2008 race already costs big bucks

WASHINGTON – Mitt Romney is buying $800,000 in television air time. Candidates are purchasing voter lists in the early states – $100,000 for the Iowa Democratic Party’s list and $60,000 for the South Carolina version. And the entire presidential field is buying jet fuel by the planeload.

At the start of a campaign season that is already moving at lightning speed, presidential candidates are spending money at unprecedented rates. And these are only the initial investments in an election that strategists from both parties predict could cost each major party’s nominee $500 million.

It’s a number that’s hard to fathom – a $1 billion contest. It would not only be a record amount but nearly double what President Bush and Democratic Sen. John Kerry combined spent just three years ago. With an open field in both parties, total spending by all candidates this year and next could surpass $2 billion.

And the big spending is yet to come.

Where the money goes

Advertising accounts for the largest expense in a political campaign and campaigns are still building their organizations and raising money. But political veterans inside and outside say the level of political activity so far is extraordinary and is testing campaign budgets.

How much the campaigns have spent so far won’t be evident until next month when they have to file public financial reports for the first three months of the year.

“I wouldn’t be surprised if they have a fairly high burn rate,” said Steve Elmendorf, a Democratic lobbyists and top strategist and veteran of the 2004 presidential campaign.

Why such an obsession with money now? The White House is a wide open contest for both parties – neither President Bush nor Vice President Dick Cheney are running. What’s more, about 20 states are considering holding their primaries on Feb. 5 – the equivalent of a national primary that will require huge amounts of spending beginning in September of this year.

Where does all this money go? From decorations – Bush spent nearly $150,000 on balloons, flags, flowers and other filigree in the 2004 campaign – to advertising, the single biggest expense of any campaign.

In 2004, Bush and Kerry had total operating expenses of $572 million. Of that, $312 million – well more than half – went to media consultants to place ads on television and radio. The rest paid for staff salaries, travel, pollsters, fundraising consultants and direct mail. A study by the nonpartisan Center for Public Integrity concluded that all the 2004 presidential candidates spent $457 million on consultants.

Paying a swelling staff

This time four years ago, Elmendorf recalls running Democratic Rep. Dick Gephardt’s fledgling campaign with one spokesman and a press assistant. Today, the top-tier candidates in the Republican and Democratic fields have already rented office space and enlisted pollsters, media strategists, communications specialists, opposition researchers, policy advisers, even videographers.

Romney, the former Republican governor of Massachusetts, has 65 staffers at his Boston headquarters and 25 in key early primary and caucus states. Arizona Republican Sen. John McCain and New York Democratic Sen. Hillary Clinton are reported to have even more.

“At this point, there is a combination of spending to raise the money and to create enough of an organization to look like you can go the distance,” said Scott Reed, a Republican strategist and campaign manager for Sen. Bob Dole’s 1996 presidential run. “It’s a fine balance, and the spending numbers at the end of March are almost as important as the total raised.”

Of the top-tier candidates, Democratic Illinois Sen. Barack Obama and former New York Mayor Rudy Giuliani are operating on the most compressed time. Others such as Romney, McCain, Clinton and former Sen. John Edwards have been courting donors and top strategists for some time.

“We obviously are putting an organization together more quickly than some of the other campaigns who have been putting them together for a while,” Obama said in a recent interview.

McCain and Clinton both got off to an early start, staffing their campaigns with high profile veterans. That means big payrolls. In 2004, Kerry’s presidential campaign placed a cap of $12,500 a month for the top campaign officials. This year, salaries are higher and have to last longer.

McCain, for example, is paying John Weaver, his top political adviser, $15,000 a month – a rate now considered standard for top political talent at most campaigns.

McCain, Obama and Clinton also are paying more for travel. They are abiding by new ethics rules adopted by the Senate – but not yet law – that would require senators flying on private jets to pay the full charter costs – not just the equivalent of a first-class fare.

That means they must pay more than candidates who are not in the Senate and not bound by Senate rules, such as Romney, Edwards and Giuliani.

“You’re going to see a lot of shake-ups in April,” said Reed. “They’re going to be, ‘Whoa, we can’t continue like this. Either we’re not raising enough or spending too much or a combination of the two.’”