There’s a Hole in the Bucket of Election Matching Funds

The fund that provides presidential candidates with public money to finance their campaigns is so depleted that the current crop of White House contenders will not receive some of the cash until 2001--perhaps after the next president is sworn in.

The funding delay will cause headaches for the candidates, especially cash-starved underdogs, as they jockey for position in presidential primaries that are squeezed together as never before.

The delay will also increase the advantage of those candidates who opt to forgo federal matching funds and their requisite spending limits--such as multimillionaire publisher Steve Forbes and, possibly, Texas Gov. George W. Bush.

“We face the most serious shortfall that we have ever faced since the public financing system was established in the 1970s,” said Anthony Corrado, a campaign finance expert at Colby College in Maine.

The matching fund program, supported entirely by taxpayer contributions, aims to clean up presidential campaigns by replacing special interest contributions with government money. The fund pays for the Democratic and Republican conventions. It also fully funds candidates’ general election campaigns, which doesn’t include massive spending by the political parties.

After estimating the cost of the conventions and general election campaigns, election officials dole out whatever is left for the primaries.

A major cause of the shortfall is that fewer and fewer taxpayers are checking “yes” on their income tax returns, which sends $3 of their tax money to the presidential fund.

Making matters worse is the large number of candidates, their beefed up fund-raising efforts and the fact that--unlike the situation in 1996--both the Democratic and Republican nominations are contested.

Ten candidates are vying for the GOP nomination, while former Democratic Sen. Bill Bradley is amassing considerable funds to take on Vice President Al Gore.

The Federal Election Commission says it will have enough to finance the parties’ political conventions, which will cost a combined $28.9 million. The Treasury will dole out an estimated $147.2 million for the eventual Democratic and Republican nominees.

But when it comes to the primary candidates, the fund will run dry during the crucial early months of 2000. Candidates will receive only about 32 cents for every dollar to which they are entitled, federal officials estimate.

Candidates say they will get around the lack of government money the same way White House contenders did during a less severe shortfall in 1996--by getting bank loans until the matching funds come through.

But the candidates will suffer more than their ’96 counterparts, who waited several months for the matching money. In 2000, full funding for primary candidates may not be available until March 2001.

The biggest casualty of the long delay may be the public financing system itself. By the time of the next presidential election in 2004, some officials predict, there may not be enough matching funds left to pay primary candidates a dime.

Trevor Potter, a past FEC chairman, said distaste for the public financing is so strong among most Republicans that the chance of congressional intervention is somewhere between “zero and tiny.”

Forbes, an opponent of public financing, is the only candidate so far to declare that he will reject matching funds. But aides to Bush say they may opt to take the same route in the fall if the campaign’s war chest is flush.

By turning down matching funds, candidates can sidestep limits restricting candidates from spending more than $50,000 of their personal funds and from exceeding state and national caps based on population.

Launched in 1976 in the aftermath of Watergate, the matching-fund program was designed to reduce candidates’ dependence on large contributions. But the program has failed to deter candidates from using legal loopholes to siphon huge sums--such as unlimited “soft money” contributions to political parties--into their campaign efforts.

The number of taxpayers opting to contribute to the fund--which does not increase their tax burden--has declined significantly from a high of 28.7% in 1981 to an estimated 11% last year. Congress in 1993 increased the checkoff amount from $1 to $3.

So far, three of the White House contenders have sought matching funds--former Vice President Dan Quayle, conservative activist Gary Bauer and Bradley.