Tom Edsall on politics inside and outside of Washington.
Mark Hanna, the Republican Party political boss, famously declared at the outset of the McKinley-Bryan campaign of 1896: “There are two things that are important in politics. The first is money, and I can’t remember the second.”
In the wake of the 2002 McCain-Feingold campaign finance reform act and the 2010 Supreme Court decision in Citizens United, things are far more complicated than they were in Hanna’s day: now, curiously, some dollars are worth more than others, and the way money gets spent is more important than the amount.
Start with the last presidential election. Most of the nearly half billion dollars — $374 million out of a total of $486 million — doled out by “super PACs” and other independent expenditure committees during the general election was by Republican groups, more than triple the $112 million spent independently in support of President Obama.
Clearly, this cash advantage did not tip the scales. Stuart Stevens, chief strategist of Mitt Romney’s campaign, argues that the huge expenditures by Republican groups were essentially wasted.
“What we discovered on our side, to our surprise and disappointment, was that there were some superb pro-Romney ads, but there was little impact on voters, not what we would have expected them to have,” Stevens told a postelection colloquium on Feb. 5 at the University of Chicago’s Institute of Politics.
Stevens argued that the “most important answer” in explaining the ineffectiveness of the super PAC ads “was that they were not coordinated with the campaign. They produced ads that were good as they stood alone, but they weren’t directing one message.”
Obama, according to Stevens, did not have this problem because he was less dependent on super PAC support and his campaign directly controlled a much higher percentage of the money spent on his behalf. Obama’s control of cash empowered his campaign to deliver messages and themes that his strategists wanted to stress with little competition from independent groups pushing for him.
Stevens cited Federal Election Commission reports to show that Obama was able to raise more “effective” dollars than Romney, even though the overall balance favored Romney by $140 million, $1.25 billion to $1.11 billion. The best way to see this is in Figure 1, which shows that, according to data compiled by the Center for Responsive Politics, the Obama campaign had full control over $683.6 million in 2011 and 2012, or 61.4 percent of Democratic presidential spending, while the Romney campaign had control over $433.3 million, which was 34.8 percent of all Republican money expended during the campaign.
Figure 1
Because they controlled over 60 percent of the money spent supporting Obama, his operatives were able to time and design most of the campaign messages conveyed by television, e-mail, phone banks and texting, and through person-to-person voter contact, while Romney’s strategists were able to time and design a substantially smaller proportion of the messages promoting their candidate.
These differences are illustrated in two additional charts put together by the Center for Responsive Politics, which show how Romney and Obama deployed their funds. Figure 2 shows that the Obama campaign spent $486.7 million on media while Figure 3 shows that Romney spent less than half that, $236 million, on media.
Figure 2
Figure 3
The tilt in Obama’s favor is in fact even larger than these charts suggest, because the Romney campaign had to spend $76.6 million in the primaries running against Newt Gingrich, Rick Perry and Rick Santorum. With no primary opposition, the Obama campaign was able to devote the entire $683.5 million it raised to winning the general election.
The Romney campaign’s cash flow became a critical problem from early April to the late August convention, according to Stevens. Romney had used up almost all the money donated to his primary campaign, and by law could not tap into his general election contributions until after formally receiving the nomination on Aug. 28.
“In key states, Obama was outspending us in the summer by 3 and 4 to 1,” said a highly placed Romney operative who spoke on background. “We were struggling to put up 1,000 [Gross Rating] Points in major markets and they would have 4,000. We were getting drowned.”
The ability of an unchallenged incumbent president to flood the airwaves during the summer of an election year, combined with the advantage an incumbent has raising general election money a full two years or more before the election, has significant consequences. Early money is crucial to the long-haul development and testing of high-tech voter contact research techniques. An incumbent’s built-in edge over out-party challengers, who must first spend millions to win the nomination, is now so strong that it almost guarantees two-term presidents.
In April 2012, when Romney had finally become the nominee, according to the operative who declined to be identified, Romney had $10.1 million left in the bank, one tenth of Obama’s $104.1 million.
Top Democratic strategists speaking at the postelection conference in Chicago backed up this argument.
