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Obama Campaign Spends Big On Postage, Taxes, And Insurance

Big overhead for a big operation. An investment in staff expected to pay off — as long as the money keeps coming in.

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President Obama's re-election campaign spent $1.1 million on postage. They campaign spent $874,000 on printing, $160,000 on rent, and more than $3 million on payroll, all part of making the Chicago-based operation the largest political campaign at this stage in American history.

The Chicago operation's seven-figure overhead reflects its expectation that it will also be one of the best-funded campaigns in American history, and its decision to invest heavily in building a campaign machine, spending cash early on field organizers rather than television advertisements. Obama for America, as the committee is formally known, had 592 campaign staffers on payroll at the end of March, and devoted at least 25 percent of its outlays to overhead alone.

While Mitt Romney's financial position at the end of March was superficially more precarious than the president's — the Republican blew through 77 percent of donations in order to put an end to his long primary battle — Obama is burning cash at the rate of 45 percent, before TV ads, through a combination of giant overhead and an early investment in online and offline fundraising.

Veteran operatives see the spending as a consequence of the campaign's heavy bet on field organizing.

"The stuff you do on the ground and with grassroots organizing requires the most prep and has the longest lead-time," said Jonathan Prince, John Edwards' deputy campaign manager in 2008. "You always need to be prepared to win a race that’s decided block by block, so [type of spending] is what you want to see to get ready for that."

Assuming fundraising picks up — freeing up more money to spend on television advertising — the share of overhead will likely drop significantly.

And the burn rate will remain manageable as long as fundraising goes as planned.

"What stands out is how low the number is given the campaign is a $750 million gross revenue business," said Steve Schmidt, a former Bush aide who became John McCain's campaign manager in 2008 after his predecessor burned through McCain's war chest. "It suggests that 80-plus percent will go to voter contact when this is over."

Unlike the Romney campaign, which had just 93 staffers at the end of last month, Obama long ago put his fundraising operation in high gear in preparation for the general election. Mitt Romney has devoted most of his energy and dollars raising the money needed to go on TV immediately to win the primary. It is only now that he has secured his party's nomination that he is expanding his staff — in conjunction with a heavier fundraising schedule.

The Obama campaign devoted over $6.7 million to online advertising in March — of which a substantial portion is designed to drive fundraising. A spokesperson for the Obama campaign declined to comment for this story.

Another mark of Obama's early investment in relatively junior field staffers: the average salary for an Obama campaign staffer is $46,241.44, while Romney pays his staffers $62,947.46 on average.