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Edwards Increasingly Fenced In By Federal Matching Funds
On September 27, just before announcing that his third quarter contributions had dwindled to $7.2 million, John Edwards reached out for a lifeline: federal matching funds.
The infusion of taxpayer dollars will be crucial, as Edwards campaign costs are steadily rising and his cash receipts have steadily fallen. In the three months from the start of July through the end of September, Edwards spent $8.2 million, $1 million more than he raised.
Now, as the January 3 Iowa caucuses fast approach, that federal lifeline looks more and more like a noose.
The federal subsidies comes with strings attached that require Edwards to keep state-by-state spending, as well as the total amount he spends during the primary season, within preset limits -- limits which will not apply to his rivals, Hillary Clinton and Barack Obama, who are not accepting federal subsidies and whose expenditures are therefore limited only by what they can raise privately.
Iowa is the place where federal spending limits will most severely constrain Edwards. Getting supporters to participate in caucuses is much more expensive than getting them to vote in a primary. In addition to television, caucus turnout requires mass mailings, phone banks, extensive transportation systems to get people to and from dispersed caucus locations when temperatures average 17 degrees.
The federal cap on total spending (television, offices, polling, etc.) in Iowa for Edwards is technically $3 million -- a figure that, when various exemptions and favorable rule interpretations are taken into account, can be pushed to just over $5 million, according to experts in campaign finance.
The Edwards campaign will be provided additional resources. Edwards has been endorsed by the liberal Iowa Caucus for Priorities and by a number of unions, including the Iowa State Council of the Service Employees International Union, the United Steelworkers, the United Brotherhood of Carpenters and Joiners in America, and the Iowa Postal Workers Union.
Under normal circumstances, such money and endorsements would be more than an enough for Edwards to run a credible campaign. The problem for Edwards is that 2008 is anything but normal.
Unrestricted by FEC regulations because they rejected federal subsidies, both Clinton and Obama will be throwing money at Iowa, with estimates running as high as $15 million. For all three candidates - particularly Edwards and Obama - Iowa has the potential to be the make-or-break state, determining whether or not their candidacies are viable for the long haul.
Of the top three candidates, Edwards is currently the underdog in Iowa. The average results from the five most recent polls of likely Iowa caucus goers gives Clinton a 6.4-point lead, with 30 percent; Obama averages 23.6 percent; and Edwards 19.6 percent, according to RealClearPolitics.
With so much riding on the outcome, Edwards is gearing up to bet the bank on Iowa, but his bank, by 2008 standards, is peanuts. Privately, Edwards' aides estimate that Clinton and Obama have together already outspent him in Iowa by $8 million, a margin likely to double by caucus day.
Joe Trippi, Edwards' chief strategist, told the Huffington Post, "Obama is approaching $6 million as we speak, so he could easily approach $15 million or more. Hillary will be at least $10 million. Both of these estimates could end up being low."
In these circumstances, Trippi has no choice but to remain publicly optimistic. But, he noted, "If Obama is going to spend $16 million in Iowa, there's not much we can do about it."
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November 12, 2007 09:49 AM