ABOVE the flags and bunting, the cheers and camaraderie of the 1992 Democratic National Convention looms a dark, worrisome cloud: What happens if the party's presidential ticket finishes in third place in the November elections?
Worse yet, what if the ticket of Bill Clinton and Al Gore to be crowned Thursday night in New York City gets less than 25 percent of the nationwide popular vote - the minimum needed to be considered a "major party?"
The danger is real for the Democrats this year. If Clinton-Gore stumbles, if a major gaffe takes place during a presidential debate, and if Ross Perot keeps going up in the polls, the world's oldest political party could finish dead last in a three-way race.
The effects could be devastating, financially and politically.
Getting less than 25 percent would flatten the party's bank account, unless the laws are changed.
Because they are currently considered "major parties," both the Democrats and the Republicans get an automatic federal grant this fall of $55 million to run their general election campaigns.
Dropping below 25 percent would mean no automatic federal payment for that party in the 1996 presidential election, according to officials at the Federal Election Commission. It would mean the end of millions more in federal subsidies for the quadrennial national convention.
Jeffrey Bell, a Republican and author of a new book, "Populism vs. Elitism," says the Democrats are in much greater danger of finishing third than the GOP. And he warns: "If that happens, it's often been a precursor to a party going out of business."
Bill Clinton's presidential campaign, which grows out of the moderate wing of the Democratic Party, seems well aware of the dangers. The Arkansas governor, beginning with his prominent role in the Democratic Leadership Council, has tried to tug the party back toward the political center, where most Americans are.
Even his choice of three keynote speakers - rather than the traditional single keynoter - signals that Democrats will try harder in 1992 to reach out to the entire electorate.
One speaker, former US Rep. Barbara Jordan, is black. Another, Gov. Zell Miller of Georgia, is from the Deep South, where white voters have been abandoning the Democrats. The third, Sen. Bill Bradley of New Jersey, represents the Northeast, a redoubt of Democratic power.
A number of analysts blame the leaders of both the Democratic and Republican parties who run Congress and the White House for the current state of affairs, in which many voters seem almost anxious to abandon both major parties.
Gordon Black, a well-known pollster, says: "The government of the United States has succeeded in alienating between 60 and 75 percent of the voters in this country."
He explains: "More than three-quarters [of Americans] believe that Congress is bought, paid for, and owned by PACs [political action committees]; that money has so dominated the political process that they have no role in it any longer, and their right to choose has been taken away from them."
Theodore Lowi, a political scientist at Cornell University in Ithaca, N.Y., says the current level of political discontent is "unprecedented in the 20th Century."
Dr. Lowi suggests that if Mr. Perot, the Texas billionaire who is expected to run for president this fall, plots his course wisely, he could be at the forefront of a new, powerful, third political party.
The new party, championing a balanced budget and campaign reform, could gain majority support by pulling moderate voters away from both Democrats and Republicans, Lowi says.
He continues: "There is a dirty little secret that sophisticates have been hiding from the masses for three or four decades. The secret is that the two-party system is dying. [It] has failed to make the adjustment to the requirements of modern, 20th-Century democratic government."
Such warnings may be drowned out in the noisy hoopla of the Democratic convention. After years of preparation, this is the supreme achievement in the long political careers of Governor Clinton and Senator Gore.
With a difficult struggle just ahead, they enter Madison Square Garden together on Thursday night knowing, as Charles Dickens might have observed, that "it was the best of times, it was the worst of times...."
Only if they run a brilliant campaign, overcoming great odds, will this become "the spring of hope" rather than the "winter of despair" for the beleaguered Democrats.