May 20 (Bloomberg) -- The contest between President George W. Bush and Democratic Senator John Kerry may help push spending for presidential and congressional election campaigns to a record $3 billion this year.

When all campaign spending is figured in after the November election, including amounts from independent political advocacy groups, the total likely will be 25 percent more than the $2.4 billion spent in 2000, according to figures compiled by Anthony Corrado, a fellow at the Brookings Institution, a nonpartisan policy research organization in Washington.

``The sense in both parties that there's a lot at stake in this race and the sense that it's going to be a very close presidential race is driving fundraising not only for the candidates but for the party committees,'' Corrado, who studies campaign finance, said.

Both Bush, 57, and Kerry, 60, have set fund-raising benchmarks with the election more than five months away. The Bush campaign has taken in at least $203.5 million since it began raising money a year ago, according to Federal Election Commission records and campaign announcements. Kerry, a four-term Massachusetts senator, has raised at least $118.5 million.

Combined, the candidates have more than doubled the amount Bush and Vice President Al Gore, the 2000 Democratic presidential nominee, raised during their entire primary campaigns, which ended with the party conventions in August of that year.

New Law

The increase comes after Congress in 2002 outlawed unlimited donations from corporations and labor unions to political parties and doubled the amount of money an individual can contribute to a candidate to $2,000 per election.

Bush's campaign spent $30.7 million in April, bringing its total outlays to $129.8 million, according to a report it filed today with the Federal Election Commission. The campaign raised $15.6 million last month and had $71.6 million cash in-hand.

Bush's biggest corporate supporters in April were the employees of Washington Group International Inc., a Boise, Idaho- based engineering company that has won four reconstruction contracts in Iraq worth as much as to $2.5 billion, according to FEC disclosures. At least 58 employees of the company gave a combined $49,000 to Bush last month.

The employees of Morgan Stanley, who have given more to Bush than staff at any other company in the past year, were Bush's second-biggest backers in April, with 32 employees giving $29,080, according to FEC records. Morgan Stanley chief executive Philip Purcell has raised at least $200,000 for Bush.

Kerry's Numbers

Kerry's campaign, which plans to release its FEC figures later today, said in a statement that it raised $30 million in April, the second consecutive month the Democrat has out-raised Bush. The campaign had $28 million cash in hand at the end of April, according to the statement.

Kerry spent about $34 million in April, based on the cash he raised in the month and the $4 million month-to-month reduction in his cash on-hand. Since the beginning of the year, Kerry has raised $35 million on the Internet, his campaign said.

Bush and Kerry declined federal matching funds during the primary campaigns, which freed them of restrictions on raising and spending money. Bush faced no Republican opposition and Kerry defeated his eight Democratic opponents by the time of the March 16 Illinois primary.

Money Tally

At the same time, independent groups such as America Coming Together, which is advocating Bush's defeat, and Club for Growth, which backs Republican candidates, have so far raised more than $167 million. They aren't affected by the new campaign finance law.

Combined with the $170 million raised by the Democratic candidates Kerry defeated, the $441.6 million raised by the Democratic and Republican party committees and the $583.3 million raised by candidates for the U.S. House and Senate, that puts the spending on federal races on course to reach $3 billion this year, Corrado said.

The two presidential campaigns have said they will accept public money -- about $75 million each -- and spending limits for the general election campaign after the party conventions, July 26-29 for the Democrats and Aug. 30-Sept. 2 for the Republicans.

Fund-raising ``is probably surging this year due to a highly polarized electorate and you will therefore motivate a lot more voters,'' said Kent Cooper, a former FEC official who is cofounder and vice president of PoliticalMoneyLine, an Internet site that tracks campaign contributions.

`Extra Dollars'

A study by the Pew Research Center last year showed an American electorate evenly divided along party lines. Polls by the Gallup Organization and Zogby International over the past two weeks show Bush and Kerry separated by no more than 5 percentage points in voter support.

``When you get the competitive juices flowing, people are willing to kick in those extra dollars so it will be a record- breaking year of spending and you will see record numbers of people at the polls,'' Cooper said.

More than half of the additional money that the presidential candidates raised can be attributed to donations of greater than $1,000, according to the Campaign Finance Institute, a Washington- based research organization that tracks money and politics. Companies and unions long have been barred from donating to candidates.

Both campaigns also are focusing on attracting donors who give in amounts less than the $2,000 maximum. The Campaign Finance Institute found that the number of donors who gave less than $200 to a presidential candidate doubled compared with 2000.

Million Donors

``The outpouring of grassroots support we continue to receive is crucial to ensuring victory in November,'' said Ken Mehlman, manager of the Bush campaign, which landed its one- millionth donor this month. That is about three times the number of donors in 2000.

One way candidates raise funds are with ``house-parties,'' a method used by former Democratic candidate Howard Dean to break party fund-raising records last year. Kerry and Bush both tout nationwide house parties on their campaign Web sites.

Lobbyists Heather and Tony Podesta last week had 187 people show up at their Washington home to drink wine from years that Democrats occupied the White House and contribute at least $250 to Kerry. If guests reached the maximum contribution of $2,000 for a candidate, the money went to the Democratic Party.

Guests sipping wines that included a 1978 Jaboulet Crozes- Hermitage from France's Rhone Valley and a 1994 Chorey-les-Beaune Burgundy spilled out from the Podestas' patio into the alley behind their house. The event raised $64,150 with commitments for as much as $9,000 more.

``People were excited to come,'' said Heather Podesta, a lobbyist with Blank Rome Government Relations whose brother-in- law, John Podesta, was chief of staff under former President Bill Clinton, a Democrat. ``Those invited asked if they could invite others. That never happens in Washington.''

To contact the reporter on this story: Michael Forsythe in Washington mforsythe@bloomberg.net

Last Updated: May 20, 2004 17:00 EDT