By Moira Herbst
Spending on the 2008 election cycle has reached a historic high. Total funds raised at the federal level are on track to reach $5.3 billion dollars this season—a 27% increase over 2004, says the Center For Responsive Politics (CRP), which runs the Web site OpenSecrets.org. So far, spending since January 2007 has reached $4.5 billion. The figures, released on Oct. 22, include all activity at the federal level, including public funding and donations, the cost of political conventions, and advertising.
That’s a lot of cash. For some perspective, the GDP of Belize is $1.2 billion. But on the other hand, consider that U.S. consumers spend about $17 billion on Valentine’s Day merchandise and celebrations each year, and $8.7 billion on the Super Bowl. Makes the election cycle look like a bargain.
Here are some other notable elements about 2008 spending:
1. Democrats take the lead. Democrats have gotten 59% of total 2008 contributions at the federal level. Four years ago the parties were evenly split. Why the shift? The Democrats have consolidated leads in the presidential race and key Congressional races. And “money follows power,” says CRP executive director Sheila Krumholz.
2. Small donors are having a big impact. Another reason Democrats have the funding advantage is that small donors have flooded money into the Obama campaign. The CRP says that 50% of Obama’s money comes from small donors who contribute less than $200, compared with 37% to McCain’s. Krumholz credits a more skillful online fundraising operation for Obama. She says the rise of small donors is “healthy for democracy” because it offsets the financial dominance —and potentially the influence — of large institutions and lobbying groups.
3. Big business spends the most. Donors affiliated with business account for 72% of total federal funds raised in 2008. The remaining 28% comes from “ideological and labor” groups, says the CRP. Leading the list were donors affiliated with Goldman Sachs, who donated at least $5 million, followed by $4.2 million for Citigroup and $4.1 million for JP Morgan-Chase. “On Wall Street, there’s no sign of a recession in political giving,” says Krumholz.
After the election, the CRP will analyze whether raising more funds raises a candidate’s chances of winning. “If history is any guide, money will do quite well on Nov. 4,” says Massie Ritsch of CRP.