Government and Politics


The first billion dollar US election

The first billion-dollar US election

Clodagh Harrington

Democrat politician Jesse Unruh once stated that 'money is the mother's milk of politics'. Democracy in the USA does not come cheap, and the 2008 presidential election was the costliest by far. The price tag, in excess of $1bn, works out at about $8 per vote. Clodagh Harrington reviews the role of money in the 2008 presidential election.

Campaign money comes from a variety of sources: small individual contributions, political action committees (PACs) and, probably of least significance, campaign funds from the candidate's own political party. An unusual aspect of the 2004 election was that Democrat John Kerry managed to raise almost as much cash as his Republican rival, George W. Bush. Traditionally, Republican candidates raise and spend greater amounts than their Democrat counterparts. Historically, Republicans tend to have a smaller donor base contributing large sums of money, and the Democrats the opposite.

The 2008 election continued both of these trends, becoming the most cash-saturated to date. In both elections, President Bush's growing unpopularity resulted in increased financial contributions to Democrats. Another unusual aspect of 2008 was that no incumbent ran. Therefore, with a couple of notable exceptions, Hillary Clinton and Rudy Giuliani, the frontrunners for the nominations did not have the luxury of instant brand-recognition by the public.

In 2002, the Bipartisan Campaign Reform Act, known as the McCain-Feingold Act, was passed. Previous legislation, dating back to the 1970s, had introduced upper limits on the size of contributions from individuals, groups and parties to an electoral candidate. At this time, public funding of presidential campaigns was also introduced. In 1979, new legislation allowed parties to raise and spend 'soft money.' Such contributions were to be made to political parties only, rather than the candidates themselves. This resulted in a range of problems, because there were differing interpretations of what soft money should and should not be spent on.

McCain's money

John McCain's campaign fund-raising in 2008 started out quite weak and improved with time. He had two advantages as the Republican candidate. First, in marketing himself as a 'maverick,' he was in a strong position to distance himself from his unpopular predecessor. As a result, McCain succeeded in the primaries in gaining 31% of the votes of those who disapproved of Bush. His historical enmity with Bush was a comfort to his supporters and helped him to gain financial support from those who were disillusioned with the Republican Party as a whole.

However, McCain's disadvantage was that he was not one of the conservative favourites, who were Mitt Romney, Fred Thompson and Mick Huckabee. In addition, libertarian candidate Ron Paul continued to garner support and was adept at raising large amounts of cash via the internet. As the primaries drew to a close, commentators wondered how McCain would sustain his campaign against the eventual Democrat candidate. Up to that point, other Democrat and Republican contenders had raised sums between $60,000 (Alan Keyes) and $222m (Hillary Clinton). While some, such as Mitt Romney, raised over $107m and did not make the grade, at least Clinton got a reward of sorts, with a place in the cabinet as secretary of state.

By April 2008, McCain had raised $100.4m against Obama's $272.1m. McCain was doing well in the polls but, without the necessary cash, he would have enormous difficulty maintaining his place in the spotlight until November. In August 2008 alone, McCain's campaign brought in $47m. This was a direct result of the 'Palin effect'. According to the Federal Election Commission, $10m of this came in the first 2 days after McCain announced the name of his running mate. Social conservatives, who were at best ambivalent about McCain, were suddenly queuing up to donate to the Republican duo. The 'team of mavericks' provided the ticket with a crucial 'bounce', temporarily at least. McCain had opted for public campaign funding, which meant that he was limited to spending $84m as of 1 September 2008, once he made his acceptance speech as the Republican nominee.

Obama's money

In June 2008, Obama announced that he would be opting out of public campaign finance. Such a decision freed Obama from the attendant spending limits of public finance. Scholar and pundit Larry Sabato declared that public funding of presidential campaigns was dead as a result of Obama's decisions and phenomenal ability to raise cash. In future, the media will no doubt label anyone who accepts campaign funding as a 'loser.'

In August 2008, Barack Obama's campaign raised $66m. No other political candidate in US history had managed to acquire such an astonishing amount in a single month. The liberal 'blogosphere' was particularly credited with continuously promoting, discussing and lauding Obama, which resulted in increased donations to his campaign. In an effort to demonstrate that he intended to avoid 'fat-cat' funding, Obama clearly stated that he would not be accepting campaign contributions from lobbyists. However, he did accept donations from lobbyists' relatives, his campaign took advice from lobbyists and his campaign received tens of millions of dollars from lawyers.

What did the candidates spend the money on?

The Federal Election Commission ( and Open Secrets ( both track income and expenditure for each candidate and give a full breakdown of monies in and out.

Hillary Clinton's campaign started strong, in terms of image as well as fundraising. In January 2007, she launched a White House bid through her website. The fact that she used the internet, rather than a more traditional medium, was intended to demonstrate that she was planning a contemporary, technologically savvy campaign. In fact, her campaign was run in a traditional way. She was skilfully packaged as a barbecue-eating, beer-drinking, down-to-earth mom, who was not averse to shedding the occasional tear. According to the Centre for Responsive Politics, Clinton had asked individual donors for the maximum donation of $2,300 and did well, particularly in the early days. As with her competitors, the vast amounts of cash she raised were spent on administration, fundraising, contributions, media and miscellaneous expenses. For example, according to, during the primaries Clinton spent $56.2m on campaign media expenses, in comparison to McCain's $119m. In the end, neither could have hoped to rival Obama's $364m media spending. In general, candidates spent about 55% of their funds on advertisements - mostly on television, but also on the radio, internet and via direct mail. John McCain raised over $360m during his entire campaign (including the primaries) with a similar expenditure breakdown to his competitors'.

High-tech versus low-tech

McCain's campaign was low-tech from the outset, and McCain alienated many younger voters by openly admitting that he was not internet-savvy and did not know how to use email. Before long, his team realised how twentieth-century this appeared, held up in stark relief against Obama's tech-savvy methods. Once the campaign began to pour money in this direction, the media began to report McCain's increased levels of YouTube hits and improvements on his MySpace page. In addition, his campaign purchased certain search words on Google and Yahoo to direct internet traffic swiftly to his online campaign. McCain had the challenge of keeping his traditional voter base, the older white conservatives, on board, while trying to attract younger voters as well. As a result, funds had to go in different directions, because his traditional supporters tended to embrace old media formats more readily.

In November 2007, Clinton's chief campaign strategist, Mark Penn, stated that Obama's supporters 'looked like Facebook.' He meant this derisively. In fact, not only was he correct in his description but, as it turned out, Facebook's Chris Hughes left the networking site to work for the Obama campaign. As a result, the 24-year-old Hughes helped to revolutionise the site and turn it into a stunningly effective political tool. Within a short period, millions of online supporters had each made donations of under $200. Obama raised almost twice as much as McCain, ending up with a staggering $700m. His campaign attracted over 6m individual donors.

Follow the Howard Dean model

The 2004 Democratic presidential contender Howard Dean, although unsuccessful in his bid for the White House, left a significant legacy in terms of campaign technique, which Obama, in particular, adopted and adapted to enormous success. The motivation for Dean's use of the internet was twofold - to raise cash and to raise participation levels. He achieved both. A record $50m raised during the campaign was matched by an increase in voter awareness and participation. Dean was a trail-blazer in his innovative use of blogs, online-meeting tools and internet fundraising. His campaign demonstrated the potential for a perfect fusion of cutting-edge technology and traditional grass-roots get-out-the-vote style.

Applying skills

Despite being the source for persistent jibes from Sarah Palin, the skills Obama acquired during his time as a community organiser in Chicago served him well. For team Obama, its unique selling point was to be young and hip enough to use successfully such tools as Facebook. During Obama's inauguration speech, there were 4,000 status updates per minute, with a grand total of 1.5m throughout the day on 20 January 2009. Probably the most beneficial aspect of using the internet in this way was that it was such a cost-effective method of reaching vast numbers of supporters. Overall, the Obama campaign spent only about 2% of its cash on the internet, 13% on expenses and 8% on fundraising, while most of the finance was used for media campaigning.

Using the old and the new media

All modern politicians spend vast quantities of cash on television advertising, in particular on 5-minute 'infomercials'. Obama adhered to such norms, and in the run-up to 4 November, a typical television viewer in West Virginia was exposed to an average of 35 Obama adverts per week. One viewer described the experience as the televisual equivalent of being 'carpet-bombed'. Obama's 30-minute television slot, aired at peak time on seven major US networks, reached 33m viewers. McCain simply could not compete. This was unprecedented.

However, the success of the Obama campaign was not simply about raising and spending the most money. It was about using this money in extraordinary ways and, as with the case of the internet, to achieve effective ends for little cost. Not content to simply exploit the possibilities of Facebook, the team created its own social networking site,, which provided supporters with news of campaign-related events in their local areas. As a direct result, over 200,000 campaign events took place without central control from the formal campaign. In addition, followers could download Obama's stump speeches as ringtones on their mobiles phones. Doubtless the most ground-breaking use of contemporary technology as a means of attracting the notoriously hard-to-reach 'youth' vote, the Obama campaign bought in-game advertising on the Xbox 360. As vast quantities of America's youth played their game of choice, advertisements appeared for candidate Obama, along with website details.

What of the future?

The main issue to consider for future elections is whether the trend of unprecedented spending will continue. Much of the outcome depends on whether candidates will be allowed free television airtime, as is the desire of many US politicians. Without such a development, the prospect of billion-dollar-plus elections seems inevitable. However, as the New York Times stated, 'The recession has aimed its death ray at the very ethos of conspicuous consumption' ('Extravagance has its limits', New York Times, 9 March 2009). As a result, a sort of back-to-basics culture is taking over. Perhaps the recession will aim its death ray at the core of unprecedented campaign spending, too. Free airtime, combined with savvy use of the internet and grass-roots campaigning methods, could recalibrate what has become highly conspicuous, and some would say, highly undemocratic, electoral spending.

Reproduced by permission of Philip Allan Updates.