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By Sam Youngman
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Posted: 07/03/07 09:58 AM [ET] |
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Sen. John McCain’s (R-Ariz.) presidential campaign is in dire straits, announcing yesterday that it has only $2 million in cash and that a number of staffers are being laid off as part of a significant campaign restructuring.
Perhaps most painfully, McCain’s campaign said it is “seriously considering” accepting matching public funds, an admission that can be seen as embarrassing in the wake of weekend announcements from Democratic campaigns that they again are shattering fundraising records.
After McCain’s lackluster first-quarter reports sparked chatter that the senator had fallen from front-runner status, campaign officials promised marked improvement for the second quarter. They shook up the finance team, cut consultants and their fees and put more fundraisers on the schedule. But as they were forced to concede yesterday, improvement was not only elusive, but the senator’s campaign failed even to match the paltry mark that forced those changes.
Sens. Barack Obama (D-Ill.) and Hillary Rodham Clinton (D-N.Y.) have attracted attention throughout the season with huge hauls, but McCain’s apparent financial and political demise is equally shocking.
“Incorrect assumptions,” unpopular political stances and a tough fundraising environment were responsible for McCain’s second-quarter total of $11.2 million, his senior advisers told reporters yesterday.
The campaign’s $2 million cash on hand is $3 million less than what it reported at the end of the first quarter, when the campaign reshuffled its finance staff.
That shake-up apparently was insufficient, and the campaign said yesterday it will reduce its staff significantly, cut the salaries of senior staff and campaign manager Terry Nelson will go off the payroll and work on a volunteer basis for the “next few months.” The campaign will lose up to 100 jobs, according to the Associated Press.
“We confronted reality, and we’ve dealt with it the best we could,” Nelson said, adding that the campaign would have the resources necessary to win the early states and the Republican nomination. “We feel good about the decisions we made today. The decisions we made today were not easy. They were tough decisions.”
Nelson said during a conference call that the campaign incorrectly assumed it would be able to raise $100 million. Thus far, it has raised $24 million, and with what can be seen as a high burn rate, the campaign only has $2 million in cash.
The campaign declined to state its new target for the year.
Nelson and senior adviser John Weaver acknowledged that McCain’s role as the perceived leader on the recently defeated immigration bill cost him on the fundraising front.
Weaver said it was impossible to “quantify” how much the immigration battle cost the senator’s campaign, “but we do know it had a significant impact in the last quarter,” Weaver said.
“Having said that, that debate is now over,” Weaver said.
The campaign’s admission that it is “seriously considering” accepting public matching funds further hints at how grim it considers the situation.
McCain’s advisers said they have calculated that right now they would be eligible to receive about $6 million in matching funds.
But federal spending limits on matching funds are estimated to be about $50 million next year. McCain’s campaign already has spent more than $22 million, so if the senator were to win the nomination, he would be forced to run on a shoestring budget of about $28 million between now and the nominating conventions late next summer — $3 million less in primary money than Obama raised this quarter alone.
McCain’s advisers said they remain confident the senator will win the nomination, and that they will focus his campaigning almost entirely in the early-voting states. They said the campaign would “downsize” its operation and tactics “while keeping them effective.”
McCain raised about $13.6 million in the first quarter, falling behind the attention-grabbing first-quarter haul of rival and former Massachusetts Gov. Mitt Romney and a respectable first-quarter showing from former New York City Mayor Rudy Giuliani.
Romney raised $21 million in the first part of the year, but he said last week he is expecting a drop-off this quarter.
Giuliani raised $14.7 million in the first quarter, but reported a total of more than $16 million in receipts and more than $18 million for the cycle. The former mayor’s campaign reported almost $12 million cash on hand.
Perhaps most striking is the divide between Republican and Democratic fundraising totals so far this year.
Obama caused pundits’ heads to spin Sunday when his campaign announced it had raised $32.5 million, $31 million of which can be used for the primaries.
Clinton is expected to report about $27 million for the quarter with $21 million available for the primaries.
Former Sen. John Edwards (D-N.C.) and New Mexico Gov. Bill Richardson (D) have reported raising $9 million and $7.2 million respectively.
And Sen. Chris Dodd (D-Conn.), who has struggled to gain traction in most polls, has more than three times the amount of cash on hand as McCain, with $6.5 million.
At the end of the second quarter in 2003, current chairman of the Democratic National Committee and former Vermont Gov. Howard Dean was the big money winner, reporting about $7.6 million in receipts for the quarter and $6.4 million cash on hand. |
