May fundraising: Obama and McCain raise similar amount while RNC crushes DNC, but Democrats shouldn't worry

Fundraising has received renewed attention ever since Barack Obama announced he would opt out of the public financing system last week. Over the past few days, two news items have attracted attention: (1) Obama and McCain raising roughly the same amount of money in May and (2) the RNC’s continued financial dominance over the DNC.

The first item has understandably led to more headlines, with some using it to question Obama’s decision to renounce public financing. But Democrats should not be worried about that bit of news. In fact, it is the second story that could prove more problematic -- though it confirms that the Illinois Senator’s decision to free himself from spending limits was strategically necessary.

First, then, came the two campaign’s financial disclosures for during the month of May. McCain announced he had raised $21.5 million, his best fundraising month yet and leaving him with a respectable $31 million in the bank to use until his early-September convention. Obama, meanwhile, raised $23.3 million, a strong sum as well but one that pales in comparison to the Democrat’s totals for March ($40 million) and April ($32 million). More surprisingly, this means that Obama has as much cash left in the bank as of the end of May to use in the primary season, $33 million (Obama has also already raised about $10 million to use in the general election, between September and November).

Why has Obama’s fundraising declined, and does this mean that his decision to opt out of public fundraising was a bad one? McCain devoted a lot of the month of May to fundraising. He certainly needed it and his respectable cash-on-hand totals are his reward, as he will surely have enough money to stay on air through the next few months. On the other hand, the Obama campaign was in surreal situation: They had effectively clinched the nomination on May 6^th by winning big in North Carolina but Hillary Clinton was staying in the race, making it impossible for Obama to switch to the general election (and ask for contributions accordingly) without making unity efforts more difficult. This means that Obama held off on major fundraising efforts designed in the perspective of facing McCain, and donation pitches framed as part of the primary campaign surely had a reduced effect since the race against Clinton no longer seemed competitive at the time.

In June, the Obama campaign has been in full fundraising mode this month. Not only did the days following June 3^rd surely boost his totals but the campaign launched a fundraising drive after its public financing decision to emphasize its determination to shatter records. After all, the campaign is aware that it has to make the choice to opt out of the system a worthy one. Also don’t forget that Obama will now start to tap into the vast network of Clinton fundraisers, and while some of them might be too bitter to donate to his campaign Hillary herself has encouraged her top donors to contribute to her former rival and is arranging a meeting between the Illinois Senators and her best fundraisers. That should lead to some very tangible benefits.

And all in all, the fact remains that McCain will be limited to $84 million between September and November -- a total Obama is sure to surpass even if he remains at such "low" totals as $23 million. And it goes without saying that the mere fact that $23 million is considering a disappointing result is a reflection of how much Obama has raised the bar.

Much more worrisome to Democrats is the financial disclosures of the national parties for the month of May. The RNC raised more than $24 million while the DNC raised less than $4 million. The disparity in cash-in-hand is huge: $53.5 million to $4 million. Most of this money will be used in the presidential race (though the RNC might be forced to somewhat help the RNCC), creating a big disadvantage for the Obama campaign to overcome. There are a number of reasons to this (the RNC is historically a very strong fundraising machine, while the DNC is hurt by the fact that Democrats are enthusiastic by Obama and donating their money directly to him), but the result is clear: Combined with McCain’s totals, Republicans will have enough money to operate a decent campaign over the next 5 months.

In fact, the difference between the RNC and DNC should make the Obama campaign much more confident that its decision was strategically necessary. If the Illinois Senator had opted in public financing, both he and McCain would have been limited to $84 million from September to November. But the fact that the RNC would have had millions more to spend would have put the Democrat in a huge financial hole, without even considering what effect 527s might have. With Obama opting out, however, he will have a lot more than McCain to spend during those few months and, given that some are predicting a $300 million budget, he looks almost certain to crush the McCain + RNC total as well.

(The non-presidential story in those fundraising numbers is of course the continued disparity between the NRCC and the DCCC. While the Republican branch managed to stay fairly close in May receipts, $6 million to $5 million, it remains at a stunning financial disadvantage: The DCCC has $47 million of cash-in-hand and the NRCC only has $6 million. This will have a huge impact in the fall given how much many House challengers depend on the national committees. The Senate's picture is less severe, with the DSCC having $17 million more.)

Update: Ben Smith reports that the Obama campaign is worried about the RNC/DNC disparity and has released this chart to pressure Clinton supporters into donating to the DNC: