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Fund-raising Blues: DNC remains in debt as it competes with Obama group for donors

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Barely more than a year before the 2014 midterm elections, the Democratic National Committee is struggling to pay off debt and rebuild its war chest while competing for donations with Organizing for America, the Web-based political group created from the remnants of President Obama's re-election organization.

Since the 2012 presidential campaign, which cost almost $7 billion and was the most expensive in history, the DNC has been struggling with a debt load that stands at more than $18 million.

The Republican National Committee, meanwhile, has no debt and about $13 million cash on hand. On virtually every major benchmark — cash on hand, debt and money raised to date — the RNC is outperforming the DNC.

DNC press secretary Michael Czin said results of the 2012 election, which kept Democrats in control of the White House and the Senate, were worth the red ink. "We're proud of what we did last year and we would do it again. With the result we had, we'd be crazy not to," Mr. Czin said.

Some observers, however, are wondering whether the DNC debt could hurt Democrats in the midterm election campaigns — particularly if the DNC is losing donors to Mr. Obama's Organizing for America.

Many of the organization's most prominent donors — those who cut checks for six figures or more — neglected to donate to the DNC this fundraising cycle.

In fact, 15 of the top 24 donors to Organizing for America have not donated to the DNC since March or earlier, according to records from the Center for Responsive Politics.

Mr. Czin said there is no rivalry between the two organizations.

"We don't compete with other groups; we have distinct roles that complement each other."

Former Federal Election Commission Chairman Michael Toner disagrees.

"DNC fundraising has been hurt by the OFA, there's no question about it," he said.

Mr. Toner said that if the trend persists and donors continue to abandon the DNC in order to bankroll Organizing for America, it could increase the group's debt.

Kirk Dornbush, vice chairman of the DNC National Finance Committee, said, "The missions and functions of the DNC and OFA, while separate and uncoordinated, are nonetheless complementary, not competitive. It shouldn't be surprising these donors get calls from all entities, on both sides."

Mr. Toner said the DNC's best chance for recovery is help from Mr. Obama himself. "Their saving grace is having a sitting president and the ability to have him host big fundraisers for them, that gives the DNC an opportunity to pare down its debt in the months ahead."

This year, the president has hosted 15 fundraising events for the DNC.

Mr. Czin said the DNC has renewed its emphasis on the fundraising effort.

"We're retooling and building our programs to ensure that Democrats are successful in 2013, 2014, 2016 and beyond. We've put in place a top-notch team who are delivering real results," Mr. Czin said.

"This Monday was our single-best online fundraising day since before the 2012 election, bringing in over $850,000 in just 24 hours," he said.

Mr. Dornbush said the DNC will erase its debt in time for the midterm elections.

While the DNC is busy catching up on its debt, the RNC is making financial strides toward the next election.

"Every day we are spending money to win in 2013, 2014 and 2016 while the Democrats are paying off debt and aren't focused on winning elections," said RNC press secretary Kirsten Kukowski. The RNC has made a financial comeback since 2011, when the committee's debt hit $24 million.

The DNC's financial woes also could cut into the budgets of other Democratic fundraising organizations such as the Democratic Senatorial Campaign Committee and the Democratic Congressional Campaign Committee.

"The DNC's financial difficulties will place even greater fundraising pressure on the DCCC and DSCC between now and the midterm election. Given the DNC's fundraising struggles, it is unlikely that the DNC will be able to transfer significant funds to the DCCC and DSCC during this election cycle."

Republicans said the DNC's financial problems should be seen as a reflection of the Democrats' inability to deal with the country's fiscal crisis.

"It's difficult to see how Democrats can have a serious conversation about how our country pays its bills when they are carrying millions of their own debt," Ms. Kukowski said. "Its hard to believe the DNC, with a Democratic president who is known for his fundraising prowess, is in this position."

The DNC's debt has been decreasing slowly since April, when it peaked at $22.5 million.

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