Just when the candidates need money, Uncle Sam is ready with IOUs

THE BALTIMORE SUN

WASHINGTON -- The seven Republican presidential candidates who have qualified for the election-year subsidy under the federal campaign-finance law have just learned that they will have to take IOUs from Uncle Sam for a while.

Five active candidates -- Lamar Alexander, Pat Buchanan, Bob Dole, Phil Gramm and Dick Lugar -- and two who have already folded their tents -- Arlen Specter and Pete Wilson -- have been told by the Federal Election Commission that the federal campaign fund is about $15 million short of what's needed to give them their full entitled amounts on January 1.

This is so although the source of the subsidy, the voluntary checkoff on individual income-tax returns, has been increased from $1 to $3 since the 1992 election. Eventually there will be enough money to give the candidates all the funds coming to them. The problem is an Internal Revenue Service requirement that all the money to be disbursed under the law for the major-party conventions and their nominees in the fall campaign be set aside first, before the candidates in the primaries get their cut.

Enough money will come in from income-tax returns by the time of the conventions and the general election to pay for those aspects of the 1996 campaign. But the IRS has turned down a request from the Federal Election Commission that the convention and general election money be parceled out later.

The checkoff funds trickle in slowly at this time of the year because people are not filing their tax returns yet. But a front-loading of delegate selection -- 29 of the 42 Republican primaries plus four caucuses occur in February and March -- has led to unusually high early applications for the subsidy.

The law provides a federal payment of one dollar for every dollar of the first $250 raised from an individual contributor in the year before the election year or during it. So 1995 has been marked by very aggressive fund-raising to get the subsidy early enough to use in the unprecedentedly early concentration of primaries.

Hardest hit by the shortfall will, obviously, be those candidates who have lagged in fund-raising generally. Senator Dole, who is entitled to $9.2 million, has raised enough without the subsidy to maintain the advantage he already has as the front-runner. Senator Gramm, who has qualified for $6.7 million, has been an impressive fund-raiser, too, but he has been such a heavy spender that he recently put out an "emergency" plea for contributions.

Tighter bind

Others, like Mr. Buchanan, who is entitled to $4.1 million, Mr. Alexander ($3.2 million) and Mr. Lugar ($2.3 million), will be in a tighter bind without the full early federal transfusion.

Another wrinkle in the subsidy-payout system hurts the Republican candidates. President Clinton, who faces no primary opposition, nevertheless has qualified for $9.8 million to use in the primary season. Whatever money he does get won't be available to the competing Republicans. It is not a partisan matter; in 1984, President Reagan got his share of the federal subsidy although he, too, had no primary challenge. So did President Bush in 1992 although he faced only a pesky challenge from Mr. Buchanan.

Mr. Clinton, as Messrs. Reagan and Bush before him, will be able to use the subsidy for the primary period to get an early jump on organizing for the fall campaign, not exactly the prime purpose of the campaign-finance reform when first enacted in 1974.

There appears to be no practical way to prevent this handout to a candidate who has no serious challenge in the pre-convention period. If there were such a prohibition, it might well lead to the encouraging of contrived, phony opposition to an otherwise unopposed candidate, to qualify him for the subsidy.

The Republican candidates who will have to wait for their full subsidy allotments shouldn't have great trouble getting bank loans. The impending payments should be sufficient collateral, but they will have to pay interest on the loans. Again, the financial have-nots will be hurt most. The sensible solution is to postpone the allotments for the conventions and the fall campaign until late spring, and pay out in January the funds the primary candidates need then.

Jack W. Germond and Jules Witcover report from The Sun's Washington bureau.

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