The Money Race: It’s Closer Than You Think

People seem to be fascinated by the money raised and spent by both parties in the presidential election, but they also seem to be quite misinformed — or, at least, confused — about who has the advantage and what that advantage means.

Many Republicans, for example, are telling scare stories about the Obama campaign being close to raising $1 billion. This is completely untrue. Some experts have predicted that they will eventually raise $1 billion, extrapolating from the $750 million they raised in 2008, but as of now, they are nowhere near that number:

Still, from these numbers, it looks like the Obama campaign has an incredible advantage. Don’t be fooled. That advantage will shrink quickly. The only reason the gap is so big is because Romney was competing against a half dozen other Republican candidates for money:

Now that he has the nomination, all the Republican donors will flow to Romney, which begs the question: Who are those donors?

Two characteristics distinguish Romney’s donors from Obama’s. First, they’re almost certainly richer, given the higher proportion of large contributions:

And second, they’re overwhelmingly dominated by Wall Street:

I still find it astonishing that, in the wake of the worst financial crisis since the Great Depression, the Republican party would nominate a candidate from Wall Street. But I digress.

Of course, the campaigns themselves won’t be the only spenders in this election. The parties also raise lots of money to promote their respective candidates. By that measure, it’s Romney who has the advantage:

Finally, independent groups — especially the new Super PACs — play a critical role in buying media time and airing attack ads. On this front, there’s no question that Romney is winning:

Republican-aligned groups are hitting President Barack Obama with almost $2 million in attack ads and the response so far has been silence.

The reason: Democratic groups formed to counter those charges don’t have the money to do it.

the hardest-hitting television ads will be crafted by outside groups run by advisers closely aligned with the campaigns. In this sphere, Obama and his allies are behind.

[The Republican-founded] Crossroads [GPS], which has two arms, plans to spend $250 million to influence the presidential and congressional races, it announced last year. One entity, American Crossroads, has raised $27 million, according to Federal Election Commission disclosure reports. The other, Crossroads GPS, takes unlimited donations and doesn’t reveal its contributors.

Romney has another friendly super-PAC, Restore Our Future, which was founded by his former aides. It raised nearly $43 million by the end of February, and spent $40 million on ads…

In contrast, Priorities USA set a goal of raising $100 million to defend the president during the general election. According to FEC reports, Priorities USA Action has raised just $6.5 million. When combined with Priorities USA, a partner group that doesn’t disclose donors, the total contributed to the effort was about $10 million by the end of February, according to Burton.

So, no matter what you hear, remember: It’s close, and it’s getting closer.