Democrats are in a funk over their 2004 prospects, but for the wrong reasons.

The nation remains a 50-50 nation. The presidential election is set to be a 50-50 toss-up.

Democrats are passing through what in retrospect will look like a predictable period of chaos. But once one of their candidates emerges with the megaphone next March, this 50-50 dynamic will reassert itself. President Bush is no sure thing in this context, as Republicans know.

“Bush is a strong flavor,” one top GOP consultant told me – you either like him or you don’t, and if you don’t like him, you really don’t like him.

The real problem Democrats should be worried about is that their nominee will emerge next spring dead broke, having spent every penny they have to win the nomination. At that point the GOP will begin an advertising juggernaut with President Bush’s record-breaking $200 million war chest, blasting the Democratic leader from April to August as some tax-loving peacenik.

Bush’s bankroll is made possible, it should be recalled, by the McCain-Feingold campaign reform law, which raised the amount donors could contribute from $1,000 to $2,000. This means Bush will double the take from his legendary fund-raising network.

It’s a simple rebate from wealthier Republicans, who have received perhaps $100,000 in annual relief from Bush’s tax cuts, and who are thus perfectly happy to give the president a small commission in return.

(The moral: Raising this donation limit and scrapping unregulated “soft money” would have been fine, but only if combined with public financing for less well-heeled candidates. Without this, McCain-Feingold, despite the hype, was never anything but the George W. Bush Re-election Act, as Mr. Bush understood when he signed it with a smile.)

What’s desperately needed is some force that can counterbalance the lavishly funded GOP advertising caricature from April to August next year, when the Democratic nominee will get the public funding to compete in the general election.

My nominee for this role is a major strategic public education campaign by America’s center-left foundations – an effort that in a nonpartisan fashion can make the case for why (to cite but one example) insuring America’s 40 million uninsured is a perfectly rational and achievable goal, not some communist plot, as the GOP will paint it.

Picture Warren Buffet in a TV ad saying, “Basic health coverage for every American isn’t some crazy liberal idea – it’s a common sense investment,” and you have an idea of what I mean.

The problem is that the big center-left foundations – the Carnegies, Fords and Hewletts of the world – tend to be uncomfortable with such advocacy. They’re happy to fund projects that help poor children, for example, but shrink from engaging on larger questions of tax and spending policy that would affect such causes on a national scale.

“They’re not prepared for the kind of criticism and warfare that can occur when you try and play any kind of role in these super-charged issues,” says Drew Altman, president of the Henry J. Kaiser Family Foundation, a health care-oriented foundation that has staked out an ambitious public role. “They still think in the end that they’re funders supporting good works and they should be loved for that. Well, you’re not going to deal with health reform and be loved.”

One way this timidity manifests itself is in misplaced caution over legal limits on foundation-funded advocacy. But it’s a myth that there are profound legal obstacles here.

After speaking at a conference in 2002 on this subject, Douglas Varley, a leading lawyer in the field, marveled at “the number of folks at big foundations who should know better who were saying, ‘My God, I didn’t know we could fund any of that kind of stuff. I thought where policy was involved, it was prohibited.'”

That’s simply wrong, Varley told me. Conservative foundations have moved national debate while operating within the same legal framework for years.

It’s not as if center-left funders have no successes to build on when it comes to the war of ideas; indeed, a generation ago these foundations helped change public discourse in areas from the environment to civil rights.

It’s time these funders developed a strategy for the critical period from April to August 2004. It’s only fair, after all – most of them backed the McCain-Feingold reforms that guarantee next year’s progressive “megaphone gap.”

If they don’t step into the breach, who will?

Matt Miller is a syndicated columnist. His e-mail address is:

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