Campaign Money Chase Shakes Up 2008 Presidential Race

The first presidential "primary" ended with a big surprise -- and a hint of more to come.

By Mark Willen, Senior Political Editor, The Kiplinger Letter

April 10, 2007

The results are in, and they suggest a long, tough race for the presidential nomination in each party. This first contest wasn't about votes; it was about money -- who could raise how much, how fast. The answer was a surprise, much to the consternation of most political pundits, who long ago anointed Democratic Sen. Hillary Clinton (NY) and Republican Sen. John McCain (AZ) as clear front-runners for their parties' nominations.

The first-quarter money primary shows that there are no obvious favorites, with at least a handful of candidates in each party having enough cash to go the distance if they want to. Early and massive fund-raising by the top contenders -- at least three in each party -- will winnow the field before long. Only those in the top tier, and maybe a few late starters, will last as long as the first caucus and primaries in January. But enough candidates will be left standing to keep the race going.

Among the key results:

Democrats are energized and determined to retake the White House. While first-quarter fund-raising in both parties shattered records, Democrats far outpaced Republicans, a change from recent presidential contests. Together, Democrats raised about $80 million, compared with $50 million for the GOP candidates.

Barack Obama is for real. The Illinois senator's $25-million take puts him just a hair behind Clinton, and he's likely to do well in the second quarter, too. Many potential supporters held back to see if he was more than a flash in the pan, and clearly he is. What's more, his support is broad. He had twice as many donors as Clinton, most of whom made small contributions over the Internet. He can go back to them again and again because they're nowhere near the donation limit. The strong showing gives him the time he needs to flesh out his campaign rhetoric with detailed proposals about what an Obama administration would do. He won't be able to move up in the polls if he doesn't.

Clinton's nomination is far from inevitable, as we've said before. She had hoped that her record-setting war chest would discourage other contenders, but that's not the case. Plus she remains a polarizing figure with high negative ratings from some groups. And she still has to overcome her difficulty in dealing with criticism of her vote to authorize the war in Iraq.

Former Sen. John Edwards of North Carolina is very much in the game. His third-place showing of $14 million is twice what he raised in 2003, and he's the favorite of the unions. His wife, Elizabeth, is turning into a strong campaign asset who can stir crowds in discussing her cancer diagnosis. Still, Edwards needs a strong second-quarter fund-raising effort to move up from third place.

Bill Richardson is hanging in. The New Mexico governor with a well-rounded résumé scored better than expected, raising $6 million. His challenge will be to avoid being typecast early as a potential vice presidential candidate. That will be tough.

On the GOP side, Mitt Romney scored a big upset, taking in $21 million and leading the field by a solid margin. Though he's still in third place in the polls, the strong fund-raising will attract media attention and help his name recognition. Romney has an experienced campaign organization in place and is ready for the big early primary states, such as California and Florida. Concern in some circles over his Mormon faith and how it might affect him as president is still an issue, but his polished response to questions on his faith is helping.

Rudolph Giuliani can rake it in. The former New York City mayor showed up skeptics who said he would have limited appeal outside New York and would turn off social conservatives with his multiple marriages. He raised most of the first-quarter's $17 million after a big ramp-up in his campaign. His next step is taking his show southward into the GOP heartland, where he remains less known. Look for a lot of media stories about his term as mayor before the 2001 terrorist attacks. So far, Giuliani has had a good ride with the press, but that could change.

John McCain is tied to Iraq. We've said before that McCain would never be a shoo-in, despite his commanding lead in early polling. Those polls are now history, with Giuliani well ahead. McCain's surprisingly anemic first-quarter haul of $12.5 million led to a shake-up in his fund-raising staff. But McCain's political fate is tied more to what happens in Iraq. If there is good progress through the summer and into the fall, his star will shine. But he'll go down hard if President Bush's surge strategy, which McCain pushed, doesn't work.

Other presidential contenders, including Sen. Joseph Biden (D-DE), Sen. Chris Dodd (D-CT), Rep. Duncan Hunter (R-CA) and Sen. Sam Brownback (R-KN), will have trouble staying alive.

Late entrants will have little time to build momentum later. To be a real contender, a candidate will need to have raised between $80 million and $100 million by the end of the year.

Still, some as yet undeclared candidates could be in play, especially on the GOP side, where conservatives continue to hunt for a more acceptable candidate. Two Republicans who could possibly do it are former Republican Sen. Fred Thompson of Tennessee, who's well known from his television and movie acting, and former House Speaker Newt Gingrich of Georgia.

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