Debt Relief

Ever since the Clinton campaign went on life support earlier this week, there’s been speculation that Barack Obama could persuade Hillary to drop out by promising to pay off her campaign debt. The Huffington Post ’s Tom Edsall wrote that “it is not uncommon for winning presidential campaigns to pick up some or all of a competitor’s debts and obligations, although the size of Clinton’s debt and her personal loans to her campaign are unprecedented - somewhere over and above $20 million.” Meanwhile, diarists at DailyKos started hyperventilating that their Obama donations would be given to subsidize Clinton’s ailing campaign. Is their fear justified?

No it’s not. Obama can’t just “pay back” Clinton’s debt. FEC rules limit contributions from one candidate committee to another at $2000, according to FEC spokesman Bob Biersack. So even if Obama wanted to cut Hillary a $10 million check, he couldn’t. Nor could he route his money through the DNC, since national party committees can only give $5000 to a candidate committee.

What Obama can do is fundraise for her. Over the past year, Obama has established a formidable online fundraising apparatus that has raked in more than $240 million since the campaign began. If he called for supporters to chip in for Clinton, or set up a joint fundraising committee, he could probably drum up some cash. How much is unclear. Obama/Clinton relations remain icy, and many Obama supporters might hesitate to cut $2300 checks for the candidate they see as overstaying her welcome in order to weaken Obama against McCain. Plus, if small-bore donors have limited funds, they’re more likely to give Obama cash for the general than to get the multi-millionaire Clinton back on her feet.

Anyway, short story, any money Obama “gives” to Clinton has yet to be raised. Donors who have contribute to his campaign between now and when Clinton drops out shouldn’t worry about their dollars replenishing Clinton’s coffers.

Also check out Jacob Leibenluft’s Explainer, “Can a Campaign Go Bankrupt?”