Edwards' Situation

Adam B. at Daily Kos has a very good post on what accepting public financing means for John Edwards.

I am going to try to summarize and correct where I think he is wrong.  He is a lawyer and I am not, but I still think I'm correct.

1.  The overall expenditure cap for Edwards will theoretically be a little over $42 million.  He can also spend up to 20% on top of that ($8.5 million or thereabouts) for fundraising expenses.  The definition of fundraising expenses is pretty broad, so he would certainly max that number out, giving him an effective cap of maybe $51 million.  Any money he spends on legal stuff (compliance, etc.) doesn't count at all.

2.  His Iowa maximum expenditure is theoretically going to be around $1.5 million.  However, this only counts media expenditures, mailings, overhead (rent, furnishings, utilities, phones) phone programs (telemarketing and/or robocalls), and in-state polling.  For media it only counts the percentage of the buy that will reach Iowans, for overhead it only counts 90% of expenditures, and of that remaining amount only 50% of it really counts.

To put that in equation form, it would look something like this:

(Iowa% * Media) + (90% * Overhead) + Paid Phones + Mailings + Polling <= $3 million.

That's a very low number, but then again Edwards can just ignore the rule and pay some fines later on (probably after the end of the general election, even).  Therefore any concern about the limit is misplaced, and he should have plenty of money to implement his early-state strategy.  Of course, early-state strategies rarely work.

So, while this isn't as bad as I first though, I'm still of the opinion that an Edwards nomination turns a Democratic advantage into a Republican advantage for the general election.  I would say he's still more electable than Kucinich and Gravel, but has dropped far below every one of the other five major candidates.

  • It's the $50 million overall limit, not the Iowa limit

    In the Daily Kos post you cite, the real problem is #1, the $50 million overall spending limit for the primary. Compare that funding limit to the $175 million Kerry raised for the primary.

    Joe Trippi was right during the 2004 campaign, after Dean said he would forgo public financing. You can’t rely on any campaign that accepts public funding for the primary. A nominee that accepted public financing would likely be broke for the 5 months leading into the convention.

    A Democratic candidate that does not accept public financing for the primaries will have a substantial fundraising advantage and media advantage over the Republican candidate, at least up to the convention. Why give that up and accept public financing, unless you have no choice?

    Edwards is in a bad predicament financially. This is not what he wanted to do. He had to do it to stay viable.

    • but money will flow to the DNC

      If Edwards is the nominee, I know that I will be donating as much as I can afford to the DNC.  Many others will do the same.

      Also the winner of the GOP primaries in 2008 will not be in the financial position that Bush was in last cycle–he had no opposition and was raising tons of money.

      The winner of the GOP primaries is likely to be broke, and is also likely to be unacceptable to some large group within the GOP coalition.

      I agree with you that Edwards would not be accepting public matching funds if he were raising $80 million, though.

  • Adam B is an Obama supporter

    He knows a lot about election law and finance, but I think it’s only fair to point out that he has been actively arguing for Obama and against Edwards for many months now.

    • Objective presentation of facts

      He was asked to make the post by Kos, and I thought he did a good job presenting the complicated facts of the situation.

      If you look at it objectively, it looks like the $50 million overall spending limit for the primary is a serious limitation, and the Iowa spending limit is not so severe.

      Discrediting Adam B does not change the facts.

      • what about the other candidates?

        To my knowledge Richardson, Dodd and Biden have not said they will refuse matching funds.

        Does that mean Democrats should not seriously consider them either?

        It’s a sad day when a few thousand maxed-out donors are able to dictate to the Democratic Party which candidates are worth their consideration.

        I think other groups and entities will be able to pick up the slack for our nominee, and I don’t believe the GOP nominee will be in a financial position comparable to Bush’s in 2004 either.

        • All worth serious consideration

          I have considered them seriously, and I like them all, especially Edwards. They would be great presidents. But you have to consider the financial situation, and we absolutely have to win in 2008.

          At least in Obama’s case, his $75 million did not come from a few thousand maxed-out donors. It came from 351,000 donors of all stripes, but no lobbyists or PACs.

          • I can't find the table right now

            Someone prepared a table showing how much of Obama’s money has come from donors giving $2,300. It makes up a huge chunk of the total.

            If we add to that the individuals who gave $1,000 or $1,500, I’m sure the gifts from large-dollar donors make up an overwhelming percentage of the total money raised by Obama.

            I am impressed by the total number of individual donors to Obama, but the big money he’s raised has mostly come from large-dollar donors in NY, IL and CA.

            • Even if true

              It really does not matter which states his money comes from, does it? Even if some of your accusations against Obama’s donors are true, how does that help spin Edward’s situation as anything less than precarious?

              If you really want to see the argument why Edwards made a mistake, read Kos’ post:

              • I have read that post

                I understand the argument Kos is making. However, it sounds strange coming from Mr. “crash the gates.” His bottom line is that Democrats should only consider nominating people who can raise in excess of $40 million to $50 million. I base my voting decisions on other factors as well.

                Edwards’ cash on hand is still going to be more than all the other Democratic contenders besides Hillary and Obama. If Democrats are going to discount all the others based on financial considerations alone, that is sad to me.

                • Missing the point

                  Edwards’ problem is not limited fundraising. It is the $50 million limitation he placed on his campaign, which will severely hamper him March-August, if he gets that far (now I hope he doesn’t).

                  The other Democratic candidates have not opted in for public financing, so their options are still open. They may have less money than Edwards, but if they pull off surprise victories in early states, their fundraising could take off, perhaps enough to compete in larger states AND continue to raise money after they have locked up the nomination.

                  If Biden, Dodd, or Richardson surprise us and win the nomination, they can continue to raise money after March and spend it. Edwards can’t.

                  So as far as I am concerned, Edwards shot himself in the foot with his early announcement of taking public financing. You can deny it all you want, but a lot of people considering Edwards will see this as a major negative.

                  • money will flow to the DNC

                    and other groups backing Edwards if he is the nominee.

                    The Republican nominee is likely to be broke and unacceptable to a major faction within the GOP coalitino.

                    Also, I doubt this is going to be a major factor in Democratic primary voters’ decisions. This is inside baseball stuff. Similarly, many of the arguments against Hillary or Obama that are convincing to some in the blogger set are not the same arguments that will affect large numbers of Iowa voters.

        • Sure

          But they also haven’t said they will accept them.  That is a determination to make when the time comes, and for those candidates they will almost certainly decide before the caucuses what they will do.

          • I expect they will all accept them

            In which case you are saying that only Obama and Clinton should be considered. I respectfully disagree.

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