Courtesy of Doug Short.
If the projections are accurate, there will be no escape. Even if you decide to unplug your television or cancel your cable contract from now until the morning after Election Day, there is no sanctuary from the blizzard of attack ads expected as campaign season moves forward.
A combination of money and technology, old and new, will be sure to find you where-ever you are. Junk mail and annoying “robo-calls” will be aided by internet tracking cookies, texting, and social media to deliver a candidate?s message wherever you may seclude yourself.
The 2008 presidential election cycle was the most expensive campaign waged, measured in real (inflation adjusted) or nominal dollars. Total spending across all candidates for the primaries and the general election exceeded $1.3 Billion. This was an almost 85 percent increase over 2004 spending. In part, expenditures were higher because both parties, Republican and Democrat, waged bitter, prolonged and expensive primaries to select their respective candidates.
Spending also rocketed higher because of the decision by the Obama campaign to forgo public funding during the general election. This was a watershed event not just for the election, but in the history of American politics as well. Free of the shackles imposed ? by the Federal Election Campaign Act of 1974 (FECA) ? on those candidates accepting public funds, then candidate Obama was free to spend whatever he could raise while his opponent, John McCain, was limited to $84.1 Million. And, spend with abandon he did.
Despite, or, perhaps because of, all the reporting required to the Federal Election Commission (FEC), the numbers are murky. We estimate over the roughly twelve weeks covering September to November, the Obama for America committee spent $262.7 Million to wage the general election. With a roughly three-to-one advantage in total spending, the Obama campaign could out-gun McCain for mastery of the airwaves. The barrage of commercials promoting the Obama cause in swing and battleground states evidently helped secure victory. Over the full 2008 election cycle, covering the primaries and the general election, the Obama for America committee spent in excess of $635.0 Million to win the White House.
This lesson has not been lost on President Obama?s Republican contenders. For this reason, early estimates for the total price tag for this Presidential election cycle are $2.0 Billion. This cycle?s overall cost will be determined in part by the duration of the Republican primaries. If Mitt Romney can vanquish Newt Gingrich and Rick Santorum by winning decisive victories on “Super Tuesday”, primary season may effectively be at an end. But if his opponents persevere, with leadership rotating amongst them and no one taking a decisive lead, then, the decision may go to the bitter end on June 5th when both California and New Jersey voters cast their ballots. With each week the primaries go on, the final tab grows larger.
The other variable is how much spending can be assumed by Super-PACs (political action committees) without running afoul of the law. The 2010 landmark decision by the Supreme Court (Citizens United v. FEC) expanded the ability of third-parties to raise and spend money on behalf of political candidates or specific causes. The decision did not lift all restrictions. Such third-parties, candidates, and their respective campaign committees are enjoined from coordinating efforts. What constitutes coordination? No one is certain. Two or three scandals later, perhaps, we will gain an idea of exactly what the Court was thinking.
It is said we cannot put a price on democracy. But this does not prevent us from placing a price tag on public office during each election cycle; the Presidency included. Expect further price inflation in 2012.
Notes:
Data is murky and voluminous with no one single authoritative source. The best in our opinion is OpenSecrets.org (Center for Responsive Politics) with The Campaign Finance Institute a close second. Between the two, readers will discover a number of interesting summary tabulations.
For the more adventurous there is the Federal Election Commission. What its website lacks in organization is more than offset by the voluminous quantity of filings (for recent election cycles at least) at your finger tips.
“Public Funds” are disbursements made from the Presidential Election Campaign Fund (established under FECA). We assumed public funds were spent first. Hence private funds represent the difference between total spending and public funding.
2012 expenditures are estimates based on latest Federal Election Commission filings.
(Sources: OpenSecrets.org; The Campaign Finance Institute; Federal Election Commission; AIFS estimates.)
About American Independence Financial Services, LLC
American Independence Financial Services, LLC (“AIFS”) is the investment adviser and administrator for the American Independence Funds and the NestEgg Target Date Funds. The firm is a limited liability company founded in 2004.
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