obama’s issues positions or agenda 18%
Obama is fresh face with new ideas 13%
Obama against the war 7%
Obama is honest 5%
Obama will unite country 4%
Obama intelligent, smart 3%
Obama good Senator 2%
Pro-Obama Responses 52%
WHY VOTERS WHO BACK CLINTON SUPPORT HER
Source: Gallup Poll of March 25th
Clinton’s experience 33%
Like Clinton’s issues, agenda 21%
Clinton is a woman 14%
Bill Clinton was good president 9%
Clinton did a good job in Senate 8%
Clinton intelligent, knowledgeable 6%
Clinton is strong, tough 4%
Pro-Clinton Responses 97%
Don’t know Obama well enough 11%
Clinton has better chance of winning than Obama 3%
Country not ready for black president 2%
Comparative or Anti-Obama Responses 16%
Obama has a real opportunity to win votes by presenting a liberal program outlining what he would do as president. He can have the left all to himself. Hillary is hobbled by her status as the front runner and is risk-averse. Unwilling to alienate general election voters by taking liberal positions on key issues, Obama can flank her on the left all he wants.
Worried about being perceived as a dove – death for a woman candidate – Hillary is reluctant to move to the left in opposing the war in Iraq and has gone to great pains to stress how she will leave large numbers of troops there long after she is sworn in as president. Fearing a backlash over the memory of her abysmal failure to manage health care reform in 1993 and 1994, she won’t propose bold measures to reform the system, pledging only that all Americans would be covered by the time she leaves office.
In the meantime, Obama can move to the left all he wants. Far more worried about winning the nomination than about preserving the center ground for November, the Illinois Senator can venture far and wide to attract liberal voters.
HILLARY’S ASSET – EXPERIENCE -- COULD BECOME HER LIABILITY
The number one reason to back Hillary, according to the Gallup poll, is her experience, cited by one-third of those who support her candidacy. But everyone knows that it is a shared experience with her husband. He’s the one with experience. She says she spent eight years in the White House. So did the White House pastry chef! Does that make him competent to be a presidential candidate?
Other than her failed health care program, what did she do? The amorphous line that separates him and her and divides his presidency from her first ladyship is sometimes hard to pin down. But not when it comes to experience.
Bill is way too up front in Hillary’s campaign. If Bill were to disappear from the scene, Hillary could assume his mantle more easily. But her campaign’s practice of putting Bill out there almost every day to raise money, parry criticism, and complain about media unfairness to Hillary, is having the effect of undermining her key issue – experience.
One look at Bill and at Hillary tells voters all they need to know about who was president and who was just his wife. Bill is much more charismatic, knowledgeable, and comfortable on any stage. Hillary so obviously pales in comparison with her husband.
Voters will increasingly be reminded that Hillary’s experience was derivative, as indeed has been her entire political career. That she has put so much stock in her experience as her biggest campaign asset could backfire big time if voters begin to ask whose experience it really was anyway.
LEADS THE PACK IN FUNDRAISING, BUT WILL IT HELP HIS NUMBERS?
Announcing an amazing first quarter fundraising total of $23 million, Romney is the undisputed leader in the Republican money race. But, despite his prowess at raising cash, his numbers are dismal. The Time poll gave him a mere 11% of the vote. Rudy had 35%, McCain had 22%, and Newt had 12%. Fred Thompson was not included in the sample.
What’s wrong with this picture?
Romney has access to big money that is presumed to be from Mormons and Wall Street. But this strength from his fellow church members is also a big problem. Substantial numbers of voters indicate that they would not vote for a Mormon for President.
Romney’s religion shouldn’t be an issue and maybe he can turn it around as people get to know him. But for the moment, his disproportionate money raising abilities don’t seem to help him.
WHAT’S WRONG WITH McCAIN?
John McCain raised only $12 million in the first quarter – another bad omen for his candidacy. Once so promising, the John McCain candidacy is in a rut. His poll numbers are virtually unchanged since January. While Rudy Giuliani has soared into the 30s, he is stuck at 20% of the vote in poll after poll.
The Gallup Poll of March 25th suggests both the cause of his stagnation and paints a grim picture of his prospects.
Some voters feel he has abandoned his independence and others see him as an unreliable maverick. Generally, in politics, when you change your positions or your image, the only people who believe you have changed are the ones who used to like you and don’t anymore. The people who used to dislike you, who you are trying to appease by your metamorphosis, don’t think you’ve changed at all and generally still can’t stand you.
So it is with poor John McCain. Gallup reports that 10% of Rudy Giuliani’s voters feel that McCain is “too much of a maverick” while another 7% say that he “changes his positions too much on the issues. He’s not pleasing anyone.
