The packed field of Democratic presidential hopefuls are barrelling toward the primaries and most of them have a cash problem.
Third quarter filings from the Federal Election Commission show more than half of the Democratic candidates burned through more money than they brought in, handicapping their ability to do the heavy spending necessary to make their mark in early voting states.
Most notable is former Vice President Joe Biden, who spent nearly $2 million more than he raised. Of the top five Democratic candidates, Biden had the least amount of money left with about $9 million heading into October–that’s compared with the $10.8 million he had on hand at the end of the second quarter.
Other candidates are also cash strapped. Minnesota Sen. Amy Klobuchar, for example, raised $4.8 million and spent about $7.8 million from July 1 to Sept. 30, 2019. In an email to supporters Monday, former Housing and Urban Development Secretary Julián Castro said he is in “dire need” of $800,000, or risks ending his campaign. Castro’s plea mirrors New Jersey Sen. Cory Booker’s successful call to raise $1.7 million before the Sept. 30 quarter deadline.
By contrast, Vermont Sen. Bernie Sanders ended the third quarter with $33.7 cash on hand, Massachusetts Sen. Elizabeth Warren had $25.7 million and South Bend, Indiana Mayor Pete Buttigieg had $23.4 million.
Money is always important for a presidential campaign, but in Iowa, it could be the key. Unlike a primary where voters wait to cast an individual ballot and leave, the Iowa caucuses require people to give up hours of their time at meetings around the state. They also have to work to convince others to choose their preferred candidate.
“You’ve got to have millions in order to organize Iowa effectively,” Michael Toner, a former chairman of the Federal Election Commission, told PBS NewsHour. “No candidate is going to win a presidential primary just because they’re a terrific fundraiser. But you certainly can lose one if you don’t have sufficient resources.”
Motivating supporters to caucus for a candidate requires a lot of organizing and advertising spending dollars.
To prepare, the Biden campaign said it would increase its staff in Iowa from 75 to 110 by the end of September. That growth will be crucial for him. The former vice president entered the race with the greatest name recognition, but has struggled to develop a grassroots base that can compete with his rivals, Mary Anne Marsh, a Democratic strategist, told NewsHour.
Warren and Sanders both have very strong ground games in Iowa. Buttigeg has also been focused on Iowa — an effort that may be showing in the polls. An Iowa poll released by Suffolk University and USA Today on Monday shows Buttigieg in third place with 13 percent. He’s behind Biden who’s at 18 percent and Warren, who is in second place with 17 percent.
By focusing on small-donor funds, Warren and Sanders took a gamble that is paying off, Marsh added. About 60 percent of Warren and Sanders’ Q3 contributions came from donations of $200 or less, according to FEC reports. Biden’s reports, however, show the opposite with only about 30 percent of Q3 contributions coming from small donations. The challenge for Biden is that big donors tap out quickly due to campaign finance restrictions meant to reduce the influence of wealthy individuals on politics. Small donors can give repeatedly, which reflects how a candidate and their message resonates with voters, Toner said.
“When you are raising tens of millions of dollars in $50, $100, $10, $5 increments, you are connecting in a powerful way with people,” Toner said.
For the more progressive candidates, their positions on health care, student loans and income inequality have helped them gain a loyal following among younger voters. Reps. Alexandria Ocasio-Cortez and Ilhan Omar endorsed Sanders last week, potentially drawing in more young progressives.
Biden still holds certain advantages. The ability to beat President Donald Trump has emerged as a top priority for Democratic voters desperate to push out the president in 2020. Many see Biden as the best choice to do that, particularly some voters in key groups like African Americans.
Biden hopes to do well with black voters in the South Carolina primary, nearly three weeks after Iowa. The later contest offers some hope for the former vice president amid his cash crunch.
“I’m not as worried as others about it because I believe money doesn’t always equal momentum,” said Antjuan Seawright, a South Carolina-based strategist. “I think the key for Biden is to spend low until you get to South Carolina, and then really rev up the engine.”
But with heightened attention on Iowa, banking on South Carolina could prove too risky a bet. If Biden fails to do well in the first contests, it could sap energy from his supporters and stifle the argument that he is best positioned to beat Trump.