The Clinton Campaign’s Coming Cash Crunch

You don’t need a Marxist crystal ball to see that Hillary Clinton’s campaign will at some point face a cash crunch.

Yes, you read that right.

Hillary Clinton, the darling of the big donor class, of Wall Street and Corporate America, is going to have money problems.


According to the Clinton campaign’s third-quarter filings, she spent 88.7% of the $28 million she raised and in the second quarter, she spent 40% of the $47 million she raised. Her campaign spending jumped from roughly $18 million to just under $25 million during the second and third quarters (respectively) while her income fell from $47 million to $28 million which nearly doubled her Bern burn rate, or the rate at which her campaign spends income.

Yes, her campaign still has $32.0 million in cash on hand but her spending is will have to sharply increase with ad buys and hiring campaign personnel in Super Tuesday states since her campaign is depending on erecting a so-called firewall in those states to halt Bernie Sanders’ momentum from winning in early primary and caucus states Iowa and New Hampshire. Setting up a knock-out punch for Sanders on Super Tuesday is not going to be easy for Clinton since Sanders’ campaign cash on hand is not far behind at had $26.5 million and he nearly out-raised her in the third quarter.

If Clinton’s spending continues to outpace her fund-raising, she may have to take on debt to compete with Sanders’ ever-growing fund-raising prowess like in 2007-2008.

For a presumptive front-runner, taking on campaign debt would be a disaster. Doing so would create an atmosphere of fear and panic around her campaign, further depressing fund-raising and creating the potential for a negative feedback loop where donors are less and less likely to give money to a campaign whose financial woes continually deepen from just as investors become become wary of sinking money into companies whose losses and debt levels keep rising.

Rising expenses coupled with falling income is just one reason to think the Clinton campaign is going to face financial trouble at some point in the future. The other and perhaps more profound reason is the nature of her fund-raising compared to that of her principal rival, Sanders. As the Associated Press noted:

“Clinton’s campaign, in its own announcement Wednesday, said she had taken in $28 million. Most of it came from fundraisers hosted by big donors across the country. Many took place in the traditionally Democratic treasure chests of Manhattan and Hollywood. She raised at least $19 million from about 60 events where admission typically cost $2,700, the biggest donation allowed by law.

“The Sanders campaign has held just seven traditional fundraisers since launching at the end of April, said Sanders campaign spokesman Michael Briggs, compared to a total of more than 110 for Clinton over the same period.

“Hours after initially announcing a take of $24 million, Sanders’ team boosted the total by an additional roughly $2 million. The campaign said donations rolled in all day Wednesday, the result of tweets and emails imploring supporters to give before the midnight close of the fundraising period. During the final 2½ hours of the night, the campaign said, it received more than $500,000 in contributions.”

The key line in the above text is about the $2,700 legal limit which accounted for roughly 69% of the Clinton campaign’s cash in the third quarter. As the campaign drags on for the next six months, more and more Clinton donors will be maxed out not financially but legally. At the same time, Sanders’ growing army of small donors will continue to give what they can — $20 here, $40 there. That may not sound like a lot, but it is when we are talking about hundreds of thousands and millions of people! Sanders has already reached the 1 million donations mark six months into the 2016 campaign that took Barack Obama almost one year to reach.


Sure, Clinton’s big donors can get around the $2,700 legal limit by giving to her Super PACs like Correct the Record but Democrats are just not that good at raising Super PAC money and Clinton has already raised $17 million in SuperPAC money. If Clinton doubles down on Super PACs mid-way through the campaign to avoid taking on debt, she loudly and publicly reinforce the perception that she represents politics as usual — with all the dirt and groveling that implies — while Sanders will be perceived as Mr. Clean and The People’s Candidate since he raises tens of million dollars almost exclusively from small donors i.e. working people.


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