Budget crisis in the plan

Conservatives plotted to cripple health law

WASHINGTON - Shortly after President Barack Obama started his second term, a loose-knit coalition of conservative activists led by former Attorney General Edwin Meese III gathered in the capital to plot strategy. Their push to repeal Obama’s health-care law was going nowhere, and they desperately needed a new plan.

Out of that session, held one morning in a location the members insist on keeping secret, came a little-noticed “blueprint to defunding Obamacare,” signed by Meese and leaders of more than three dozen conservative groups.

It articulated a take-no-prisoners legislative strategy that had long percolated in conservative circles: that Republicans could derail the health-care overhaul if conservative lawmakers were willing to push fellow Republicans - including their cautious leaders -into cutting off funding for the entire federal government.

“We felt very strongly at the start of this year that the House needed to use the power of the purse,” said one coalition member, Michael Needham, who runs Heritage Action for America, the political arm of the conservative Heritage Foundation.

He added, “We felt very strongly that this was a fight we were going to pick.”

Last week the country witnessed the fallout from that strategy: a budget standoff that shuttered much of the federal bureaucracy and unsettled the nation.

To many Americans, the shutdown came out of nowhere. But interviews with a wide array of conservatives show that the confrontation that precipitated the crisis was the outgrowth of a long-running effort to undo the law, the Patient Protection and Affordable Care Act, since its passage in 2010 - waged by a galaxy of conservative groups with more money, organized tactics and interconnections than is commonly known.

With polls showing Americans deeply divided over the law, conservatives believe the public is behind them. Although the law’s opponents say that shutting down the government was not their objective, the activists anticipated that a shutdown could occur - and worked with members of the Tea Party caucus in Congress who were excited about drawing a red line against a law they despise.

A defunding “tool kit” created in early September included talking points that addressed the question, “What happens when you shut down the government and you are blamed for it?”

The suggested answer was the one House Republicans give today: “We are simply calling to fund the entire government except for the Affordable Care Act/Obamacare.”

The current budget brinkmanship is just the latest development in a well-financed, broad-based assault on the health law, mounted by groups across the conservative spectrum. Some, like Tea Party Patriots, Americans for Prosperity and Freedom Works, are Tea Party inspired. Others, like Club for Growth, defend the free market. Some, like Heritage Foundation, a research organization, have deep roots in Washington. But some, like Generation Opportunity and Young Americans for Liberty, both aimed at young adults, are upstarts.

The billionaire Koch brothers, Charles and David,have been deeply involved with financing the overall effort. A group linked to the Kochs, Freedom Partners Chamber of Commerce, disbursed more than $200 million in 2012 to nonprofit organizations involved in the fight. Included was $5 million to a new group geared to young adults that ran an Internet advertisement showing a menacing Uncle Sam figure popping up between a woman’s legs during a gynecological exam.

The groups also have sought to pressure vulnerable Republican members of Congress with scorecards keeping track of their health-care votes, burned faux “Obamacare cards” on college campuses and distributed scripts for phone calls to congressional offices, sample letters to editors and pre-written Twitter offerings and Facebook comments for followers to present as their own.

On Capitol Hill, the advocates found willing partners in Tea Party conservatives, who have threatened repeatedly to shut down the government if they do not get their way on spending issues. This time they said they were so alarmed by the health law that they were willing to risk a shutdown over it. (“This is exactly what the public wants,” Rep. Michele Bachmann, R-Minn., founder of the House Tea Party Caucus, said on the eve of the shutdown.)

Despite Bachmann’s comments, not all of the groups have been on board with the defunding campaign. Some, like the Koch-financed Americans for Prosperity, which spent $5.5 million on healthcare television advertisements over the past three months, are more focused on sowing public doubts about the law. But all have a common goal, which is to cripple a measure that Sen. Ted Cruz, the Texas Republican and leader of the defunding effort, has likened to a horror movie.

“We view this as a long term effort,” said Tim Phillips, president of Americans for Prosperity. He said that his group, which receives funding from the Koch brothers, expects to spend “tens of millions” on a “multifront effort” that includes working to prevent states from expanding Medicaid under the law.

His group’s goal is not to defund the law.

“We want to see this law repealed,” Phillips said.

A FAMILIAR TACTIC

The crowd was raucous at the Hilton Anatole, just north of downtown Dallas, when Needham’s group, Heritage Action, arrived on a Tuesday in August for the second stop on a nine-city Defund Obamacare Town Hall Tour. Nearly 1,000 people turned out to hear two stars of the Tea Party movement: Cruz, and Jim DeMint, the former South Carolina senator who runs the Heritage Foundation.

“You’re here because now is the single best time we have to defund Obamacare,” declared Cruz, who would go on to rail against the law on the Senate floor in September with a monologue that ran for 21 hours. “This is a fight we can win.”

Although Cruz is new to the Senate, the tactic of “defunding” in Washington is not. For years, Congress has banned the use of certain federal funds to pay for abortions, except in the case of incest and rape, by attaching the so-called Hyde Amendment to spending bills.

After the health law passed in 2010, Todd Tiahrt, then a Republican congressman from Kansas, proposed defunding bits and pieces of it. He said he spoke to Boehner’s staff about the idea, while the Supreme Court - which ultimately upheld the central provision of the law - was weighing its constitutionality.

