JUDY WOODRUFF: We are three months away from Election Day, and the political money race is heating up. Mitt Romney's presidential campaign announced yesterday that, along with the Republican National Committee and state party efforts, it raised $101 million in the month of July.
The Republicans had nearly $186 million in the bank as of July 31. President Obama's reelection campaign said it raised more than $75 million in July but didn't disclose how much cash it has on hand.
That's the third month in a row the Romney team has outraised the president's. However, between January and June, Mr. Obama outspent his GOP rival $400 million to $131 million.
Well, to help sort through what all the numbers mean, we are joined by Rick Davis, who served as Republican John McCain's national campaign manager in 2000 and again in 2008. He is now chief operating officer at Pegasus Capital Advisors.
And Mo Elleithee, he's a partner at Hilltop Public Solutions, a D.C.-based political consulting firm. He worked on Hillary Clinton's 2008 presidential bid.
And, gentlemen, we thank you both. It's good to see both of you.
So, Mo, Mo Elleithee, let me start with you. Why is the president having a harder time this year raising money? In 2008, he raised over $750 million.
MO ELLEITHEE, democratic strategist: Yes. Well, I don't think he is having a hard time raising money. He is still raising a significant amount of money.
But there's no question that the new rules of the game, I think, are absolutely benefiting the Republicans. Yes, Mitt Romney's outraising him. And -- but when you are looking at the amount that the Obama campaign versus the Romney campaign are raising, they are both going to be very competitive.
Neither one of these guys is going to run out of money. What really stacks the deck against the president are these super PACs and all the outside money that is coming into the system and coming into the game. And that should put a little bit of fear and panic into Democrats.
JUDY WOODRUFF: Rick Davis, how fearful and panicked should the Democrats be?
RICK DAVIS, former John McCain campaign manager: Well, certainly, the tone has changed a lot from early remarks by the Obama campaign, how they were going to raise a billion dollars and be the first campaign in history to cross that huge mark.
And, certainly, I never thought that was any great shakes. I mean, Obama outraised us in 2008 by a significant margin and spent almost 3-1, and in some states 4-1, against us on television.
So, this is quite a different table. And I think that it's an indication of some problems within the Obama electorate. Raising money is some indication of your level of support out in the country. And the fact that Obama is not going to have an advantage for fundraising is the first time since 2011 that he hasn't outspent his opponent.
JUDY WOODRUFF: Mo Elleithee, what about that? Who is and who isn't giving to the Obama campaign and to the Romney campaign? Do we have a sense of the portrait of who is writing checks this year?
MO ELLEITHEE: Yes.
One area where I think I would differ slightly from Rick is -- or actually agree with him is that giving does indicate a certain amount of support. And when you look at the small grassroots donations that the Obama campaign is receiving, there's no question a vast majority -- or a significant amount of his money is coming from small donors.
The majority of his donors are people that have given $200 or less. And that can't be said about the Republican Party. And I read some astonishing figure on the way over here about how -- I think it's like 17 -- or 80-some percent of all the money that has been given in this election campaign is coming from just a very, very, very small group of people. That says a lot about the shifting paradigm of campaign fundraising.
JUDY WOODRUFF: And, Rick Davis, it is a fact that we do hear a lot about these fat cats, to use the term, millionaires, billionaires, who are giving money to both campaigns. Governor Romney does seem to be benefiting from those big checks going to the super PACs, doesn't he?
RICK DAVIS: Well, setting super PACs aside, basically aligning the two campaigns' fundraising, the thing you have to remember is Barack Obama has raised more fat cat money per capita than Mitt Romney has. Barack Obama raised more money than Mitt Romney has.
And so you can make a lot of comparisons, but when you look at how many fat cats have donated to any one campaign, Barack Obama owns that title. And the fact that you have outside spending is not something new. It's been happening really over the last 20 years. And the facts are that Barack Obama in 2008 had an opportunity to fall under the campaign finance rules.