And more trouble lies ahead….
Much of McCain’s support comes from voters who are not very familiar with Giuliani. As they get to know Rudy, some will likely defect to the New Yorker. Gallup reports that 18% of McCain’s voters --- almost one in five – say the reason they are backing the Arizona Senator is that they don’t know much about Giuliani. (By contrast, only 8% of Rudy’s voters say they don’t know much about McCain). As Giuliani fills in the blanks in his record and name recognition, the former New York Mayor is likely to continue to take votes from McCain.
A lot of McCain’s support comes from conservatives who think Rudy Giuliani is too liberal, particularly on social issues. While these voters provide momentary comfort for McCain and stop him from dropping below 20% of the vote in the Republican primaries, they are likely to desert the maverick McCain when a real true blue conservative enters the race.
Gallup reports that 16% of McCain’s voters back him because he is more conservative than Giuliani, particularly on abortion. While this perception is undoubtedly true, McCain is no conservative. An advocate of global warming legislation, an opponent of Bush’s tax cuts, and the sponsor of the anti-torture bill, John McCain will probably lose these voters if Gingrich or Thompson enters the race.
What is lacking in McCain’s image is any hint of the vigorous opponent of the special interests who dominated so much of the 2000 race for the Republican nomination. Unfazed by the torture of the North Vietnamese, it seems that this genuine American hero left his originality and independence on the playing field of the 2000 South Carolina Republican Primary.
AND WHAT MAKES RUDY GAIN?
Rudy raised $15 million – not as much as he should have. He’ll have to do better to stay on top. Giuliani may have caught his own advisors – and perhaps himself -- by surprise when he jumped into the race with both feet in January and soared out to a lead. But his fund raising logistics have apparently failed to keep pace with his surge. Unlike Obama, he doesn’t appear to have done the solid groundwork he needed to do to generate the cash necessary to sustain front runner status.
But still, Guiliani is bolstered by three factors according to the March 25th Gallup survey:
· 18% like his handling of 9-11 and his stands on terrorism
· 13% applaud his leadership skills
· 10% believe he was a good Mayor of New York
Rudy’s vote is based on these hard considerations rather than the softer virtues of “experience” that underlie McCain’s and Hillary’s support.
As Giuliani gets assaulted with negatives, the polling indicates that few are likely to hurt. The media (often egged on by the Clintons) can hit him all day on his re-marriage but voters feel they know his values and approve of them. (They also can be forgiven for wondering if Hillary can beat Rudy because her marriage is so happy.)
The firefighters union, disappointed at the fiscal discipline on which Giuliani insisted while he was Mayor, can knock him again and again, but nothing is going to take 9-11 away from Giuliani.
And no amount of focus on his social positions is likely to cost Rudy much backing. Voters know he is pro-choice, pro-gun controls, and pro-gay civil unions. But he is anti-terror and that’s what counts. American voters spent weeks with him after 911 as he calmly led the city.
THE CONGRESSIONAL ENDGAME ON IRAQ: A DEMOCRATIC DEBACLE
Even as the war in Iraq loses popularity, the Democratic Party is headed for a bruising division between its hawks and doves as the Congressional battle over war funding plays out in Congress.
The Democrats have unwisely embarked on a game of chicken with George Bush – never a good idea to begin with – by passing a funding cutoff amendment as part of the war appropriations requiring withdrawal by March, 2008. Bush is sure to veto the appropriations bill with the cutoff rider and the Democrats, who barely passed the bill in each house, won’t come close to enough votes to override.
Then a stalemate will ensue. Bush will demand a “clean” appropriations bill allocating funds for the troops without any amendment setting a withdrawal schedule. The left will vote against any funding legislation that does not include a requirement for an end to the war.
Pelosi and Reid won’t be able to stand the pressure. They will not allow themselves to be on the wrong end of a bill funding the troops while they are in the field in the middle of a war. Inevitably, they will cave in to Bush’s veto and pass a clean funding measure.
But their left wing members won’t go along. They will adamantly refuse to vote for a funding bill without a cutoff or a withdrawal date. Pelosi and Reid will have to work overtime, desperately rounding up members to back a bill clean enough to satisfy Bush. It won’t be easy.
And their efforts to get House and the Senate Democrats to vote for a clean bill will cause vast bitterness on the left. Charges of betrayal will echo in the chambers and the long awaited Democratic civil war of 2007-2008 will begin.
That war will probably continue throughout the campaign season and may well continue on after the Conventions if Ralph Nader capitalizes on it to fuel his presidential bid as a third party candidate.