It is widely known that the road to the White House is paved with dollar bills. Raising money is one of the most important tasks for any candidate and often the candidate with the most money is the one elected. With the upcoming Presidential race expected between Mitt Romney and Barack Obama, the case is the same. Which candidate can raise the most money, and can he do it effectively?
No candidate can raise unlimited money from unlimited sources. There are rules in place designed to limit the influence of single donors.
- $2,500 limit per individual per candidate for Federal office. This applies to primary, runoff, and general elections separately.
- $10,000 per calendar year to state, district & local party committees
- $30,800 per calendar year to a national party committee. This applies separately to a party’s national committee, and House and Senate campaign committee.
- $5,000 per calendar year to state, district & local party committee
- $117,000 aggregate total per two-year election cycle, consisting of:
- $46,200 donation to individual candidates
- $70,800 donation to national party committees/ PACs (Political Action Committees).
- Married couples are considered different individuals, so the total amount per married couple is double these amounts
Companies are prohibited from donating to federal elections or PACs. However, many companies can set up PACs, which function as independent vehicles to raise money for a candidate, and the individuals at the organization can donate to candidates; the collective bundle of donations can create donations even beyond $500,000.
Thus far, Barack Obama has raised $172,704,222 compared to Mitt Romney’s $75,609,012. This discrepancy in funds is most likely due to the fact that there were at one time as many as nine Republican candidates vying for the Presidential nomination compared with the singular Democratic candidate towards which contributors can donate money. Obama also has the added support of the Democratic National Committee, which, since it is not part of a candidate’s campaign, does not operate under such strict limits on individual donations and can funnel maximum support towards him; this past March, Obama, with the help of the DNC, raised $53 million. Once Mitt Romney (or whoever the Republican nominee is) receives the backing of the Republic National Committee, the numbers will surely be more even.
The greatest difference between the funds raised by Romney and Obama to this point is the size of individual donations: Romney saw a majority (58%) of his funds raised by donors giving the maximum $2500, while a majority of Obama’s funds (53%) came from donors giving under $200. Obama is so successful in part by approaching individual donations in a revolutionary way, which his campaign began in 2008: instead of charging a fee to attend his speech, all Obama’s campaign required was an email address so his campaign could contact each person individually at a later date, harnessing the power of social networking to rake in large sums through small individual donations.
Mitt Romney has received over $500,000 from Goldman Sachs alone, while Obama’s largest corporate contribution came from Microsoft, with a mere $289,088. With such great discrepancy in the source of funds, it is easy to wonder if Obama’s grassroots support or Romney’s maximum-donor approach will yield the greatest results. Once Romney, if he is the eventual nominee, receives the backing of the Republican National Committee, his fundraising totals are sure to level out and compete with President Obama’s. The press has been quick to bring Romney’s campaign under fire, however, labeling such large corporate support as further proof he is out of touch with the average voter. All we know for now, though, is that Obama has thrived on the new networks of social media while Romney has excelled at securing corporate and maximum individual donations. The road to the White House is paved with dollar bills, but the question remains: the dollar bills of small individual donations, or the dollar bills of large-sum corporate contributions?
Photo Credit: Associated Press