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Joe Biden’s decision not to run for reelection leaves the Democratic nominee that replaces him with an unprecedented challenge: running a successful presidential campaign in under four months. That will take a lot of money.
On today’s Big Take podcast: How much could that campaign cost? Gregory Korte and Laura Davison, who cover money and politics for Bloomberg, dig into that question, Kamala Harris’s fundraising edge and how Democratic donors are reacting to the news.
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Here is a lightly edited transcript of the conversation:
Sarah Holder: So David – it happened.
David Gura: It did at the end of a long weekend and a few long weeks.
Holder: After mounting pressure from members of Joe Biden’s own party in Congress, and, finally, reportedly, from his former running mate and former President Barack Obama… Biden released a statement saying he’d drop out of the 2024 US presidential race.
Gregory Korte: Suddenly, on a Sunday afternoon, the dam broke.
Holder: That dam broke via tweet. I called up Gregory Korte, a White House and politics reporter, to get his reaction to the news.
Korte: The decision isn't a surprise, but the sudden timing of it was.
Gura: And Sarah, we got an answer to that big question, “Would Biden drop out?” But that only raised more questions.
Korte: In addition to the decision not to run for reelection, there were a lot of decisions baked in that decision. Does he tap an heir apparent? Does he endorse Kamala Harris?
Holder: Who would donors back to replace him? Where does the Democratic party go from here?
Gura: And not long after his first announcement, Biden tweeted an endorsement of Harris. But that endorsement now kicks off an entirely new phase of the election, which means there are even more unknowns.
Holder: The Democratic National Convention is one month away. Voters will go to the polls in less than four months. Even if Harris clinches the nomination in Chicago in August, is there time for her to fundraise and advertise herself to the American people? How much money does a candidate really need to campaign successfully if they’re taking over the ticket so late in the year?
Korte: One of my first thoughts was, it's gonna be a long three or four months now.
Gura: This is the Big Take from Bloomberg News. I’m David Gura.
Holder: And I’m Sarah Holder.
Today on the show, I dig into these questions with Gregory, and with money and politics editor Laura Davison.
As of Sunday evening, just hours after President Biden’s announcement, not much was known about how he made the decision and how he thought about timing its release… I asked Gregory Korte and Laura Davison about that.
Korte: It's hard to say because he kept counsel only with a very small inner circle of aides on this. We're getting reporting that even his own campaign staff was blindsided by this announcement. He may have been waiting until after the Republican convention for things to settle. He was in seclusion for the past few days, recovering from a COVID infection. So, he may have been waiting to see if he could ride that out and come back.
Laura Davison: It's really important to note that in the past, you know, essentially three weeks since the debate that really sparked all these concerns, Democratic donors have basically said, ‘Look, we are freezing contributions to your campaign.’
There have been a handful of donors who have come out and said, ‘I'm still with the president,’ but most folks said, ‘Look, we're not going to throw good money after bad. We want this guy out, and our leverage as donors is money.’ Um, so you saw, you know, a bunch of different efforts. You know, some donors start different super PACs that they said would, you know, start collecting money that would go to whoever the eventual new nominee is.
And this all came at a very critical moment when Trump had a ton of new donor support. You know, folks like Elon Musk and Timothy Mellon were coming in with really large donations, and they realized that, look, this is not a tenable situation here.
Holder: This moment feels unprecedented and people are already reacting all around the world. How do you expect markets to react?
Davison: We do know that in the past couple weeks, as Trump has seemingly grown stronger in his bid that markets have started to price a Trump win in. So that looks like, a potential increase in tariffs, particularly targeted Chinese goods, but all sorts of goods. Markets are also anticipating a pretty large tax cut if it’s Trump. Anytime there is a seismic shift in what US leadership looks like, there will be market reactions.
Holder: So, as part of his announcement, Biden endorsed Kamala Harris as the Democratic Party nominee. Does it mean Biden's campaign is shutting down immediately and Harris’s is now jumping into action? What happens next, Gregory?
Korte: Presumably, if Biden has his way and Vice President Harris has hers, she will take now the top spot of that ticket and recommend to the delegates at the convention next month, who her choice for vice president would be, her running mate.
