The Other McCain

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Campaign Cash Shows Unsustainable ‘Burn Rate’ for Romney and Gingrich

Posted on | February 21, 2012 | 21 Comments

Why is Rick Santorum surging in national polls and leading in key primary states? A big part of the explanation is that, during the long months when he campaigned relentlessly despite low poll numbers and a lack of major media attention, Santorum’s operation developed a resourcefulness that his rivals don’t have.

Necessity is the mother of invention, and the low-budget Santorum campaign — which kept going throughout 2011 on a mere $2.2 million — was required to find ways to build a successful grassroots organization without the big money other Republican candidates were collecting.

Now that he is starting to look like a winner, serious money is coming in. My estimate is that the Santorum campaign got more than $5 million in the week following his Feb. 7 “trifecta” wins in Missouri, Minnesota and Colorado. The thrifty habits of the Santorum operation enable them to extract maximum value from their contributions, and an ABC News report about the GOP campaign finance report for January highlights Santorum’s advantage:

Rick Santorum for President
Raised: $4.51 million
Spent: $3.32 million
Cash on hand Jan. 1: $279k
Cash on hand Jan. 31: $1.47 million
Debts/obligations: $0

Romney for President Inc.
Raised: $6.54 million
Spent: $18.78 million
Cash on hand Jan. 1: $19.92 million
Cash on hand Jan. 31: $7.68 million
Debts/obligations: $0

Newt 2012
Raised: $5.59 million
Spent: $5.91 million
Cash on hand Jan. 1: $2.11 million
Cash on hand Jan. 31: $1.79 million
Debts/obligations: $1.73 million

In January, Gingrich spent everything he raised, and more, and finished the month with debts nearly equal to his cash-on-hand figure. Newt’s campaign was essentially broke after the Florida primary Jan. 31.

Meanwhile, Romney’s campaign had a negative “burn rate” — they spent more than they took in — to the tune of $12 million. And as Allahpundit noted in an item I linked in the headlines, for Romney to report a mere $7.7 cash-on-hand total as of Jan. 31 is very bad news for Team Mitt.

Ask your seventh-grader to do this math problem: If your spending exceeds your income by a margin of $12 million a month, how many days will $7.7 million last?

If the only way Romney wins primaries is when he can bury his opponents in an overwhelming avalanche of attack ads, his ability to win primaries may be nearly exhausted.

Of course, the pro-Romney “super PAC” entered February with a fat $16.3 million in the bank, but even his super PAC had a negative “burn rate,” spending more than twice as much in January ($13.9 million) as they collected in contributions ($6.6 million).

What does this mean? Right now, the Romney campaign is trying to hold on in his home state of Michigan with another one of its customary attack-ad blitzes against Rick Santorum, but Team Mitt can’t spend the kind of money now that they spent against Gingrich in December and January. Yet even if Romney can manage to win Michigan, his campaign may be headed toward a serious financial crunch before the “Super Tuesday” primaries in March.

Thus, when you look at the campaign cash numbers, the chatter about Romney’s “electability” is much less plausible, Sheldon Adelson’s big bets on Gingrich look like wasted money, and the fact that Santorum is gaining new “super-PAC” donors may be far more significant than it appears. Despite everything, Romney may yet prevail, but as we enter February’s final week — on the eve of Wednesday’s debate in Arizona — he certainly is no longer “inevitable.”


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  • ReaganiteRepublican

    Adelson: ‘I might give $10 million or $100 million to Gingrich’ 

  • Finrod Felagund

    Gingrich has more hope than Romney, since even though his campaign is down right now, he’s still holding even financially.  One big success and donors will return.  Romney however will need to decide soon if he’s going to seriously tap into his own bank account to keep his campaign rolling.

  • Quartermaster

    I’m not willing to say Mittens is doomed. I hope he is, but I’m not willing to overestimate the smarts of the GOP electorate. Frankly, were I Mittens, when I had to go into debt and dip into my own money to keep going is when I would pull out.

  • Steve in TN

    Frankly, I’m going to have to “hold my nose” to vote for any of the three, so I don’t really care from here out which one gets the nomination.  Burning through cash, doomed or not, what’s the point?

    Only Gingrich sounds a few Tea Party – Rebel notes that perk my interest, but he has loads of other baggage.


  • ThePaganTemple

    That might be true of Gingrich, but Romney is like one of these companies that dump goods at a loss in order to force smaller competitors out of business. Though this too is only true to a point.

  • Bob Belvedere

    Matt Drudge is trying to create more problems for Rick Santorum [again]: Satan, Laughing, Spreads His Wings.

  • Adjoran

    Romney was never “inevitable,” just the frontrunner in the early polls and fundraising.  Santorum can solidify his position as the Not Romney candidate, deal Romney a hard blow, and drive a stake through the heart of Gingrich’s hopes with a win in Michigan.

    Unfortunately for him, the expectations game may have trapped him.  If the news of his poll leads in Michigan hadn’t been so widely trumpeted, he might have stayed under the national radar there, and a win would have been a big surprise and big boost to his campaign, while even a respectable second would keep the momentum going.  Now, finishing second won’t help him very much.

    He should probably avoid the temptation to watch the tightening Arizona polls and try to snatch that state, too.  If he did it, Romney would be mortally wounded, but it is a huge risk to divert resources and possibly lose both because of it.

  • Adjoran

    As far as the “burn rate” goes, Gingrich has always had this problem.  Much more of his money is spent on luxury for the candidate and his entourage, and less on organizational necessities.  But then, he was a lousy manager as Speaker, too.

    Romney’s “burn rate” comes from a single expenditure:  the ad war in Florida.   They had to take down Gingrich – who, you may remember, was soaring to double-digit leads of his own four weeks ago, both nationally and in Florida.  If Gingrich had won Florida, it would be a completely different race today.

  • richard mcenroe

    Assuming he’s not indicted first…

  • richard mcenroe

    Want another reason to vote for Santorum?  He has an ACLU rating of ZERO.

  • ThePaganTemple

     I saw something on Twitter about him burning Bibles but haven’t looked at the link yet.

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  • richard mcenroe

    Yes, the dang religious fanatic mentioned Satan to a bunch of Xtian theology students.  I’m gobsmacked, I tellz yez…

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