Newt's Money Woes

The Daily Beast, Tuesday, February 14, 2012, 2:21am (PST)

By Ben Jacobs

Is it time for Newt Gingrich to drop out? In an editorial published yesterday, National Review, the leading organ of the conservative movement, said the time has come for the former House speaker to leave the GOP presidential race. This editorial is a gut punch to an already staggering campaign.

In the three weeks since the South Carolina primary, Gingrich's stock has plummeted. Coming out of the Palmetto State, he “sounded really bad” in the two debates that preceded Florida, according to GOP analyst and Daily Beast contributor Rich Galen. The veteran pol may have been “sick, tired, or [just] thought he could wing it,” says Galen, but these dud performances sent his campaign into a spiral from which it has not yet emerged. And as Newt's electoral fortunes have flagged, so have his finances. Although he has eight separate fundraisers scheduled this week in California, he will be hard pressed to match Rick Santorum, let alone Mitt Romney, in raising money.

Gingrich's quandary is that while he needs to be more successful in states holding upcoming contests in order to raise money, he can't be successful without having the necessary funds to compete. The beleaguered candidate does have one opportunity to grab attention in the meantime—the Feb. 22 debate in Arizona. Mark McKinnon, former adviser to President George W. Bush and now a Daily Beast contributor, says Gingrich does not just have to do well at the debate, but “absolutely dominate [it]. He has to own it lock, stock, and barrel. Perhaps roll out a truly transformative idea”—preferably, McKinnon suggests, “something earth-based,” a gibe about Gingrich's much-mocked proposal for a moon colony that he unveiled in Florida.

Galen, however, thinks that not even a strong debate performance is enough. In his view, Gingrich is in dire enough straits that a “three-bank shot” is needed. The former House speaker must pair a decisive win in the debate with a Santorum implosion—a combination of a major gaffe by the former senator from Pennsylvania and a strong enough performance by Romney in both Michigan and Arizona “to choke off Santorum's money.” The task of “clawing his way back into the race” is very tough, and Gingrich just needs to hope that "somebody else mak[es] such a dreadful mistake that he gets to climb back in,” Galen says.

Both Gingrich's campaign and the super PAC supporting it, Winning Our Future, are optimistic. R.C. Hammond, the campaign's spokesman, said, “With over 160,000 people donating to the campaign and growing each week, we are in very good shape.” The senior strategist of Winning Our Future, Rick Tyler, said, “Everything is going fine.” He did admit that “we could always use more money, but that's always the case.” The super PAC is “focus[ing] more aggressively in the zone between $2,500 and seven figures,” Tyler said. “[We're] more aggressive on hitting that zone, focusing messaging-wise more on the grassroots aspect.”

But while Gingrich's campaign and Winning Our Future continue to plug away, it's clear that certain elements of the GOP donor base will never warm to the speaker. John Catsimatidis, a major Republican donor and Romney supporter from New York, says Gingrich is unelectable. In his estimation, “Newt Gingrich can probably only achieve 47 percent [and] not get the moderates and independents in the middle” needed to win a majority. To Catsimatidis, New Yorkers like him “are basically moderates, and they believe Mitt Romney is good for the business world and that he won't do anything stupid.” In contrast, he says, Gingrich is unreliable, and donors are “backing away from him.”

If Gingrich starts to win primaries again, particularly on Super Tuesday, March 6, donors may change their minds. Although Santorum's campaign has achieved significant success in the past week, the Pennsylvanian's campaign has failed to gain any traction in the two primaries held in the South so far. Gingrich dominated in South Carolina and northern Florida (which is far more Southern in its demographics than south Florida). With upcoming contests in Georgia, Tennessee, Texas, and Oklahoma, all states that are culturally Southern, Gingrich could erect a firewall to protect his flagging campaign. While optimistic Santorum supporters such as former congressman Tom Tancredo believe Newt is history, it is unlikely that the erstwhile historian's campaign will vanish so quickly.

The outlook for Gingrich is grim, however, if he can't reclaim the momentum and turn around his fundraising. There may indeed be better days ahead, but with the next debate more than a week away and the candidate forced to frantically raise money rather than campaign, things most assuredly will get worse in the short term.