He actually had an agreement with John McCain to do so and then broke his agreement when he realized, oh, I can raise more money this time than I ever thought wildly possible. So, if anybody has undermined the campaign finance system more than any other individual, it's probably Barack Obama.
So it's kind of funny now that he would start complaining about it. My sense is he probably protests too much.
JUDY WOODRUFF: You want to respond to that now?
MO ELLEITHEE: Yes. Yes, there's been outside spending for 20-some years, but never at this level.
Never -- the Citizens United court case just completely scrambled the playing field. It changed the dynamic completely. And there's no question that's benefiting the Republicans in this election.
JUDY WOODRUFF: The other thing I want to ask both of you about, Mo Elleithee, is the fact that the Obama campaign is, to coin a term, burning through the money that it has at a lot -- at a much higher rate than the Romney camp, $400 million in the first half of the year vs. $130 million.
What are they spending that money on?
MO ELLEITHEE: Well, I think on two things primary, one, message and, two, organization. Organization, they -- they made early investments in the key battleground states to put organizers on the ground, set up field offices.
I think by the time Mitt Romney had opened up his first office in Virginia, for example, Barack Obama already had 13 offices and dozens of organizers on the ground. That is going to matter in the long-run. And then, secondly, on early ads, helping to define himself, as well as his opponent. And that is important.
JUDY WOODRUFF: Rick Davis, how do you see the decision by the Obama campaign to spend a lot more money faster than the Romney camp?
RICK DAVIS: Yes, look it, it just depends which state and what they are getting for it.
I mean, you talk about Virginia and the number of offices he has there. I have heard as many as 40 in the state of North Carolina. Now, knowing what has been happening in North Carolina over the last six months to a year, I'm not sure I would have invested in 40 different offices in North Carolina. Even though Barack Obama won that state, you have got to question whether or not it's winnable for him now.
So, these states change. There are a dozen states that are probably in play right now. And I would say that you have to be very careful about sinking a lot of heavy-duty cash into the ground in a lot of states that may not be competitive to you a month from now.
JUDY WOODRUFF: Let me get a sense from both of you how much difference you think money makes ultimately. Clearly, having a lot of television ads on the air, you're reaching a lot of people. But, ultimately, in a campaign like this, is that going to be what makes the difference?
MO ELLEITHEE: Well, it's going to matter. You don't want to be outspent over -- you don't want to be overwhelmed by the other side.
I think that is one of the reasons why you see the Obama campaign aggressively courting their small donors, to say, hey, we need you to pony up right now, because when you factor in these super PACs, we run the risk of being the first incumbent president ever to be outraised.
The ads do matter. But, also, I do think the organization on the ground is going to matter. And so the money is what builds both of those things. Without it, you can really, really struggle. And I don't think the president is going to be in a position where he is really struggling on either -- on either side. But he does run the risk of being drowned out.
JUDY WOODRUFF: How do you see that, Rick Davis? How determinative is the amount of money?
RICK DAVIS: Well, I do think there is an issue with Barack Obama being the first sitting president who gets outspent.
I think it's indicative of the fact that people are unhappy with his presidency. And I think that there will be a lot of campaign spending. And, certainly, nobody should want to be outspent as badly as we were in 2008.
But the bottom line is I think the real issue for Barack Obama's reelection is whether or not he has got an economy that he can pitch to people as exactly what they want four more years of.
And I don't think all the ad spending in the country is going to make a difference if people are unhappy with the economy, and it's the economy that Barack Obama gave them.
JUDY WOODRUFF: Message heard from both of you.
One thing we know for sure, both candidates are going to continue to raise money, I guess, as much as they can between now and Election Day.
MO ELLEITHEE: Yes, they will.
JUDY WOODRUFF: Rick Davis, Mo Elleithee, thank you both.
MO ELLEITHEE: Thank you.
RICK DAVIS: Thank you.