Irony: DSCC took out loan to buy house while losing the Senate

The DSCC left Mary Landrieu in the lurch after Election Day, and most observers understood why. The Democratic Party organization had put itself in debt trying to protect its doomed Senate majority, even though it outraised (and outspent) its Republican counterpart. What we didn’t know was the scope of that debt — or what contributed to it. According to Politico, the DSCC went $20 million in the hole and may have problems competing in 2016 as a result:

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The Democratic Senatorial Campaign Committee is stuck with $20.4 million in post-election debt, more than twice the debt owed by its Republican counterpart and a challenge for the party as it heads into the next cycle.

The atypically high figure helps explain why the DSCC spent no money on advertisements for Sen. Mary Landrieu during the Louisiana runoff, though few expected the Democratic incumbent to be able to overcome her deficit in the polls.

The DSCC publicly disclosed in October that it had taken a $10 million loan to try salvaging Democrats’ Senate majority in the midterms. But fresh filings with the Federal Election Commission show that the committee took out another, previously unreported $5 million loan in the final days of the election.

What did that last-minute loan get Democrats? Not much, and that may be another reason why the DSCC figured that it didn’t make much sense to go even more in the hole for Landrieu, who was doomed. She only barely outperformed her Election Day percentage, moving from 42% to 44% in the runoff as her opposition coalesced around Senator-elect Bill Cassidy. Why throw good money after bad?

It was that kind of thinking that put the DSCC in the hole from the beginning, though:

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But aside from its usual operations spending, the Senate Democrats’ campaign arm also made a major investment this year that added to its overall debt.

In May, the DSCC took out a long-term loan of $5.2 million to buy a house adjacent to its headquarters on Capitol Hill. The DSCC had leased the Mott House for 11 years and decided it made more financial sense to purchase it.

Er … what? That may have made sense in 2006, 2008, or perhaps even 2012, when Democratic fortunes looked a lot rosier than in 2014. Everyone — or maybe everyone but Harry Reid, according to his own account — knew that the Grand Old Party would have a grand old time in the midterms, thanks to the plummeting polling for Barack Obama. Sixth-year midterms are almost always a bloodbath for the party controlling the White House, and the only question would be whether they could contain the damage enough to force a tie that Joe Biden could break. The obvious financial decision should have been to continue paying the lease as expense rather than take on an asset with a hefty mortgage until better days arrived.

Even by May, Democrats knew that they had all but lost three of the six seats needed by Republicans to wrest control of the Senate from Democrats. In fact, that desperation was a key strategy in their fundraising. They hammered their constituents right up until the last minute with prophecies of doom unless they kicked in as much extra cash as they could muster. I wonder how those donors feel now, knowing that the DSCC was buying a $5.2 million mansion while claiming poverty and desperation for months?

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It’s ironic, though, to know that the Democrats were buying a house while failing to buy the Senate.

The debt isn’t the reason why Democrats got clobbered, Philip Bump reminds us:

Is there any link between how much a committee goes into debt — reflecting, one assumes, fundraising difficulties — and its performance?

Not really, no. Since 2000, the four party committees focused on Congress (the DSCC, the Democratic Congressional Campaign Committee, the National Republican Senatorial Committee and the National Republican Congressional Committee) have seen increasing levels of post-election debt, but it’s not reflected in the Election Day results. …

There are trends in politics that are bigger than money can buy — the Republican waves in 2010 and 2014; the Democratic sweep in 2006. In times like those, the opposing parties are likely to do poorly no matter how much they spend. As we have seen.

That’s true, and it also demonstrates that all of the shrieking about money in politics is overblown to the point of paranoia. (We spend twice as much on Halloween candy and costumes as we did on the midterms, for instance.) Money wasn’t going to save Mary Landrieu in the runoff, and it didn’t help the Democrats even in states they assumed were close. It provides an edge, and can be contributive, but money is rarely determinative. Just ask Sean Eldridge and Chris Hughes how it worked out in the Congressional race.

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David Strom 11:20 AM | April 24, 2024
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