She would get to keep that size of a war chest that Biden has built, but he started to burn through cash in the past month or so, and it's not quite as formidable as they would like. So the first order of business is to rebuild that war chest, get some big donors on board through super PACs, and then it will be up to the vice president, if it is her as the nominee to decide how she wants to structure her campaign,
But there's really not a whole lot of time, right, to completely blow up the campaign. It already has a field office and it has already bought a lot of ad time. That strategy is going to have to change very quickly of course, now that there's a new candidate, the top of the ticket. So a lot of these things we're going to just have to see in the coming days, how that all comes to pass.
Holder: Just how much money is currently in the Biden campaign coffers compared to Trump?
Davison: So just on the raw dollar total, they're not too far apart. So the Biden campaign has $96 million. The Trump campaign has $128 million. So Trump is ahead, not a massive amount. The thing that's a real differentiator here is that Biden's fundraising has totally fallen off a cliff.
The other thing is just how much they're spending. In the month of June, this is even, you know, before a lot of the debate stuff started percolating, Democrats spent 93 percent of the money that they brought in compared to Trump, who was spending less than half. So just the burn rate there is, is a massive difference.
Korte: The Trump forces have been spending next to nothing. They have a super PAC that spent money in Pennsylvania, Georgia, and now has just gone in to Arizona, but they've been marshaling their resources, really sort of hoarding their cash while Biden has gotten out early.
All that money now, I don't want to say it's wasted money, because it helped perhaps the Democratic brand, but it was money that was spent to promote Biden, and now Democrats have to figure out a new branding, a new message now that the nominee will be somebody else.
Holder: And Laura, how is the Trump camp reacting to this news?
Davison: There's a couple different schools of thought within the Trump campaign. Just last night he had a rally in Michigan where he talked about some of the disarray that was happening with Democrats. Of course, this was before Biden announced that he would be dropping out, but Trump at the top of his rally essentially like polled the crowd and said, you know, uh, basically, ‘who do you want to be our opponent, do you want it to be Joe Biden? Do you want it to be Kamala Harris?’
And so the crowd overwhelmingly by a show of voices, indicated that they wanted Biden to be the nominee. You know, a clear sign that at least, you know, Trump supporters think that he is an easier candidate to beat. However, we know that the Trump campaign for weeks has been preparing that it may be Kamala or it may be someone else in the race that they're running against. So they've started working on messaging.
Holder: What are we hearing about how Democratic donors are reacting to Biden's announcement and whether they'll rally behind Kamala Harris versus someone else?
Davison: So there's really two camps of donors right now. One, some of the major donors who are coming out and saying, ‘look, uh, we support Harris.’ These are folks like George Soros and his son, Alexander Soros saying ‘we're going to support Harris and, you know, what she needs to run.’
There's another group of donors. I'll note that these are less major donors. These are people who give maybe, maybe up to a million dollars, but still are, have an influential voice within the party and are very vocal. And they're saying, ‘Hold on a second. We want to make sure there's some sort of open nominating process. We want to have either a primary or an open convention.’
And this is going to be a debate that plays out over the next couple days. And whether those loud vocal voices saying they want, um, some sort of, uh, way to choose the nominee versus have it just going to Harris automatically. If they win out, this could be very messy and you could have a lot of different candidates rise to the fore, you know, each, siphoning off a little bit of donor money, but not having donors unite behind one candidate.
This is the exact problem that Republicans had on their side, after 2022, the major party donors said, ‘We don't want to have Trump as our nominee. We should all pick a candidate and, you know, give to that candidate, and we could defeat Trump.’
That never happened. First looked like it might be DeSantis then maybe Nikki Haley, but Trump at that point was too powerful and, uh, you know, had enough support within the party base. A similar thing could happen with Harris.
If donors don't decide and it's clear that the party leadership and the base of the party is moving with Harris, she could be the nominee and donors are going to have to line behind because they just won't have any options at that point.
