The task was made easier by her solid victory in the Democrats' April 22 Pennsylvania primary; her campaign claims that she raised approximately 2.5 million dollars over the internet immediately after the result was announced, and 10 million over three days.  Yet her financial position is far more distressed than her campaign is willing to admit.

Empty coffers?

In last week's Federal Election Commission (FEC) filings, the Clinton campaign said that during March it had raised 20.9 million dollars and spent 22.4 million, leaving it with 31.7 million dollars in cash on hand.  Obama raised 42.8 million dollars last month, spent 30.6 million, and boasted a remaining bankroll of 51.1 million. 

These headline figures indicate that Clinton suffers from a large fundraising disadvantage, and is now spending more than she takes in, but imply that she still enjoys a strong cash position.  However, they obscure two key factors: cumulative campaign debt and FEC rules limiting funding that can be spent during the primaries:

• Federal law restricts election campaign contributions to 2,300 dollars per individual per campaign (ie, 2,300 dollars for the party primaries and an equal amount for the general election).  This privileges candidates (such as Obama) that attract cash from many small donors -- who they can solicit for further contributions within FEC limits -- as opposed to those (like Clinton) who quickly 'max out' their funding from a smaller number of wealthy donors.
• According to the FEC, just 8 million dollars of Clinton's 31.7 million in cash is eligible to be spent in the primaries -- the remainder is reserved for the general election.  Media reports suggest that her campaign has encouraged donors who have already 'maxed out' their primary contributions to give 2,300 for her fight against the presumptive Republican nominee, Senator John McCain -- even though such a battle may never occur.  These contributions allow her to pad her headline bank balance, concealing the severity of her primary cash crunch.
• As of the end of March, the Clinton campaign reported debts of 10.3 million dollars; Obama owed outside vendors just 600,000 dollars.

Cash drought

Therefore, Clinton actually finished last month well in the red, with a cash balance available for the primary campaign of 8 million dollars and debts of 10.3 million -- excluding a 5 million dollar loan she made to her campaign in February.  Post-Pennsylvania, reports suggest that Clinton should be able to keep her campaign above water by expanding her donor pool -- but her financial disadvantage is increasing.

Even successful campaigns can experience periodic cash droughts -- McCain's presidential bid almost went bust late last year.  But Clinton's cash problems increase the stakes in the next round of primaries.  If Obama edges her in Indiana on May 6, a cash crisis could knock her out of the race.