- Feldman Strategies
'Doomsday scenario': Cash shortage squeezes huge Dem field
By David Siders, Zach Montellaro and Scott Bland 7/16/19
Months of bleak polling couldn’t stop the parade of lower-level Democrats crowding into the presidential primary.
But bankruptcy might.
Eleven Democratic presidential candidates — nearly half of the sprawling field — spent more campaign cash than they raised in the second quarter of the year, according to new financial disclosures filed Monday. Eight contenders active in the spring limped forward with less than $1 million in cash on hand, and several top-tier contenders were already spending multiples of what their lower-profile competitors raised.
The financial squeeze is set to drastically shrink the lineup of Democratic contenders in the coming months, barring major shifts in momentum, as candidates grapple with the doldrums of summer fundraising and the high costs of staffing national campaigns and building donor lists big enough to qualify for future Democratic National Committee debates. The numbers also reveal the tremendous pressure on lesser-known candidates to make a splash in the debates at the end of this month — potentially the last chance some will have to attract a burst of support as their expenses pile up.
“This is the doomsday scenario for a lot of campaigns, where they’re grasping for air to keep their campaigns alive and to live another day,” said Andrew Feldman, a Democratic strategist in Washington. “You can’t build an organization. You can’t build an operation that turns enthusiasm into votes without having resources to do it.”
The disclosures show a yawning gap growing between the Democratic primary’s five front-runners — who combined to rake in about $100 million — and a collection of rivals increasingly struggling to get by, thanks to combinations of low fundraising, relatively high expenses and little money built up in previous years or fundraising quarters.
Former Colorado Gov. John Hickenlooper spent a half-million dollars more than he raised in the second quarter, finishing June with $840,000 in his campaign account. Former Housing and Urban Development Secretary Julián Castro spent more than 80 percent of the amount he raised, despite a fundraising bounce following his highly regarded debate performance in the closing days of the fundraising period. He was left with about $1.1 million.
Entrepreneur Andrew Yang and New York City Mayor Bill de Blasio also finished the quarter with less than $1 million banked, while a bevy of well-known candidates spent more than they raised. Jay Inslee, the governor of Washington, raised about $3.1 million in the second fundraising quarter. But he reported spending $3.2 million and finished with only $1.2 million in the bank. Former Rep. Beto O’Rourke and Sens. Amy Klobuchar, Cory Booker and Kirsten Gillibrand all saw more money go out than in, though they have reserves built up from earlier fundraising successes.
“Some of these candidates need a miracle,” said Mathew Littman, a Democratic strategist and former Joe Biden speechwriter who now supports Kamala Harris. “It’s like if you’re a baseball team and you’re 15 games behind in mid-July, the odds are that you’re not making it to the playoffs.”
He said, “If you don’t have the money, you’re not going to have the infrastructure. And if you don’t have the money or the infrastructure, what are you going to do to break through? At this point, it’s just very, very tough.”
Presidential contests are not without examples of candidates succeeding despite a slow fundraising start. Republicans’ 2008 nominee, the late Sen. John McCain, nearly ran out of money the year before he captured the nomination.
But early money has become especially significant this year, as lesser-known candidates have been forced to spend heavily to meet polling and donor thresholds required to qualify for primary debates.
Poorer campaigns have been overwhelmed by top-tier contenders whose years-long investment in digital infrastructure has helped them to reach those thresholds — 130,000 donors, plus a showing of at least 2 percent in four polls to make the September debates.
Rep. Eric Swalwell acknowledged the problematic math facing a lower-tier contender when he became the first major candidate to end his campaign last week. Swalwell’s campaign raised just more than $880,000 in the quarter from donors and, like many of the others at the bottom of the pack, well outspent what it raised.
“We had the money in our account to continue to try and qualify for the upcoming debate,” Swalwell said. “But we believed that even if we had done that, that when we looked at the September debate, it just wouldn’t add up.”
The quarterly fundraising report remains a yardstick not only for candidates’ performance, but for their potential. Prospective donors watch past fundraising, and weakness in one filing can cripple a candidate’s prospects of a turnaround.
For candidates who hobbled through the end of the fundraising period, the full extent of their weakness is likely to be felt only now, after their reports are public.
“Money is a measure of viability,” said Kelly Dietrich, a former Democratic fundraiser and founder of the National Democratic Training Committee, which trains candidates across the country. “And a bad fundraising quarter — your viability will plummet, and it’s really hard to turn around.”
Five front-runners — Biden, Harris, Bernie Sanders, Elizabeth Warren and Pete Buttigieg — have secured spots in the September debate, and another three candidates have met the rising donor threshold: O’Rourke, Castro and Yang.
But many lower-tier candidates will be struggling to finance their operations in the weeks before that debate, while the frontrunners continue to expand their on-the-ground presences in early primary states. Warren spent $2.6 million alone in the last fundraising quarter on salaries going to 303 different people. That expenditure alone equaled what some candidates raised.
Montana Gov. Steve Bullock raised $2.1 million in his first quarter in the presidential race and spent less than a third of it, a positive sign for the underdog. But over $1 million of Bullock’s money came from contributors who gave the legal maximum donation of $2,800 — and thus won’t be able to give additional funds later this year to keep Bullock’s campaign in the black.
The chasm between the best-financed candidates and the worst is a challenge lower-profile Democrats were already attempting to head off as they reported underwhelming fundraising totals. Rep. Seth Moulton’s campaign, for example, headlined a statement, “Moulton Has the Resources to Compete on the Ground,” even as it announced he had raised just more than $1.2 million and had about $725,000 on hand.
For lower-fundraising candidates who previously raised large sums of money or could transfer money from old campaign accounts, the prospects are less grim.
O’Rourke saw his first-quarter fundraising plummet and his expenses rise, collecting about $3.6 million while spending about $5.3 million. But he still had about $5.2 million on hand.
Booker and Gillibrand similarly remain above water, despite spending more than they raised. Booker still had about $5.4 million in his account. Gillibrand kept afloat on past transfers from her Senate campaign. She still had $8.2 million in cash on hand as of June 30, which is more than she’s raised in the entirety of her presidential campaign.
Yet transfers from old accounts represent an advance that many other 2020 hopefuls do not have, especially those who were not federal officeholders. And that could soon spell the end for candidates flirting with the bottom of their bank accounts.
“You’re not going to see a lot of people continuing to give to a person with no money left,” Feldman said.