As election approaches, candidates beef up spending

WASHINGTON Sat Jul 21, 2012 1:38pm EDT

U.S. Republican presidential candidate Mitt Romney speaks at a Victory town hall in Bowling Green, Ohio, July 18, 2012. REUTERS/Matt Sullivan

U.S. Republican presidential candidate Mitt Romney speaks at a Victory town hall in Bowling Green, Ohio, July 18, 2012.

Credit: Reuters/Matt Sullivan

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WASHINGTON (Reuters) - Less than four months until the U.S. presidential election, Republican candidate Mitt Romney's campaign is beefing up on personnel and investing more cash internally as outside groups pour millions into television ads to help him counter Democratic President Barack Obama's messaging over the airwaves.

Obama's spending still dwarfs Romney's June outlays, with two-thirds of it going toward advertising, but federal disclosures filed on Friday show the Republican candidate investing more in his campaign's infrastructure, something Obama did months ago, as the race has been stuck in a dead heat.

Obama's campaign doled out $58.1 million in June, nearly twice as much as he raised, Friday's filings showed. Facing no competition within his own party, Obama got an early start on ad buys, framing his Republican challenger negatively.

Romney's campaign spent $27.5 million in June, nearly double the $15.6 million it spent in May and $12.6 million spent in April, when Romney first emerged as the presumed Republican presidential nominee.

Romney spent less than half of his June haul on advertising, Reuters analysis of filings showed.

The internal spending uptick was expected as campaigning heats up in earnest, but it raises concerns of burning through cash on expenses that are not direct outreach to likely or potential voters - something Republicans had repeatedly pointed out about Obama's spending trends earlier this year.

Now, the scale appears to be leveling as Romney added 125 new paid staff members in June for a total of 272 and spent $491,088 more on their salaries for a total of $1.3 million. He also spent nearly $440,000 on office supplies, furniture, equipment and other infrastructure buildup and equipment and $9.7 million on various consulting services.

Obama's campaign added 76 new paid staffers in June for a total of 779, paying them $2.8 million.

LAW'S LIMITATIONS

One hurdle for Romney is a provision of the U.S. campaign law that prohibits some funds from being spent until he is officially nominated at the Republican convention in late August.

Campaigns are allowed to accept up to $5,000 from one donor, but only half of that can be spent before the convention.

Romney's campaign has reported having about $850,000 walled off to be available only for use after the convention. He also has a joint fund with the Republican National Committee that presumably has millions set off for the general election but filings so far have not clarified how much exactly.

Romney's aides say the rule has put him at a disadvantage because Obama ran for re-election unopposed and Romney spent millions on a bitter fight against rival Republicans.

Obama has $7.8 million set aside for the general election.

"We ... spent most of our primary dollars on the primary," Romney told the Toledo Blade newspaper in an interview this week. "There are just many places we can't afford to be running ads. So we are massively outspent by a President that had no primary. And we are able to both shift into general election funds after our conventions, and we will be able to be more competitive, and you'll to see more of us as that occurs."

In June, Romney's campaign received $24 million in donations and had $22.5 million in cash on hand, while Obama's campaign received $28.1 million and had $97.5 million left in the bank.

Both campaigns also rely on separate multimillion-dollar war chests held by the national parties and funds shared with them. All told, Obama and his allies have far outraised Romney, but the Republican and his party have more in cash on hand.

'SUPER PAC' HELP

Obama's TV advertising spending has been effectively balanced out by Republican Super PACs, predominantly American Crossroads and the pro-Romney Restore Our Future.

Obama and Priorities USA Action, the outside "super" political action committee helping the president, have spent the past several weeks pummeling Romney's past as a private equity executive and painting him as an out-of-touch rich man.

Priorities earlier this week bought $4 million worth of ad time in three swing states.

Restore Our Future spent $7.2 million on ads that will run in 11 states from the end of July through August 9, while American Crossroads is spending $9.3 million on ads in nine states, defending Romney from the Democrats' attacks on his business record.

The Obama campaign earlier this week started airing a new ad raising questions about why Romney, a millionaire, will not release more of his tax returns.

Republicans for months have been pointing to Obama's rate of spending - for two months in a row now he's spent more than he has raised - calling it unsustainable.

"I trust the Obama campaign, who ran a pretty good campaign four years ago, that they can do it this time around," said Barry Goodman, a Michigan fundraiser who together with his business partner has "bundled" more than $500,000 for the president's re-election campaign.

"They must feel comfortable that they can raise more."

In 2008, Obama set a fundraising record of $750 million hauled in, but this year his campaign has been sounding alarms that thanks to deep-pocketed Republican outside spending groups, Obama could be the first ever incumbent to be outspent.

(Additional reporting by Patrick Temple-West; Editing by Todd Eastham)

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