by hilzoy

Earlier tonight, I went to the FEC's website to check out the January fundraising reports for Clinton, Obama, and McCain. Matt Stoller wonders whether the McCain campaign is broke, based on the fact that its liabilities exceed its assets. They do, but on the other hand, most of those liabilities are McCain's bank loan, whose due date seems to be in May, so he has time to drum up the money. (On the other hand, I had no idea it was possible to run up $720,164.57 on one's AmEx card. Not something I want to try at home.)

I was somewhat puzzled by Clinton's statement, though. On the one hand, her campaign clearly took in considerably less than it paid out. About nine million dollars less. And that can hardly be good news. Moreover, she has a mass of debt: $7,576,700.48 worth, to be precise (not including the loan she made to herself.) Moreover, while some of it is large sums (over $2million owed to Mark Penn, for instance), there are a lot of pretty small unpaid bills to places throughout Iowa and New Hampshire. (Honestly, why not pay the $500.12 they owe to Premier Pizza in Algonquin, Iowa? Or the $615.25 they owe Depot Deli of Shenandoah, Iowa? Your average pizzeria or deli is not made of money, after all.)

The puzzling part, though, was that despite all this debt, the Clinton campaign has tons of cash on hand. Nearly $38 million at the beginning of January; a little over $29 million at the end of the month. That seemed odd, especially in light of those news stories about their being broke after Iowa. As I was scratching my head about this, I came across a story in Politico that explained everything:

"According to the reports, Clinton raised about $20 million in January, including her loan. She spent nearly $29 million during the month.

She reported a cash balance of $29 million. But more than $20 million of that is money dedicated to the general election. Her personal loan accounts for more than half of the remaining approximately $9 million, leaving just about $4 million in cash raised from donors. (...)

Clinton’s strapped financial situation in late January meant she couldn’t invest in all of the Super Tuesday states, particularly the expensive ground operations required in caucus states.

Obama won every one of those caucus contests on Feb. 5, opening up a critical lead among pledged delegates."

That's the fact I didn't know: that these forms include money restricted to the general election. Which changes everything.

If Clinton's receipts and spending for February match her receipts and spending for January, she will have blown through all the cash she has available for the primaries by the end of the month. Question: does anyone think that she will take in as much in February as she did in January? I don't. For one thing, January included both the period after she lost in Iowa and the period after she won New Hampshire, either of which might have prompted people to send money. But by February, losses were no longer a shock, and for most of the month, there weren't any victories. People want to back someone they think has a decent shot at winning, and after Maine, at least, Clinton's donors have to have been wondering whether she can pull it out. Besides that, February has also been a month full of stories about the Clinton campaign's ineptitude. If I were a donor, I'd think twice about giving to a campaign that had burned through so much money with so little to show for it, or that had declared Texas a must-win state without bothering to figure out its delegate selection rules.

I assume that the Clinton campaign has cut back its expenses. But there are limits to how far you can cut back expenses without seriously affecting your chances of winning, and if donations drop considerably, the Clinton campaign will reach those limits. Clinton can always make another loan to her campaign, but I imagine there are limits to the Clintons' willingness to finance the campaign themselves. Which means that at some point, they are going to have to make some tough decisions. In their shoes, if I didn't dramatically turn things around in Texas and Ohio, I would think long and hard before continuing to Pennsylvania.

Obama doesn't have to make those choices: he has plenty of cash on hand, and took in over $6 million more than he paid out last month. And Greg Sargent reports that he's on track to raise more money this month than he did last month. But Clinton will, I think, and soon.

(Cross-posted to Obsidian Wings)

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