“There just wasn’t the appetite for it at the time,” Tiahrt said in an interview. “They thought we don’t need to worry about it, because the Supreme Court will strike it down.”

But the idea of using the appropriations process to defund an entire federal program, particularly one as far-reaching as the healthcare overhaul, raised the stakes considerably.

In the three years since Obama signed the health measure, Tea Party-inspired groups have mobilized, aided by a financing network that continues to grow, both in its complexity and the sheer amount of money that flows through it.

A review of tax records, campaign finance reports and corporate filings shows that hundreds of millions of dollars have been raised and spent since 2012 by organizations, many of them loosely connected, spearheading opposition to the measure.

One of the biggest sources of conservative money is Freedom Partners, a tax-exempt “business league” that claims more than 200 members, each of whom pays at least $100,000 in dues. The Virginia-based group’s board is headed by a longtime executive of Koch Industries, the conglomerate run by the Koch brothers, who were among the original financiers of the Tea Party movement. The Kochs declined to comment.

Conservatives are finding that, with relatively small advertising buys, they can make a splash. Generation Opportunity, the youth-oriented outfit behind the “Creepy Uncle Sam” ads, is spending $750,000 on that effort, aimed at dissuading young people - a cohort critical to the success of the health-care overhaul - from signing up for insurance under the new law. Two other groups, Freedom Works, with its “Burn Your Obamacare Card” protests, and Young Americans for Liberty, are also running campus events.

Generation Opportunity receives substantial backing from Freedom Partners, and appears ready to expand. Recently, Generation Opportunity moved into spacious new offices in Arlington, Va., where the exposed ductwork, Ikea chairs and ping pong table give off the feel of a Silicon Valley startup.

Its executive director, Evan Feinberg, a 29-year-old former Capitol Hill aide and one-time instructor for a leadership institute founded by Charles Koch, said there would be more Uncle Sam ads, coupled with college campus visits, this fall.

“A lot of folks have asked us, ‘Are we trying to sabotage the law?’” Feinberg said in an interview last week. His answer echoes the Freedom Partners philosophy: “Our goal is to educate and empower young people.”CRITICAL TIMING

But many on the Republican right wanted to do more.

Meese’s low-profile coalition, the Conservative Action Project, which seeks to find common ground among leaders of an array of fiscally and socially conservative groups, was looking ahead to last Tuesday, when the new online health insurance marketplaces, called exchanges, were set to open. If the law took full effect as planned, many conservatives feared, it would be nearly impossible to repeal - even if a Republican president were elected in 2016.

“I think people realized that with the imminent beginning of Obamacare, that this was a critical time to make every effort to stop something,” Meese said in an interview. Meese has since stepped down as chairman and has been succeeded by David McIntosh, a former congressman from Indiana.

The defunding idea, Meese said, was “a logical strategy.” The idea drew broad support. Fiscal conservatives, like Chris Chocola, president of the Club for Growth, a business-backed nonprofit group, signed on to the memorandum. So did social and religious conservatives, like the Rev. Lou Sheldon of the Traditional Values Coalition.

The memorandum set a target date: March 27, when a continuing resolution allowing the government to function was to expire. Its message was direct: “Conservatives should not approve a CR unless it defunds Obamacare.”

But the March date came and went without a defunding struggle.

Yet by summertime, with an August recess looming - and another temporary spending bill set to expire at the end of September - the groups were through waiting.

“I remember talking to reporters at the end of July, and they said, ‘This didn’t go anywhere,’” Needham recalled. “What all of us felt at the time was, this was never going to be a strategy that was going to win outside the Beltway. It was going to be a strategy where, during August, people would go home and hear from their constituents, saying, ‘You pledged to do everything you could to stop Obamacare. Will you defund it?’”

Heritage Action, which has trained 6,000 people it calls “sentinels” around the country, sent them to town-hall meetings and other events to confront their elected representatives. Its “Defund Obamacare Town Hall Tour,” which began in Fayetteville on Aug. 19 and ended 10 dayslater in Wilmington, Del., drew hundreds at every stop.

The Senate Conservatives Fund, led by DeMint when he was in the Senate, put up a website in July called dontfundobamacare.com and ran television ads featuring Cruz and Lee urging people to call their representatives and tell them not to fund the law.

When Sen. Richard Burr, R-N.C., told a reporter that defunding the law was “the dumbest idea I’ve ever heard,” the fund bought a radio ad to attack him. Two other Republican senators up for re-election in 2014 - Lamar Alexander of Tennessee and Graham of South Carolina - also were targeted and now face Tea Party challengers.

Although conservatives believe the public will back them on defunding, a recent poll by the Kaiser Family Foundation found that a majority - 57 percent - disapproves of cutting off funding as a way to stop the law.

Even though the health exchanges are now open for business, and despite criticism from fellow Republicans who view the “Defund Obamacare” strategy as politically damaging and pointless, Needham said last week that he felt good about what the groups had accomplished.

“It really was a groundswell,” he said, “that changed Washington from the outside in.”

Front Section, Pages 1 on 10/06/2013

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