The power behind the tax cuts

In a brief period of two years, the right wing ideologues who control the federal government have been able to ram trillion-dollar tax cuts through Congress in 2001 and again in 2003, reduced a budget surplus to a deficit, and increase military spending while cutting spending for social programs. By their standards, quite an accomplishment. And the question becomes: How were they able to get away with it?

In the first place, they?ve been at it for a long time. Second, they?ve had a lot of help from a collection of deep-pocketed right-wing groups that are out to drastically limit the role of government. For these organizations, tax cuts are a matter of uncompromising dogma to which the White House is both ideologically and politically committed.

Featured prominently in the coalition are figures like Grover Norquist, who believes it is ?never a bad time to have a tax cut? and dreams of getting our government ?down to the size where we can drown it in the bathtub.?

A briefing paper published by People for the American Way (PFAW) provides an overview of five influential groups ? Americans for Tax Reform, the Heritage Foundation, the Cato Institute, Citizens for a Sound Economy, and the Club for Growth ? and the role they play in the current campaign and how they add an essential dimension to the push for massive regressive tax cuts.

All five groups share an agenda that is not only anti-tax, but also anti-government and pro-privatization of public services. However, each group plays to different strengths.

Americans for Tax Reform is an inside-the-beltway operation that excels at building and maintaining political coalitions among politicians, industry groups and other right-wing interest groups. The Heritage Foundation and the Cato Institute are ideological think tanks, churning out policy papers and providing the marketing might for right-wing policymakers. Citizens for a Sound Economy drives the field operation and finally, the Club for Growth is the uncompromising enforcer which targets wavering politicians, including Republicans deemed insufficiently committed to tax-cut dogma.

Americans for Tax Reform

In the battle to win approval for President Bush?s proposed tax cuts, Grover Norquist, president of Americans for Tax Reform (ATR), is the general leading the charge.

ATR was founded in 1986 when Norquist was tapped to head the group as an in-house operation to build support for the 1986 tax reform bill. In 1999, it spent $4.2 million on a television ad campaign touting the GOP tax plan. In the weeks before the 1996 elections, ATR flooded 150 congressional districts with mail and phone calls. This impressive display was made possible by a last-minute $4.6 million donation from the Republican National Committee.

Launched in 1993 to battle President Clinton?s health care plan, Norquist?s weekly Wednesday meetings pull together a wide range of groups ? right-wing think tanks, the National Rifle Association, the Christian Coalition, property rights groups and others ? to strategize on issues that have included supporting conservative ballot initiatives, abolishing affirmative action and killing the National Endowment for the Arts.

For Norquist, cutting taxes is closely tied to his real goal of cutting government. As he said in an interview with Human Events magazine: ?Every time you cut programs, you take away a person who has a vested interest in high taxes and … make him a taxpayer. A farmer on subsidies is part welfare bum, whereas a free-market farmer is a small businessman with a gun.?

Heritage Foundation

Kim Holmes, vice president of the Heritage Foundation, claims ? and rightly so ? to have set the standard for ideological think tanks over the past two decades. As she puts it: ?[W]e?ve in effect become Congress?s unofficial research arm … We truly have become an extension of the congressional staff, but on our own terms and according to our own agenda.?

The group claims to have ?improved? Bush?s 2003 tax-cut plan and helped inspire several of Bush?s initiatives, including faith-based welfare initiatives, personal savings options for Social Security, ballistic missile defense, and education reform. Its influence on the budget started even before Bush?s inauguration when it delivered a ?Budget for America,? aimed at limiting ?the overall growth of government while providing for needed increases in defense spending.?

In early 2003, Heritage?s Dan Mitchell said he was ?absolutely delighted? with the Bush economic plan. As its contribution to the public debate on the plan, the Heritage economics team created an online ?briefing room? to provide a point-by-point counter to the arguments made by tax cut opponents.

Heritage gave an especially telling example of the Center?s influence in its 2001 annual report. ?When President Bush asked the Treasury Department to analyze the impact of his tax plan ? he was told it would take Treasury?s analysts weeks to produce the data.? The White House staff turned to Heritage?s Center for Data Analysis for assistance and it was able to produce the needed information in a matter of days.

Cato Institute

Where the Heritage Foundation is solidly grounded in the ideology of the modern right-wing political movement, the Cato Institute brings a different, but equally radical, view of government to the table. Although the institute, a libertarian think tank, works with right-wing groups on a wide range of issues, it diverges on social issues like censorship, gay rights, and drug prohibition.

