Flush with cash after a record-breaking fund-raising effort, the presidential campaign of Howard Dean is raising the stakes in Iowa and New Hampshire, where Dean victories could cripple a pair of major rivals.
Dean's team is increasing the number of field operatives in those states by 50 percent after reaping about $14.8 million for the quarter ending Sept. 30. In Iowa alone, the campaign is nearly doubling its staff.
The money that Dean raised during the quarter could be at least $10 million more than that raised by his closest Democratic rivals.
As a result, when official reports are filed with the Federal Election Commission next week, Dean almost certainly will show a healthy lead in the cash he has on hand for the runup to the Jan. 19 caucuses in Iowa and the New Hampshire primary eight days later.
Iowa is a virtual must-win test for Representative Richard A. Gephardt of neighboring Missouri. New Hampshire is equally crucial for Senator John F. Kerry of Massachusetts. Dean's staffing moves raise the stakes for both.
In Iowa, the Dean campaign says it is in the process of adding about 50 new organizers, which will increase the paid staff there to around 110, roughly double the Iowa payrolls of Gephardt and Kerry. The campaign also plans this month to increase from nine to 14 the number of its field offices in the state, said Sarah Leonard, Dean's spokeswoman in Iowa.
Meanwhile, in New Hampshire, Dean plans to add 10 more operatives, bringing the campaign's payroll there to 70 people, Karen Hicks, the campaign's New Hampshire director, said. The Dean operation will also open a 12th campaign office in the state, which is one-sixth the size of Iowa and less than half as populous.
Kerry's campaign countered last week, announcing it has hired nine more employees, six of them organizers, in the Granite State, increasing its presence there to 50 workers in 10 offices.
Gephardt's campaign declined to disclose the number of paid staff it has in Iowa. But Bill Burton, the campaign's Iowa press secretary, downplayed Dean's payroll advantage. Gephardt's deep support among organized labor, a sophisticated and potent force in caucus politics, will be more of a factor, he contended.
Rival campaigns say Gephardt's Iowa staff is the third largest among the Democratic rivals, slightly below Dean, now at 60 employees and growing, and Kerry, who has 57.
Meanwhile, the campaign of Senator Joseph I. Lieberman of Connecticut says it will make small additions to its staff in South Carolina, Arizona, and Oklahoma, all with primaries on Feb. 3, when the Connecticut senator hopes to break through.
There are two major reasons for Dean to spend heavily on staff in the early primary states, particularly Iowa, where many voters must travel great distances to participate at 7 p.m. caucuses in 1,997 precincts.
A strong organization can provide a decisive advantage in a close contest by identifying a candidate's supporters and making sure they get to the voting places.
A less obvious benefit is the fact that payroll costs are exempt from the individual state spending caps imposed by the Federal Election Commission on candidates who opt for public matching funds, which will become available Jan. 2.
Dean campaign manager Joe Trippi said the former Vermont governor doesn't need early knockouts of Gephardt and Kerry in New Hampshire and Iowa to improve his chances of winning the nomination. And Trippi brushed off suggestions by rivals that raising expectations in those states could boomerang and provide an added boost to Gephardt, if he beats Dean in Iowa, or to Kerry, if he prevails in New Hampshire.
Both were heavy favorites until Dean streaked past Kerry in a series of recent Granite State polls and pulled even with or ahead of Gephardt in most Iowa surveys.
"We're trying to win with a campaign in 50 states," Trippi said. "We continue to believe we are the campaign that can do that. I think some of the other campaigns may have to hunker down in one state and devote their resources there."
Dean's camp has flirted with the idea of bypassing public funding, which would free the campaign not only from state spending caps, but also a national cap that is expected to be set around $45 million by the FEC early next year. A decision by Dean may be months away, Trippi said. Kerry's campaign has said it might go the same route, but only to counter Dean if he does so first.
After last quarter's fund-raising haul, the Dean campaign had accumulated more than $25 million for the year. Kerry's campaign says his year-to-date intake will exceed $20 million.
Under FEC rules, candidates who agree to the spending limits receive dollar-for-dollar matches for the first $250 donated by each contributor. The Dean campaign, with its huge base of donors who give small amounts over the Internet, will be eligible for a "considerable" amount of matching money, Trippi said.
Among other factors, the Dean campaign will weigh the possibility that a Democratic rival or rivals could "blow the cap" in do-or-die states, Trippi said.
"You can't count on any of the other candidates staying within the cap," he said. "A lot of times, the candidate who's in a must-win state won't think twice about taking the fine [by the FEC] and blowing the cap," Trippi said.
The projected caps are $729,600 for New Hampshire and $1.3 million for Iowa. But under a complex FEC formula that exempts fund-raising and compliance expenses, actual limits will be about double those amounts.
Trippi didn't mention any particular opponents or states, but when Gephardt made his first run in 1988, his campaign blew by the cap in Iowa, spending more than double the limit on its way to winning the caucuses. The campaign was later fined $80,000 by the FEC for that violation and eight others.
In making a decision on public funding, however, Dean's campaign will also look beyond the party nomination contest, said Trippi. "Any thinking about opting out has a lot more to do with being competitive with George Bush than it does to a decision about the other Democrats," he said.
Bush's fund-raising dwarfs that of Dean and the other Democrats.
Campaign officials have said the president will report more than $48 million for the quarter, surpassing $80 million to date and putting the campaign roughly halfway to a goal of $150 million to $170 million by early next year.
By some estimates, Bush could have more than $100 million on hand when the Democratic nominee emerges, probably in late winter.
Since the Democratic nominee's treasury would be depleted by then, Bush would have an enormous financial advantage in the months before the party conventions, when the Democratic and Republican candidates will receive an estimated $74.4 million in FEC funds for the general election campaign.
An abundance of money is a luxury but guarantees nothing. In 2000, Bill Bradley raised $27 million but failed to beat Al Gore in a single Democratic primary. In 1996, Republican Phil Gramm had more than $20 million to spend and dropped out after a fifth-place finish in the Iowa caucuses.
If a decision on taking public funds for the primaries poses a dilemma for the Dean campaign, it is one that was unimaginable back on Jan. 31.
"We were at seven people and had $150,000 in the bank," Trippi said.
Raja Mishra of the Globe staff contributed to this report.