“One of the most significant decisions we made was to bet on the front end of the campaign,” said David Axelrod, senior adviser to the Obama campaign. “We had an imperative to define the race and to define Mitt Romney before the conventions, and it was better to take money out of September and October and put it into May, June and July.”
Axelrod said the Obama campaign knew Republicans “would have a big primary and we had the time to put things in motion” and “that would ultimately redound to our benefit in terms of organization.”
Jen O’Malley Dillon, a deputy Obama campaign manager, said preparations for the 2012 contest began “pretty quickly after the president won his first election.” At the Democratic National Committee, where Dillon worked before joining the campaign, “a lot of what we did there was building the foundation for the re-elect. There were a lot of things that were under the radar: the analytics work, building on our internal polling, honing our 50-state strategy.”
The timing of the receipt of money is crucial — the earlier, the better — and the freedom to spend money on the general election, as opposed to on winning the nomination, is equally important.
In Chicago, both Stevens and Axelrod raised another series of questions about the evolving role of the super PACs.
Stevens argued that the super PACs in 2012 distorted the primary election, providing huge infusions of cash to candidates whose campaigns were, for all intents and purposes, over:
Campaigns never end because people want campaigns to end. They end because they run out of money. Super PACs took that quality away from the campaign. Super PACs elongated this race in ways we have never seen before.
This was especially damaging to Romney’s bid. Newt Gingrich’s campaign was kept alive by a total of $20.5 million contributed to the pro-Gingrich super PAC Winning Our Future by Sheldon Adelson, a Las Vegas and Macau based casino operator, and his wife, Miriam, money that was crucial to Gingrich’s victory in the South Carolina primary. Rick Santorum’s campaign was kept afloat by the $2.25 million given to the pro-Santorum super PAC, the Red, White & Blue Fund, by William Dore, head of Dore Energy, and by the $2.01 million donated by Foster Friess, head of Friess Associates LLC, an investment management firm.
Axelrod also criticized the Republican super PACs for failing to take on Obama directly early in 2012:
Our greatest fear was that the super PAC ads would hit in January and February and March when we were unprepared to deal with them. To this day I still am confused as to why this didn’t happen. If I am running a super PAC, I better provide some air cover.
Without saying so directly, Axelrod was criticizing the two groups Karl Rove created, American Crossroads and Crossroads GPS. In defense of American Crossroads and Crossroads GPS, Jonathan Collegio, spokesman for the two groups, wrote in an e-mail to the Times:
We made very clear early on, and publicly, that our ads were going to focus on Obama and his dramatic failure to turn the economy around — and virtually all of our ads did that, to the point that Obama was upside down on the economy by the time of the convention. And despite Obama outspending Romney by $100 million on TV ads over the summer, the Gallup ballot test actually got better for Romney between May and September —all because outside groups were simultaneously pummeling Obama.
If the critique is that we should have run positive ads, that’s a failure of understanding the limitations of campaign law. Outside groups cannot effectively run positive ads because the best positive ads feature the candidates themselves, and outside groups can’t coordinate with campaigns to generate candidate-to-camera footage.
In a second e-mail, Collegio argued that “the best data” in support of the effectiveness of the super PACS
is just looking at the Gallup trend between the day Santorum left the race and the end of the convention (or start of it, or any time thereabouts). Obama and his super PAC outspent Romney by literally $98 million over that period and the Gallup numbers went from Romney -4 to Romney -2. By his [Stevens’] logic the Obama ads didn’t move numbers!
The reality is that the super PAC ads canceled out the Obama ads and the numbers didn’t move. Obama tried to pull a Clinton ’96 and kill Romney in the cradle but failed because of the super PACs. Romney went into the convention with a good shot of winning.
An examination of the Gallup tracking data does not support Collegio’s argument. The Gallup data reveals that for the five days immediately after Santorum withdrew from the contest on April 10, giving Romney the nomination, Romney led Obama by an average of 3.8 points. On Aug. 27, the day the Republican convention began, Obama led Romney by 1 point, 47-46. On Aug. 31, the day after the Republican convention ended, Obama led by 3 points, 48-45. During the three-day Democratic convention, September 4, 5 and 6, Obama held an average 6.3 percentage point lead.