Cato has criticized the Bush administration far more than the others; it praised Bush?s move to make the tax code less progressive, saying he was proposing meaningful tax reform that ?will … move us closer to a simple and fair flat tax.? Yet Cato has also strongly criticized Bush?s 2004 budget plans, calling the president?s spending ?out of control? and pointing out that he is outspending President Clinton.

Two lesser groups round out the gang of five discussed in the PFAW report.

Citizens for a Sound Economy

Citizens for a Sound Economy (CSE) coordinates the ground troops for the tax cut movement. From deregulation to Social Security, CSE pushes an agenda that subscribes to a doctrine of free enterprise, less government, and lower taxes. CSE President Paul Beckner makes clear the niche his group has carved: ?We are not a ?think-tank,? content to study the issues and publish papers and reports. There are many groups doing important work in this area. CSE?s mission is to turn those ideas and policies into action.?

On tax issues, CSE focuses on short, snappy pieces it can funnel to right-wing activists, rather than the policy papers produced by Heritage and Cato. CSE brings local activism to the tax-cut table via e-mail campaigns and local chapters and activists who organize anti-tax events.

Immediately following President Bush?s 2003 State of the Union Address, CSE said ?the heart of [President Bush?s] domestic plan is the agenda that CSE … [has] been working on for a long time.?

Club for Growth

The Club for Growth (CFG) touts itself as the inheritor of Ronald Reagan?s ?vision of limited government and lower taxes? and advances this vision through support of political candidates who hew to its right-wing economic orthodoxy. As Stephen Moore, CFG president, sees it, tax cutting is a core Republican value, and any GOP candidate who opposes such measures is a ?Republican In Name Only? (RINO). Moore has made it clear that RINOs are a breed of animal that he wants to drive to extinction: ?We?re trying to … get the word out to even the lowest grass-roots level that if you?re a Republican you aren?t allowed to vote for taxes.?

Despite feuds with other GOP groups, CFG has garnered an impressive electoral track record. With each new election cycle, CFG has put forward a somewhat larger slate of candidates, many of whom end up in the win column. In 2000, ten of 16 CFG-backed candidates won in the general election. Their 2002 performance was even better ? 17 of CFG?s 19 candidates went on to victory.

Many credit CFG arm-twisting for the unanimous support the President?s 2001 $1.6 trillion tax received from Republicans in Congress. According to Rep. Jeff Flake (R-Ariz.), who CFG supported in 2000, ?[W]hen you have 100 percent of Republicans voting for the Bush tax cut, you know that they?re looking over their shoulder and not wanting to have Steve Moore recruiting candidates in their district.?

While CFG has made a name for itself as the GOP?s ?tax-cut enforcer,? the group has a larger agenda. It is an advocate of school vouchers, free trade, and Social Security privatization. Moore is vitriolic in his attack on senior citizens who are, he says, ?the most selfish group in America today.?


In summarizing the role played by conservative think tanks in formulating and implementing the Bush tax cuts, PFAW says the right-wing advocacy groups are among the least visible of the various interests behind the current push for large and reckless tax cuts. ?It is fairly easy to see what benefit a business or trade group could gain from the recent White House proposals, but the often-radical political ideology behind the advocacy groups that help provide political firepower is far less obvious.?

While the five groups reviewed in this paper are influential, they are just part of the overall tax cut effort. When the White House started pushing its tax cut package in early 2003, The Washington Post noted that one of the most important political forces behind it was the Tax Relief Coalition, ?an umbrella group that pushed the 10-year, $1.35 trillion tax cut to passage in 2001.? The coalition was actually formed in 2001 with help from the Bush administration and features some of the largest business trade groups, as well as Americans for Tax Reform and Citizens for a Sound Economy.

Giving a helping hand to the troika of business, the economic Right, and the Bush administration are Religious Right groups ? who have long pushed the tax-cutting agenda to their followers ? and right-wing media outlets, such as The Wall Street Journal editorial page, the Weekly Standard and the National Review.

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The powers behind the throne

One thing is certain: None of the five think tanks discussed in these pages is going to have to run a bake sale in order to pay the rent. According to People for the American Way (PFAW), they rake in more than $60 million per year, with the Heritage Foundation raising $38 million in 2000. Together they employ more than 300 staff members.

And they are, in a very real sense, farm teams for the Bush administration. Nina Shokrii Rees, a key member of Vice President Cheney?s staff, is a graduate of Americans for Tax Reform. The Heritage Foundation sent Labor Secretary Elaine Chao and eight others to the White House. Five alumni of the Cato Institute have been appointed to the Commission to Strengthen Social Security; while Citizens for a Sound Economy has contributed a half-dozen of its staff to various government agencies.

Although these groups get money from the giants of U.S. industry, all of them depend on right-wing foundations for much of their financial backing.