The 2012 election is, in many ways, shaping up to be a contest defined by financial disparity. The rhetoric of the Occupy Wall Street movement, predicated on the idea of an existential struggle between the 99% and the 1%, has been embraced by the left and denounced by the right, who see it as harmfully divisive. President Obama has constructed his re-election platform around “fair share” policies, which would shift a larger burden of societal costs to the wealthy, while Paul Ryan, the Republicans’ leading policy thinker, has sounded the alarm on deficits and called for a scaling back of the social safety net. Mitt Romney’s presidential campaign has often sparked discussion of personal wealth— the candidate’s own and that of his primary coalition, which is richer and better educated than his GOP rivals’. And long before any votes are cast in November’s general election, this financial gap has manifested in the donation habits of each party.
Obama is having difficulty attracting the kinds of large checks that buoyed his candidacy in 2008 and that usually sustain an incumbent President’s fund-raising efforts. As the Washington Post reported on Sunday, Obama has received fewer than half the number of donations exceeding $2,000 that he had at this point last cycle, and less than a fourth of the number George W. Bush had secured by this time in 2004. The super PACs supporting him are having little luck scaring up the kinds of six- and seven-figure donations fueling the GOP primary. Still, Obama has excelled at attracting smaller gifts—1.4 million donors are already on the books and his operation is engineered to keep them giving. With $137 million raised for his campaign as of Jan. 31, nearly half of which came from small donors, and $75 million still unspent, Obama has a significant money lead on his Republican foes. But the trickle of large donations has Democratic fundraisers worrying whether it will last.
Romney, meanwhile, is seeing the other side of the coin. The Republican front-runner already has received more $2,000+ donations than the incumbent, and has the support of a super PAC flush with enormous gifts. But of the $63 million Romney had raised by the end of January, just one dollar in ten came from donors who gave $200 or less. Large donations might sound better, but they—or more precisely the people who give them—have limitations. Because federal election law caps individual donations at $2,500 a year for a candidate, there’s a risk that Romney could exhaust his cohort of big givers, leaving him with nowhere to turn. Someone who gives $50 may be persuaded to do so again; someone who’s already given the maximum cannot. Large donations have their perks, as well—the annual limit for individual contributions to a political party is a much higher $30,800, and there’s no ceiling at all for outside spending groups like super PACs that fall under the 501(c) section of IRS code. But Romney’s campaign will need to fix its small-donor problem to keep pace in the long run.
The consequences of this party donation gap are already apparent in the race. Obama and his team have retrenched, unwilling to open DNC coffers to Democratic congressional candidates, while the President shakes the biggest trees he can find for cash. On Friday, he attended five fundraisers in Chicago and Atlanta, which ranged from $2,500 to $35,800 a head. Romney has tacked a line on the end of his stump speech begging for five or 10 bucks here or there, and his campaign is raffling off lunches with the candidate, an Obama for America staple, to try to attract the small-dollar crowd. While Team Obama schemes ways it can further squeeze the grassroots, Romney is slicing through his primary opponents with super PAC ads funded by Republican mega-donors. But the donation gap shows something more than just tactical fine-tuning.
For Obama, it’s a quantifiable expression of rich-guy unease about the President, which didn’t exist in 2008. Hollywood Boulevard is still Democratic territory, but Wall Street, especially the hedge fund offices, is not. They are typically access donors, not ideologues, who are more likely to back the guy in office or the one they think is most likely to win. But whether it’s his talk of higher taxes, the Dodd-Frank financial regulation law or, as Alec MacGillis writes in The New Republic, something more psychological, many Wall Streeters have swung from meritocratic admiration of Obama to powerful aversion, and their dollars are going elsewhere.
As for Romney, the donation gap lays bare the pitfalls of running as a Republican heir apparent with a vast personal fortune. He’s not the kind of candidate to stir the passions of his party’s base, but neither was John McCain, who nonetheless was raising about a fifth of his funds from small donors by this point in 2008. Romney’s candidacy relies on showing strength: both in general election matchups and in the delegate math, but it’s not a message that screams “I need your help” to the rank-and-file Republican. His repeated wealth gaffes have only made things worse. McCain was no pauper—you remember the house-count fiasco—but Romney is considerably richer: He put $45 million of his own money into his candidacy last time around. With constant reminders of his net worth emanating from his own mouth, among others’, no one can forget that Romney could bail himself out without that $5 contribution.