Holder: After the break, we dig into what an open convention could look like, and the financial problems that could face the eventual nominee… Including how much money a new candidate would need to launch a successful campaign in under four months…
We’re back. I’ve been talking with White House and Politics reporter Gregory Korte and money and politics editor Laura Davison about what we currently know about President Biden’s decision to drop out of the 2024 race. But what comes next?
The open convention scenario sounds chaotic, perhaps, but could any of this upheaval actually energize donors? Could donors who have thus far sat on the sidelines get activated to actually start donating more to the Democratic party?
Davison: That's the argument that some of these donors make and said, look, you know, they're particularly arguing for a more moderate candidate. Have someone who's maybe a little bit more business friendly, have someone who, appeals to some of those people who are Never Trumpers on the Republican side. You could bring a lot of money in…
Right now, that's all theoretical. There's no one who's coming forth and saying, look, I'm going to pledge X million dollars if it is a certain candidate.
Everyone is sort of, seeing where the, the political winds are blowing and, just the way that the calendar moves, these decisions have to be made soon, this is not something that can play out, over a couple, uh, weeks or months, you know, it's, it's almost a first mover advantage here.
Korte: One of the games that, modern campaigns play is that they try to raise a lot of money around events to kind of signal that they have the momentum so I would expect, the Harris campaign, now that there is one to come out next few days and give us a total of exactly how many millions of dollars she's raised in a very short period of time to kind of give the impression that there's a snowball effect, that people are rallying around her campaign that she does have the ability to raise that small dollar donor and sometimes small dollar donors follow small dollar donors. If people see that there is momentum behind the candidate that might encourage even more people to jump in.
Holder: Already, we're seeing that tactic in action. As of 9 PM ET on Sunday night, the Democratic fundraising platform ActBlue announced it had received over $46 million in donations from small-dollar donors — just since Biden officially endorsed Harris.
Laura, supporters of Harris have been saying that one of her biggest assets is her access to Biden's war chest -- that $96 million we were talking about earlier. How does the process work now -- does the Harris campaign inherit all that money automatically? Or could it go to another nominee?
Davison: If it is Harris as the nominee, yes, she would be able to inherit the $96 million or so that is left in the account. She's able to operate a lot more seamlessly than if it's another candidate. So she is able to keep on staff. People could keep their email addresses.
If, in fact, it is another candidate, they have to start a campaign committee, essentially the thing you file with the FEC to say,’ hey, I'm running for president.’ They have to start a brand new campaign.
That campaign will have zero dollars in it. The $96 million that's left in the Biden campaign, they can either donate that to the Democratic National Committee or to a super PAC, which presumably would then go to support that new candidate, ultimately. But, you know, at least in their campaign account, they'll have zero dollars.
So they'll immediately have to start fundraising. There are a bunch of fundraising limitations. Um, so for just an individual donor, the most they can give to that campaign, is just a couple thousand dollars. So that you've got to go out and bring in a lot of money. You need to bring in a lot of grassroots money.
You would need to have all of the super PACs working with you. Imagine a startup, this is what the campaign would be doing of just, you know, getting staff hired, getting office space, doing all of these things and it would take them weeks to just get up on the ground and running, you know, stuff that a campaign, in a normal year would have been doing, you know, a year or even two years ago.
Holder: How much money will they need to run an effective campaign over the next few months?
Davison: So Biden and his team, you know, and kind of allies were talking about that they need, at least a billion, if not more, to run this campaign. Biden and his, you know, allies raised about a billion dollars in 2020. So far, the Biden campaign, you know, to date, and, you know, along with the DNC, you know, has spent just a little bit over $350 million.
But of course, the spending really, really ramps up, you know, as you head into Election Day. The Democrats have created a strategy that's pretty expensive. They have a lot of field offices with a lot of staff. They are running a lot of advertising, you know, tens of millions of dollars, you know, in any given month or week.
They're going to need a lot of money if they're going to continue the strategy. And because they're going to be introducing a new candidate, and a new vice presidential candidate to the public. They're going to need to continue that money.
Holder: Bloomberg has reported that Harris has been having meetings with Wall Street executives recently, and from her days in California politics, she has her own ties to Silicon Valley and the tech industry. How might she leverage those relationships?
