The 'money-burning' race of US presidential candidates

Both Trump and Biden are raising huge sums of money for their campaigns, but the former US president is spending more than he earns because of legal troubles.

Former US President Donald Trump is still as powerful a fundraiser as ever. But he is pouring money into legal fees.

President Joe Biden will have plenty of campaign expenses, but new campaign finance filings show he's building a formidable money machine.

US President Joe Biden (left) and former President Donald Trump. Photo: AP

Both men raised tens of millions of dollars in the final quarter of 2023, according to campaign finance reports filed Jan. 31 with the Federal Election Commission. But they are spending that money in very different ways.

President Biden slowly ramped up his campaign in 2023 before accelerating dramatically late in the year. Through political action committees (PACs) and other fundraising methods, he entered 2024 with more than $117 million in cash, but spent more in the last three months of 2023 than in the previous nine months combined.

The reports also shed light on parts of former US ambassador to the United Nations Nikki Haley's campaign as Mr Trump's eventual Republican challenger.

Haley and her super PAC became a darling of major Republican donors late last year, though it’s unclear whether that will be enough to carry her through the February 24 South Carolina primary. Haley suffered disappointing losses to Trump in the Iowa and New Hampshire primaries, which significantly dented her momentum.

For former President Trump, his network of PACs raised about $200 million in 2023.

The Trump campaign’s main fundraising vehicle, the Joint Fundraising Committee, brought in a whopping $75 million in the second half of 2023. The former president continues to enjoy strong support from small donors, who account for a third of all donations.

But former President Trump’s record shows that while he was trying to win the Republican nomination, he was also spending a lot of money on lawsuits and prosecutions. The Trump campaign and its affiliates are burning through money even faster than he can raise it, with a total spending of approximately $210 million in 2023.

They still enter 2024 with positive capital due to strong fundraising from previous years, but spending at a higher rate than revenue is still a red flag for a general election year.

Much of the spending stems from the former president’s legal troubles. Two of his political committees spent a combined $50 million on legal fees last year, making it the largest single expense category. Legal costs are more than advertising, staff salaries, or other typical campaign expenses.

MAGA Inc., the super PAC supporting Trump’s campaign, also had to give the leadership committee tens of millions of dollars to help cover legal costs, noting that the money could have been used to promote Trump as the presidential candidate.

Trump still has plenty of cash in the bank and the ability to raise more. But the reported spending highlights a real challenge for the former president heading into an election year. He is diverting more and more resources from his campaign to deal with legal issues that will only get more expensive.

As for President Biden, he has accelerated his spending in the last three months of 2023, but it is still much smaller than what Trump spent. His campaign spent $19.3 million in the fourth quarter of last year, more than the first three quarters combined, which were just over $14 million.

Of that, about $12 million was spent on advertising. Since last August, President Biden’s campaign has been engaged in a campaign that has spanned seven battleground states, including Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania and Wisconsin. But during that time, polls have shown him trailing former President Trump.

Biden and his allies still have plenty of money to continue their advertising efforts. Just last week, Future Forward, a super PAC supporting President Biden, began booking a $250 million ad campaign for the fall.

Last month, Future Forward members said the group had raised $208 million in 2023 alone.

As for Haley, the scale of her fundraising machine has been modest so far, and many believe she does not have the financial resources to confront former President Trump.

Compared to some of her opponents who have dropped out of the race, like Florida Gov. Ron DeSantis, Haley has spent relatively conservatively in the early months of her campaign. Her campaign raised $17.3 million and spent $14.3 million in the final quarter of last year, and she enters 2024 with $14.5 million in the bank.

The money is one of the incentives that helps Haley continue to participate in the race until the end of the February 24 primary election in South Carolina.

Former US Ambassador to the United Nations Nikki Haley speaks in North Charleston, South Carolina, on January 24. Photo: AP

But how Haley raises money also says a lot about her campaign and why she's having trouble catching up to Mr. Trump.

Across her entire campaign and joint fundraising committee, Haley has raised about $10.6 million from donors contributing less than $200, according to an analysis from Politico . That’s a fraction of the small-dollar donations former President Trump received during the same period.

“Small donors are not only an important source of funds, but they can also be a sign of where the party’s most passionate supporters are,” wrote Politico commentators Steven Shepard and Jessica Piper. “The appeal of small donors shows Trump’s influence with the entire Republican base, a significant advantage he still holds over Haley as the next primary approaches.”

Vu Hoang (According to Politico, Reuters, AFP )

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