Romney’s now the 47%: Campaign $11 million in debt as it awaits access to pooled funds

Oh man, the news cycle just keeps getting worse for Romney.

Just a day after Videogate blew up into a nightmare as Romney insulted 47% of America by calling them lazy government dependents who aren’t self-reliant enough to take care of themselves, the National Review, of all places, reports that the Romney campaign is currently $11 million in debt. And to get out of debt, it’s going to need to access a giant “pool of funds” that—I shit you not—will “redistribute the wealth” with Romney as the benefactor.

How could this happen, you ask—wasn’t the Romney campaign out-raising Obama for months? What about all those superrich donors?

Turns out those superrich donors were the problem. Thanks to some tricky election rules, the short version of the story goes like this: Donors are only allowed to give a certain amount to a candidate for the primary, and a certain amount for the general election. A candidate is only allowed to access the general election funds once he’s officially nominated. In spring and early summer Romney was raising tons of cash from a relatively small number of big donors, but only some of it was accessible for the primary because of the limits imposed on individual donors. To access the rest, he’d have to wait until he was officially nominated at the RNC.

Obama, on the other hand, raised money from far more donors in smaller amounts, which meant more of that money was accessible in the primary, since far fewer donors were maxing out their limit for the primaries and having the rest of their money earmarked for the general election.

This created what the New York Times calls a “significant cash flow problem” for the Romney campaign—it was cash-strapped in the near term as Romney awaited access to the cash. To keep pace with Obama’s spending, the Romney campaign was forced to take out a $20 million loan, of which $11 million is still outstanding.

Even more symbolically potent, the funds for the general election are pooled together in a “joint fund-raising committee” with the Republican Party, which, as the Times notes, makes it “difficult to calculate how much of the Republicans’ $168.5 million in cash on hand at the end of August was general election money reserved for Mr. Romney’s campaign.”

In other words, general election donations get pooled into the party for the Republicans’ common good, and the wealth is “redistributed” to Romney for his campaign.

Whether this sounds like a smart system for the party or an unnecessarily complicated bureaucracy that limits individual control, the point is that it’s the way it is, and Romney must live with the rules just like the rest of us.

For a guy who spent the last 24 hours in the news deriding Americans incapable of navigating the American system without getting stuck, seeming perplexed at each individual’s failure to get rich on his own when the whole free market is there for the taking, the timing really couldn’t be worse.

Of course, Romney is used to getting ready access to bank loans to finance short-term debt—it’s key to corporate functioning and for large businesses the credit has been flowing freely since the bank bailouts. I’m sure he has no idea how hard that credit still is to come by for individuals and small businesses.