- The Washington Times - Monday, November 11, 2002

In what was perhaps an unguarded moment for DNC Chairman Terry McAuliffe, following the electoral drubbing President Bush and the Republican Party administered to his party Tuesday, the New York Times reported that Mr. McAuliffe "appeared staggered by the outcome." If the political trouncing weren't enough to stagger the normally loquacious Democratic chairman, a peek at his party's future financial prospects in the new era of hard money (contributions regulated and limited by federal law) surely would be.
To be sure, the newly outlawed soft money (those huge unregulated, unlimited contributions to parties from corporations, labor unions and wealthy individuals) will undoubtedly find its way back into the political process in some form. Nevertheless, there can be no doubt that the relative importance of hard money has soared as the McCain-Feingold campaign-finance reform law became effective the day after last week's elections. This will be particularly true for national party committees, which are now prohibited from raising and spending soft money. It is also a simple matter of arithmetic. While ostensibly banning soft money, the new campaign-finance law also doubles the hard-money limit from $1,000 to $2,000 that individuals can contribute to federal candidates per election. In addition, the aggregate hard-money contribution limit for an individual donor over a two-year election cycle will virtually double, rising from $50,000 to $95,000. Of this new amount, a maximum of $37,500 may be distributed among candidates; and $57,500 may be given to political action committees and political parties (PACs), of which PACs may receive a maximum of $37,500.
Largely due to a huge stable of small-dollar hard-money donors, Republican Party committees have long enjoyed a significant advantage over their Democratic counterparts. It was this large gap that Mr. McAuliffe has repeatedly pledged to bridge. In fact, the hard-money gap has gotten much bigger, even as the Democratic committees became ever more addicted to now-banned soft money.
The following figures relate to Federal Election Commission data compiled 20 days before the general election of each two-year cycle. During the last midterm cycle (1997-98), the three major Democratic committees raised $107 million in hard money, compared to $185 million for the three major GOP committees. The gap was less than $78 million. For the 2001-02 cycle, Democratic committees raised $127 million in hard money. Republican committees raised $289 million. The hard-money gap more than doubled, rising to $162 million for the current cycle.
Meanwhile, under Mr. McAuliffe, the Democratic committees have become far more reliant on soft-money contributions. In 1997-98, for example, soft-dollar contributions comprised 43 of total donations to Democratic committees. That proportion skyrocketed to 61 percent in the current midterm cycle. Republican reliance on soft dollars increased from 36 percent to 43 percent during the same period.
As a practical matter, Democrats essentially achieved parity with Republicans in the soft-money field. In fact, the Democratic Senatorial Campaign Committee (DSCC), headed by Sen. Patty Murray of Washington, actually raised nearly $20 million more in soft money this cycle (through Oct. 16) than the National Republican Senatorial Committee (NRSC). That permitted the DSCC to transfer much larger sums than the NRSC to the very close races in Minnesota ($7.2 million vs. $4.8 million), Missouri ($6.6 million vs. $5.7 million) and South Dakota ($6.3 million vs. $3.9 million).
At the same time, Democratic committees have fallen much farther behind in the race with hard money. After becoming addicted to soft money, rolling the dice in three big states and tossing snake eyes in two of them, while losing the Senate in the process, no wonder Mr. McAuliffe appeared to be staggered.

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