GOP candidates burning through campaign cash
Former President Donald Trump pleaded not guilty on Thursday to federal charges that he plotted to overturn the 2020 elections. Trump is the GOP presidential frontrunner and has been indicted three times since launching his 2024 campaign. The former president is spending big on legal fees and that's one reason he's burning campaign cash fast.
The big picture: Trump isn't the only one blowing through money. Other Republican candidates have an even higher so-called "burn rate." We take a closer look at the numbers and why they matter for this phase of the campaign.
- Plus, checking back on the health of America's downtowns.
- And, the Hollywood strikes' economic impact – by the numbers.
Credits: Axios Today is produced by Niala Boodhoo, Alexandra Botti, Fonda Mwangi, Lydia McMullen-Laird and Alex Sugiura. Music is composed by Evan Viola. You can reach us at [email protected]. You can text questions, comments and story ideas to Niala as a text or voice memo to 202-918-4893.
NIALA: Good morning! Welcome to Axios Today!
It's Friday, August 4th.
I'm Niala Boodhoo.
Today: checking back on the health of America's downtowns. Plus, the Hollywood strikes' economic impact – by the numbers.
But first: Trump's third arraignment and why he's not the only GOP candidate burning through campaign cash. Our weekly politics State of Play is today's One Big Thing.
DONALD TRUMP: This is a very sad day for America.
NIALA: Former President Trump had few words for reporters from a rainy tarmac at Reagan National Airport just outside Washington, D.C. yesterday. Minutes earlier, he had pleaded not guilty to four federal charges that he plotted to overturn the 2020 elections. It's the third time in four months that Trump has appeared before a judge for criminal charges.
But the first time it's for something that happened while he was in office. Trump's next hearing in the case will be on August 28th, and a separate fourth indictment in Fulton County, Georgia could be on the way in the next few weeks.
Of course, the former president will be spending big on legal fees, and that's one reason he's burning campaign cash fast. But other candidates have even higher so-called burn rates and Axios' Stef Kight is here with the numbers and why they matter for this phase of the campaign.
Stef, can you start by explaining what exactly a burn rate is?
STEF KIGHT: Burn rate is how we measure how quickly candidates are spending the money that they're raising. And obviously when it comes to the long campaign cycle, they have to be careful that they're not spending too fast early on. And you kind of look at a couple things both the burn rate and also cash on hand, which indicates how much money they have in the bank ready to be spent over the long haul.
NIALA: Who's blowing through cash the fastest here?
STEF: So Senator Tim Scott, when you look at this point in the cycle, he has the, the greatest percentage of the money he's brought in has been spent. But you have to keep in mind that Scott already has a lot of cash on hand that he can then spend, and this comes from some of his Senate campaigns in the past, that he was able to transfer that money to his account.
But one candidate that people have pointed to pretty frequently is Ron DeSantis for his relatively high burn rate. Especially given the fact that he also heavily relies on wealthy donors. He doesn't have as strong small dollar donations to his campaign, which means that those wealthy donors could be reaching the max for donations earlier on, leaving him without that steady flow of cash incoming that he'll need to last through the cycle.
NIALA: How did DeSantis cash numbers match up with news of his campaign struggles he's been having in recent weeks?
STEF: Financial reports from the FEC have been one of the clearest indicators that his campaign is struggling. It made it clear that he doesn't have the strong grassroots support that you want to see. And it also showed that his campaign was burning cash fast, which led to the need for his campaign to, you know, let some of their staffers go and kind of reorient how they were going to approach the campaign. And of course, we also saw reporting and kind of backlash towards DeSantis over reports of him liking to fly on private jets as kind of an example of him maybe spending where he could be spending smarter.
NIALA: So that leaves us with former President Trump. Do we know how his legal woes are affecting his financial situation?
STEF: He's already spent tens of millions of dollars on legal fees. We're looking at the PAC that he uses the most often, started off at the end of last year with over a hundred million dollars cash on hand, and now it has less than four million cash on hand.
NIALA: Of course the former president has been heavily fundraising off of his legal woes, so what is his overall cash situation?
STEF: Former President Trump certainly has lots of money to spend both in his presidential campaign and with the numerous PACs that are backing him. And he also has significant backing from those small dollar donors, which again are a great indicator of the grassroots support he has. We reported earlier that about 82% of the fundraising Trump has done through his campaign came from these small dollar donors who gave 200 or less.
NIALA: Stef, what's your big takeaway from all of these numbers at this point in the campaign?
STEF: We're seeing so little movement in the polls, despite the tens of millions of dollars that have already been spent in this cycle.
NIALA: Stef Kight is part of Axios's politics team. Thanks, Stef.
STEF: Thanks, Niala.
