Public financing troubles

July 12, 1999|By Jack W. Germond and Jules Witcover

WASHINGTON -- Texas Gov. George W. Bush's rivals for the 2000 Republican presidential nomination, already reeling from the disclosure that he has raised more than $36 million, face another money setback that can be attributed indirectly to his father, former President George Bush.

The senior Bush's Treasury Department laid down a ruling in 1991 that will put an additional squeeze on all the other GOP hopefuls except self-financing multimillionaire Steve Forbes. It decided, whether by political calculation or otherwise, to adopt a payout schedule of the federal subsidy to candidates under the 1974 campaign finance law that will deny them much of the money for which they've qualified at precisely the time they will most need it.

The law stipulates that the subsidy be paid starting Jan. 1 of the presidential election year on a dollar-for-dollar matching basis for funds raised in amounts of $250 or less during the previous year. A candidate who raises $5 million that way in 1999, for example, will be eligible for another $5 million from Uncle Sam on Jan. 1. The subsidy comes from the taxpayer voluntary $3 checkoff on annual individual income-tax returns.

With more than half primary and party caucuses scheduled before the end of March, it is critical for the candidates to get the money to which they are entitled at the earliest possible time.

Prior to 1991, the Treasury Department made available enough money for all the competing candidates to receive all they were due on the first of January of the election year, by the simple device of making a conservative estimate of how much the checkoff would yield by the next tax return deadline of April 15.

But the Bush administration ruled in 1991 that from then on, the payout could be made only from funds actually taken in from the checkoff by Jan. 1, with the fund to be refurbished as more money came in. Taxpayers were originally asked to volunteer $1 for the candidates' pool, but Congress raised the amount to $3 in 1993 because only 28 percent of taxpayers were checking off.

Now, according to Federal Election Commission Chairman Scott Thomas earlier this year, the FEC will be able to give each qualified candidate only 32 cents of each dollar he has "earned" under the law's matching formula.

In 1996, when a similar "shortfall" faced the candidates, they were obliged to seek bank loans against their expected later federal subsidy payouts. Most of the current crop of presidential candidates will have to do the same unless President Clinton orders his Treasury Department to revert to the old method of calculating the subsidy pool on the basis of estimated new tax revenues.

While he might be favorably disposed to helping the Republican challengers to Governor Bush, it's questionable that Mr. Clinton would want to give a hand at the same time to Democratic candidate Bill Bradley, who is challenging Vice President Al Gore.

Although Mr. Gore is well ahead of Mr. Bradley in fund-raising -- $18.5 million reported by the Gore campaign to $11 million by the former New Jersey senator -- Mr. Bradley's fund-raising success has been a surprise, and a full federal transfusion of the subsidy to which that success would entitle him on Jan. 1 would make him even more of a threat to Mr. Gore.

In any event, as George W. Bush continues to stack up his campaign chips, the others find the federal subsidy system that is supposed to be their lifesaver also working against them.

Jack W. Germond and Jules Witcover write from the Washington Bureau.

Pub Date: 7/12/99

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