Question and answer time: The Great Obama Clinton Debt Bailout of 2008
Again, I'm not going to call it a Guide to the Perplexed.
By Moe Lane Posted in 2008 | Barack Obama | Hillary Clinton | Remnants Of The Best Democratic Primary EVER — Comments (38) / Email this page » / Leave a comment »
Q. So, what's going on?
A. Senator Obama is going to ask his donors to help retire Senator Clinton's debt.
Q. Well, isn't that nice of him?
A. Not especially, no.
Q. Do you mean that it's mean of him?
A. No, I mean that it's pretty much required of him.
Q. Required? Do you mean, legally?
A. Nope. He's under no contractual obligation at all. Although he'd prefer to be.
A. You can go to court sometimes and break a contract. Obama's merely over a barrel.
Q. Can we start from the beginning?
A. Sure. It all started when the super-delegates decided to give Obama the nomination -
Q. Didn't he win the nomination?
A. Not in the same way that McCain did, no. Neither Obama nor Clinton gained enough pledged delegates to win the election outright on the first ballot; the former is the assumed nominee solely because enough super-delegates have publicly supported him that he will win on the first ballot - assuming of course that none of them defect.
Q. Why does that matter?
A. Because nothing is in place to stop them from defecting - and if Obama craters in the next three months, they'll drop him like a hot potato.
Q. Would they really dare do that?
A. Check in with former NJ Senator Torricelli and current NJ Senator Lautenberg, then get back to me.
Q. OK, so why is this factoid important?
A. Because it means that, until the nomination process is over, Obama needs Clinton more than Clinton needs Obama. Hence the debt relief.
Q. Doesn't she need him more, seeing as she's the one in debt?
A. Actually, no: half of Senator Clinton's debt is self-owed - that is, she owes herself the money. The rest she could probably cover on her own.
Q. So why doesn't she?
A. Because she can get Senator Obama to do it for her.
Q. So why should he?
A. Because of her donor list.
Q. Her donor list?
A. Yup. There are a lot of people who gave her money in the primary that didn't give any to Senator Obama. He badly needs those people to give him money, too. But until her debt is gone, she has first crack at those people - and a legitimate reason not to muddy the waters by giving him the list.
Q. Hold on. Obama's a fantastic fundraiser, right? Why does he need these people?
A. Because his fundraising numbers have been dropping since February 2008. That month, he raised $55 million; in May of 2008 he raised $22.889 million. That was only half a million more than John McCain raised in May, and Obama's cash on hand is actually less than McCain's when you take out the $10 million that he has dedicated for the general election. McCain, of course, is taking public financing for that, so Obama really needs some good months, and quickly. Having the Clintons will help, particularly when it comes to the DNC problem...
Q. The DNC problem?
A. Yeah, I guess that was a leading statement. It's like this: if you look at the total numbers, you'll see that the GOP is currently about $6 million down on cash-on-hand. However, when it comes to the RNC versus the DNC, the former has about $50 million more on hand to spend - and I've spoken with the deputy chair of the RNC: they consider their highest priority to be the Presidential election. For that matter, the DNC is currently facing an outright embarrassment with their convention in Denver: they've missed multiple deadlines in arranging for funding, and are likely to have to either cut back significantly, or go significantly in debt, unless Obama can funnel them the cash.
Q. Wasn't there an article about Obama hitting $100 million in June?
A. You mean this piece of political erotica? Let me put it this way: we are 80% of the way through June, which means that if Barack Obama was on track for that prediction to come true he would have raised $80 million dollars by now. If he had done that, the Obama campaign would have paid to have that fact written on the moon. He will almost certainly do better this month than he did in May, and his cash on hand will improve, thanks to the end of the primary season. But this month's expectations are far too high, for far too many people. The sooner that Obama can start mining Clinton's supporters for cash, the less embarrassing it's going to be for him when this comes out.
Q. So he needs her donor list?
A. So he needs her donor list. Which she seems reluctant to give out, until her debt's repaired.
Q. And to repair her debt...
A. He needs to go to his big-money donors. If he pays it out of his cash on hand, he weakens himself, just in time for the June reckoning; if he makes the request of his small donors - most of whom have not maxed out their contributions - he risks them deciding that once they've paid for Clinton they no longer need to give. Hey, they passed up that vacation, right? How much did the Democrats expect them to sacrifice, anyway? Clinton's big-money donors have all already maxed out themselves, and besides, they're now waiting for Obama to offer them favors, not be asked for them in return. All of this leaves his strongest big money supporters, most of whom haven't maxed out for Clinton. Amusingly, most of them don't want to max out for Clinton.
A. Because they despise her. Until the defections started, anybody who was ready to buck the trend and back the underdog against the frontrunner was probably doing it because they really hated Hillary Clinton. This should be their moment - except that now they're expected to have to pay down her debt. It's quite droll.
Q. So, what happens now?
A. At a guess? Obama pushes his big-money donors for donations to Hillary. In exchange, Hillary and her husband make a carefully-calculated amount of stumping for Obama. Once her debt goes away, she'll have no excuse for not making her donor list available, so she'll release it to the Obama campaign. The entire process will go more slowly than expected, so Obama will probably have to balloon payment the remaining at some point. That'll cut into his cash-on-hand, so he'll have to start seriously shaking his small-money donors for the necessary funds to make up for the shortfall.
Alternatively, she releases the damn thing tomorrow to him and I look like an idiot. This primary has been like that.
Q. Um, don't you mean the election?