David Winston, president of The Winston Group, a Republican consulting firm, was broadly critical of the Romney campaign and of the Republican super PAC approach. The obligation of the Romney campaign and its allies, Winston said in a phone interview, was to go beyond “simply saying ‘here is why the president is wrong,’ ” to “clearly lay out what the choice was between.” When someone is unhappy with their car, Winston said, they don’t just junk it, but instead look first to find a better replacement.
In more detail, Winston laid out his critique of the Romney campaign in a postelection analysis available on his firm’s Web site:
In 2012, the door couldn’t have been more wide open for Governor Romney and Republicans to win a significant victory. The context for this election was a tough one for President Obama. He had had more months of 8% unemployment in his four years than the previous 11 administrations combined. The unemployment rate going into the election was 7.9%, a half a percent higher than Reagan’s 7.4%, the highest rate a sitting president has had and gotten re-elected (statistics started to be kept in January 1948). Economic growth had been 2% or lower for each quarter of this year, well below George H. W. Bush’s 4.2%-4.5% growth in 1992, when Democrats coined the phrase “It’s the economy, stupid,” and decisively beat Bush.
Winston continued, arguing that right after winning the primaries,
Governor Romney’s campaign decided to focus on making this a referendum on President Obama’s record. In contrast, the Obama campaign made the election a choice between the two candidates and their plans for the future. President Obama defined Romney in terms that would allow for a favorable contrast, particularly on economic policies, and in the end, the choice became moving forward with the economic policies of the present (Obama’s) or going back to the failed economic policies of the past (Romney’s/Bush’s). Because Governor Romney focused on Obama’s negative record at the expense of defining himself, the Romney campaign never engaged in the needed economic debate that would have given voters a clear understanding of his economic vision for the country, why it would work, and how it differed from both Obama and Bush.
To buttress his point, Winston cited exit poll data showing that 45 percent of the electorate described the economy as “not so good,” a segment of the voting public that should have been a prime Republican target. Obama, in point of fact, carried these voters by 13 points, 55-42.
One thing appears clear for both political parties as the next presidential election looms – an election in which candidates on both sides will be running without the advantage of incumbency and facing extended primary battles: the general election candidate with better access to microtargeting and other quantitative research on the day he or she grasps the nomination will have a core advantage.
While the D.N.C. and R.N.C. are the institutions designed to direct research like this, to conduct voter mobilization, to spearhead fund-raising, and to act as broker between competing primary candidates, campaign reform prohibiting party committees from accepting contributions in excess of $32,400 clearly poses an impediment. In the coming years, therefore, candidate-oriented super PACs, which can accept unlimited contributions, are likely to take over much of what the two political parties have done in the past.
“The campaign finance system you see right now is the result of the Bipartisan Campaign Reform Act, the McCain-Feingold bill” of 2002, said Charlie Spies, co-founder and treasurer of Romney’s super PAC, Restore Our Future,” appearing at a different postelection panel at the Institute of Politics on Feb. 28. “It totally changed the prioritization of where money was put in the political world.”
Before McCain-Feingold, Spies said, “you used to be able to have unlimited money going to the parties. So you had parties acting as moderating forces on elections and consolidating resources for the candidates.” The McCain-Feingold ban on soft money contributions “was terrible for the political system, it would push money to outside groups; it was strangling the money going to political parties.”
The Supreme Court’s decision in Citizens United, Spies noted, calmed the fears of big donors worried about possible legal challenges if they made large contributions to outside groups: “Citizens United established a legal precedent” and donors were able to say, “Heck, the Supreme Court is telling us this is O.K. and the Federal Election Commission put out rules on exactly how you could do it.”
The one-two combination punch of McCain-Feingold and Citizens United is working to constrict the fund-raising abilities of the political parties. The next step for savvy presidential candidates with strong appeal to the community of big donors will be the very early creation of candidate-oriented super PACs with the specific goal of raising huge sums to finance the sophisticated technical groundwork required for a strong general election campaign.
The ultimate effect of a major campaign reform on the parties and of a major court ruling that opened the floodgates to groups outside of traditional political channels will be to empower institutions and actors with little or no responsibility for, or accountability to, the broader public.
In other words, the unexpected result of the upheaval in campaign finance over the past decade has been that the parties exercise less control over the process, a trend that will continue. Before your heart leaps, consider what that actually means: less control by the public as a whole.