NIALA: Hollywood and its writers are still on strike – and as time goes on, the economic impact is coming into focus for states that get big bucks from TV and film, like California, New York, and Georgia. As much as $250,000 can be injected into local economies per day when a film shoots on location, according to the Motion Picture Association. Here's where things stand by the numbers:
—In New York, the TV and Film industry represents 6.5% of the state's GDP and employs more than 185,000 people.
—In the fiscal year 2022, Georgia-made TV and film generated $4.4 billion for the state.
—And in California: the last time there was a writers' strike, back in 2007, the Milken Institute estimated almost 38,000 jobs were lost, and that the 100-day strike cost the state more than $2 billion.
In a moment: what struggling cities can learn from rebounding American downtowns.
Welcome back to Axios Today!
NIALA: Welcome back to Axios Today. I'm Nailah Boodhoo. We've talked about how American downtowns, the beating economic heart of any city, slowed way down because of the pandemic. But some have really since rebounded, potentially providing a blueprint for success for cities that are still lagging. Here to help us dig deeper is Alex Fitzpatrick, who covers business for Axios.
Alex, last time we talked about this, you mentioned Salt Lake City as a place that was doing really well. What are we seeing now in terms of other cities across America that have managed to recover?
ALEX FITZPATRICK: Well, Salt Lake City is still performing strongly, and another example of one that is is San Diego, California. Experts are crediting that to a mixture of things, mostly the fact that it's got a pretty diversified downtown. It's got a strong residential community, there are transient workers, but also, San Diego's really benefiting from an upswing in tourism.
NIALA: San Francisco, on the other hand, was having a hard time recovering its downtown. How's it faring now?
ALEX: It is faring not well. It is really like right at the bottom of these rankings based on foot traffic and that's being driven by a combination of things. First of all, you know, it's just an expensive place to live and it's also very dependent on tech workers who were able to, you know, go remote and go hybrid during the pandemic and really haven't come back. Interestingly, uh, nearby cities, Bakersfield, Fresno, are doing very well with downtown foot traffic. So there's a possibility that maybe some people have relocated there. It's very case by case and city by city.
NIALA: Alex, one hallmark of the pandemic was all of these empty office buildings. Are we seeing creative ways cities are trying to turn those empty commercial buildings into activity centers downtown?
ALEX: Yeah, office to residential conversions are super hot right now in cities across the country. Boston, Massachusetts actually has a really, uh, strong program where they're basically giving tax breaks of up to 75% for developers who are turning their office space into residential, which is significant and huge. So you know, we're still years away from those projects really becoming complete, in mass. That being said, I think there's a lot of optimism that that is one potential way to, reimagine these neighborhoods.
NIALA: Is there a bottom line to the story, you think?
ALEX: For cities that realize we need to do something to revitalize our downtown, to get people back here again, it's about diversification. You want people who live locally, but you also want to cater to some degree of transient workers. And you also want visitors, like visitors come to your city and spend a ton of money, and you get that sales tax revenue, right? All of those things are important and you have to redevelop in a way that gets all of that for you. Some good healthy portfolio of those things.
NIALA: Alex Fitzpatrick is the editor of Exus What's Next newsletter. Thanks, Alex!
ALEX: Sure. Thanks.
Before we go, one of my favorite ways to find unexpected reads is from book clubs. That's also the case for Brian Bannon, the Director of The New York Public Library, and when we asked him for his summer reading recommendation, he shared one of his latest book club finds. Trust by Hernan Diaz.
BRIAN BANNON: What I didn't realize after finishing the book is that he wrote the book here at the New York Public Library as a Coleman Fellowback in 2021. And it's a really fascinating novel takes place in like early 1900s and there's a financial tycoon and his wife that are sort of the top of New York society.
And the way in which he's researched this novel, for anybody who lives in New York or loves the city or has visited, it's a wonderful like window into that space and time because it's done as historical fiction. But the novel itself, it's told basically through these different perspectives, you know, around sort of the same period of time.
But it gets, all kinds of really interesting themes on wealth and power. But also just on the question of like trust and how do we know what is truth? And I think in the world that we live in today, that's one of the big questions that we're always thinking about is, what is fact, what is truth? And I think this story helps sort of bring to light sometimes truth resides in many different people's minds, but it looks very different. And it's a wonderful wonderful read.
NIALA: That's the New York Public Library Director, Brian Bannon recommending Trust by Hernan Diaz.
That's all for this week. Axios Today is produced by Fonda Mwangi, Lydia McMullen-Laird and Robin Linn. Our sound engineer and producer is Alex Sugiura. Alexandra Botti is our supervising producer. Aja Whitaker-Moore is Axios' Executive Editor. And Sara Kehaulani Goo is Axios' editor in chief. Special thanks as always to Axios co-founder Mike Allen.
I'm Niala Boodhoo. Stay safe, enjoy your weekend and we'll see you back here on Monday.