- The Washington Times - Sunday, July 31, 2011

The Republican Party’s national governing body, left in financial shambles by its previous leadership, is wrestling with a tricky calculus as it gears up for the 2012 campaign.

The Republican National Committee, which began this year nearly $25 million in the red, has to decide when to stop paying down a heavy debt load and start stockpiling cash to compete with the $1 billion some Republicans fear President Obama’s campaign will have to spend next year, new RNC Chairman Reince Priebus said in an interview.

“We know we are on a good trajectory now to have our debt down to a place that we’ll choose whether we want to continue bringing the debt down or to build up our cash on hand for next year,” Mr. Priebus told reporters and editors at The Washington Times in a wide-ranging discussion Friday.

Although Mr. Obama appears never to have uttered the $1 billion claim, he did raise $750 million for 2008 and given his low job-approval rating even with independent voters, he may well need record fundraising to net enough money to make a good stab at refurbishing his image in TV ads next year.

But deciding to begin increasing cash on hand risks undermining the confidence of the RNC’s traditional donor base that Mr. Priebus says he has worked so hard to restore. A late move to build up the party war chest risks leaving the RNC debt free but cash poor and vulnerable to Mr. Obama’s re-election machinery.

And simply matching the president dollar for dollar in raising money for 2012 won’t suffice for the RNC or the Republican presidential nominee.

“My job really right now is to maximize net dollars,” Mr. Priebus said.

The RNC has grossed more major-donor money in the six months since Mr. Priebus defeated incumbent RNC chief Michael S. Steele than Mr. Steele raised in two years as chairman, Mr. Priebus said.

But the net income figure is the one that matters, and on that front Mr. Priebus said he has worked hard to restore major donor confidence in the RNC’s fiscal integrity.

It costs almost nothing to raise each dollar from a person who gives several hundred dollars up to $30,800 a year per person, while costing 60 cents or more for each dollar donated by smaller donors. At times, Mr. Steele’s RNC was actually spending more on fundraising than it was taking in, according to Federal Election Commission reports it filed. Those days are apparently gone, according to this year’s FEC reports.

“Our net is actually pretty high,” Mr. Priebus said. “We have either paid down debt or accumulated cash on hand away in excess of $15 million in the first 5 1/2 months of this year.”

Mr. Priebus said he is careful not to take money from high-net major donor fundraising and put it into relatively low-return direct mail, phone banks and other small donor appeals. The Steele-led effort, having lost the confidence of big donors, resorted to spending more and more money on small-donor appeals, often actually winding up in the hole — a first in national party fundraising history.

Careful planning appears to have replaced desperation tactics at party headquarters a block south of the Capitol.

“We balance the small-dollar mail to the high net of major-donor fundraising so that at the end of the month we can put away $2 million cash on hand,” Mr. Priebus said.

Obama raised record sums in 2008 because he had a movement, and in politics a movement transcends everything,” Mr. Priebus, who at times talks the language of a movement conservative but also appears careful not to usurp the party’s top elected officials and candidates to set policy and shape the overall GOP message. “We had a movement in 2010 and look what happened.”

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