05/31/2008 05:12 am ET Updated May 25, 2011

General Election Fundraising: GOP More Competitive Than Expected, FEC Records Show

Barack Obama has been hailed this election season for, among other things, his impressive fundraising apparatus. But while the Democratic frontrunner's financial edge over Republican rival John McCain has become an assumption in most reporting, the cash advantage is not reflected in the recent FEC filing reports.

In reality, despite all the reports of an energized party, Democrats are behind Republicans this year in cash on hand, and they hold only a negligible lead in funds raised over the past month. And while Obama himself raised significantly more cash than John McCain, the difference is more than made up for by the fundraising of the Republican National Committee.

According to FEC reports from the month of April, Barack Obama raised $31 million and ended the month with $37 million cash on hand. By contrast, McCain ended April with $16 million raised and $22 million cash on hand.

However, the Republican National Committee holds ten-fold that of their Democratic counterpart, with $40.1 million in the bank and $15.7 million raised in the month of April; the DNC's numbers are $4.4 million and $4.7 million, respectively. The combined amounts put the Democratic fundraising for April above the Republicans by only $2 million, while Republicans have almost $22 million more in the bank.

This past April, McCain signed an agreement with the Republican National Committee that would allow him to raise significantly more funds from individual donors. The deal would direct the first $2300 of a donation to McCain's campaign, and then direct up to $67,700 to the RNC itself, as well as campaign funds targeted at four crucial swing states. The deal was initially met with scrutiny by campaign finance reform organizations, who complain that McCain is violating the spirit of the law that he helped to create. Nevertheless, the deal has gone forward, and recently both Obama and Clinton reached a similar agreement with the DNC.

The deal makes the fundraising efforts of the national committees particularly important this year. Despite the fundraising success in nearly every other venue, the DNC has been consistently out-raised by the RNC over the past several months. This has been compounded by DNC chairman Howard Dean's investment in a '50-state strategy' meant to lay the foundation for Democratic victories in traditionally Republican communities. While the investment may be paying off -- Democratic special election wins in conservative districts maybe be a signal -- the strategy has left the national committee with fewer funds than Republicans.

It is too early to determine whether or not Democrats will be able to claim a significant money advantage this election, as they are widely expected to do. On the one hand, contributions to Obama are likely to increase once he becomes the official nominee, and his deal with the DNC will allow him to take larger contributions for big donors even while tapping into the vast support of small donors that has powered his campaign.

On the other hand, the fundraising success of the RNC this year suggests Republicans may be able to keep their candidate competitive, particularly if and when President Bush begins to earnestly raise funds for McCain (despite his national unpopularity, the president is still an adept and powerful fundraiser). And if John McCain accepts pubic financing as expected, he would receive $85 million while still allowing his supporters to funnel money directly to the RNC. One thing this early FEC report does suggest, the Democrats are going to have to continue to energize the donors who have supported the long primary battle in order to remain financially competitive.