Davison: Harris is very lucky because she comes from California, which is called a donor state in that, you know, California really funds, uh, Democratic runs across the country. So she has close ties to Silicon Valley. She is a known entity there. People know her name.
Being vice president, she's also been able to operate a little bit more under the radar than Biden. So she's been taking these meetings with folks on Wall Street to explain some of the Biden policies. She started to build those relationships, you know, remember, she's only 59 years old, so she's always had an eye to what she would do after she was Biden's vice president. And knowing that she needs to have Wall Street support, she needs to have some of these ties to the business community.
Korte: At least among some of the wall street donors, there is an ideological divide here that Harris is perceived as perhaps to the left of Biden. When she ran in 2020, there was a concerted effort among some Democratic donors to find a more moderate candidate.
Remember Bernie Sanders was in that race, Elizabeth Warren, and Kamala Harris was somewhere on the spectrum between Biden and those more liberal candidates, probably a little bit more towards the progressive side. She was for Medicare for all for example. She was for a number of different policies that she's had now had to subsume Biden's policies as his vice president. But there might be some concern from some wall street donors of what they're going to get in a future Harris administration.
Holder: In recent weeks, new PACs have popped up, that are open about fundraising for a non-Biden candidate… Do we know how much money those PACs have raised at this point?
Davison: We don't know exactly how much money is in them because they've, you know, just sprung up in the, in the past, a couple of days or weeks. One of the ones, uh, Mike Novogratz of Galaxy Digital, his PAC has said, uh, you know, this is a couple of weeks old now at this point, but said it raised about 2 million sort of in the initial days after forming.
In the next 24, 48 hours, I anticipate we'll see a lot of donors come forward, either with actual money or with commitments to give to whether it's, you know, Vice President Harris or another candidate should someone else throw their hat in the ring. And that will be a key determiner of who really has the juice to mount a run here.
Holder: As we've been talking about, a Harris candidacy is not a foregone conclusion, despite Biden's announcement that he will endorse her. The Democratic National Convention is in one month. Is there still a chance that Democrats might choose someone besides Harris at the convention, Gregory?
Korte: That's absolutely possible under the convention rules, but practically speaking, it seems to me that any other candidate would have to get out there relatively quickly before the institutional Democratic party really rallies around Harris. We're already seeing endorsements from former president, Bill Clinton and Hillary Clinton. We're starting to see the congressional black caucus and, other really important stakeholders rally around Harris. She has important support from important constituencies in the Democratic party.
And so it would take a lot for somebody to dislodge her from that perch. And somebody is going to have to come in with a pretty aggressive campaign and a lot of money pretty soon to signal that this is going to be an open process. Otherwise I would expect Democrats to, to really circle their wagons around Harris.
Holder: Assuming Harris gets the nomination… What is the process for Harris to choose her running mate, and how might she try to leverage that decision to bring in additional funding?
Korte: We saw this, on the Republican side, just this past week when Donald Trump chose JD Vance as his running mate. And he did so really at almost a last possible moment before the roll call even happened. So there is time for that to happen. We might expect for Harris to wait until closer to the convention when it's clear that she has the votes.
Although she could come up with a ticket, uh, earlier than that, to kind of try to figure out how to unify the party, maybe pick somebody from a different wing of the party. Maybe a governor. Andy Beshear, the governor of Kentucky's name has come up.
The governors from Michigan and Maryland and Pennsylvania and California, all of whom could be potential running mates.
One potential path would be to select as a running mate somebody who is already independently wealthy and can write the campaign a big check. You can self fund your campaign. It's not subject to limits. And one name that could come into play in that kind of a scenario is J.B. Pritzker, the Governor of Illinois, who is independently wealthy, is a billionaire, inherited, a lot of money from his family's hotel and real estate empire, worked in venture capital and was very influential in getting the convention to come to Chicago in his home state by helping to support that effort monetarily and, could do the same if he were on the ticket.
--With assistance from David Gura.
©2024 Bloomberg L.P.
