EARLY IN PRESIDENT CLINTON’S FIRST TERM, Gary Bass, the head of a little-known nonprofit organization known as OMB Watch, met at the White House along with other nonprofit activists, union officials, and others for the first of many briefings on White House policy initiatives. The president had an ambitious domestic agenda — an economic stimulus package, a balanced budget plan, and nationalized health care. And, like all presidents, he needed allies. He would soon find some of his most vociferous supporters among liberal nonprofit groups like OMB Watch.
In return, however, the president’s nonprofit allies wanted more government spending. Even before Clinton took office, Bob Smucker, Independent Sector’s head lobbyist at the time, was telling National Journal that “[t]he last 12 years have been form over substance. We’ve had enough of the 1,000 points of light.” To Independent Sector, a large Washington, D.C.-based national association that includes nonprofits heavily reliant on federal government funding, the new president’s mission was clear: pry loose more federal dollars for federal social programs and pet nonprofit causes.
Smucker went on to describe the president as a kind of new and powerful lobbyist for the welfare state: “Clinton is going to have to do some heavy lifting; and the question is, where will he get the money? The needs are out there, and that’s what he’s elected for — to provide leadership to get the money.” Gary Bass also had some thoughts for the newly elected chief executive. President Clinton, Bass told the San Francisco Chronicle, “really needs to have a firm and expansive investment program led by a stimulus package” (a reference to an ill-fated proposal for $16 billion in new domestic spending).
Much changed during President Clinton’s first term. Three years after Smucker and Bass had thrown down the gauntlet of increased federal spending, Republicans had succeeded in passing a balanced budget resolution which critics, including the president, charged would devastate the poor and America’s nonprofit community. Some nonprofits were quick to join in the attack, even though it put them in the somewhat anomalous position of opposing plans that would have elevated the importance of private philanthropy in American public life.
On March 26, 1996, for instance, Independent Sector president Sara E. Melendez testified at a Senate hearing of the Labor and Human Resources subcommittee on Children and Families on “Charities’ Capacity to Fill the Gap in the Federal Funding of Social Programs.” Melendez warned the committee that “f voluntary organizations are saddled with picking up for the federal responsibility of funding social programs they will be swallowed up by that obligation.”
Melendez then actually suggested that nonprofits and organizations like Independent Sector had a moral obligation to engage in the politics of Washington: “[I]t is surely a maddening thing for those funding services to see so many nonprofit organizations preoccupied with public policy and education of the public. In the long-run though, these are arguably the greatest contributions of the nonprofit sector to American society.”
Yet for nonprofits receiving federal money, “education of the public” has all-too-frequently devolved into a relentless, coordinated effort to expand the federal government. Not only that, but the last 15 years have seen the birth of a broad network of advocacy groups dedicated to the goals of greater federal government spending and involvement in national life. At the forefront of this campaign have been Independent Sector and OMB Watch.
Created in 1980, Independent Sector was the brainchild of John W. Gardner. A former president of the Carnegie Corporation, Gardner also founded Common Cause in 1970, a left-of-center public policy organization once chaired by former Watergate special prosecutor Archibald Cox. As secretary of Health, Education and Welfare under President Lyndon Johnson, Gardner implemented LBJ’s “Great Society” welfare programs. But with the election of Ronald Reagan 15 years later, the same programs Gardner championed became the focus of a new debate.
By 1980, public support for the Great Society bureaucracy had waned. A University of Michigan electoral study found that the number of Americans skeptical of Washington’s ability to solve social problems had more than doubled since Johnson’s inauguration. Chronic welfare dependency remained high and illegitimacy rates, as Assistant Secretary of Labor Daniel Patrick Moynihan had predicted in his controversial 1965 report, had continued to rise. As a result, Reagan’s campaign to overhaul the welfare system, slow spending, and transfer more federal power to the states resonated with American voters. That support remained relatively firm during Reagan’s two terms, despite strident opposition by a coalition of interest groups.
Gardner and his Independent Sector organization, then headed by Brian O’Connell, lost no time in commissioning studies attacking Reagan’s economic agenda. In the spring of 1982, for example, the group published a widely cited report that, as described by National Journal, threw “cold water” on Reagan’s economic recovery program. The proposed social service budget cuts, the report concluded, would disproportionately harm those most in need of government help.
It would be inaccurate to suggest that liberal interest groups were alone in opposing the Reagan agenda. In fact, throughout Reagan’s first term, nonprofits joined forces with a coalition of House and Senate Democrats, trade unions, and newspapers like The New York Times to portray Reagan’s budgets as harsh and uncaring, particularly toward the poor. Yet in the end, it would be a regulatory change proposed by the Office of Management and Budget, a small, then comparatively low-profile, executive agency responsible for the president’s annual budget, that would transform how nonprofits and their allies operate in Washington.
In the summer of 1983, David Stockman’s OMB circulated a proposal (a much weaker version of which would eventually be adopted) to amend a Carter administration regulation governing federally funded nonprofits. Known as Circular A-122, it limited the type and amount of lobbying a nonprofit could engage in if it received federal funds. The Reagan administration wanted to tighten this rule because despite A-122 limits, many nonprofits had actively opposed White House policy on welfare reform, deregulation, and reducing levels of domestic spending.
For groups politically opposed to Reagan, changing A-122 was a de facto declaration of war, an obvious backdoor means, they believed, of silencing the administration’s critics. Speaking to National Journal in May 1982, Independent Sector’s Brian O’Connell had predicted that the result of Reagan’s domestic agenda might be to “sharpen the legislative skills” of nonprofits in order to protect their interests in an era of tighter budgets, federal program and agency consolidations, and block grants to states. A year later, with help from Independent Sector and other groups, OMB Watch was born.
A self-described “nonprofit research and advocacy organization,” its mission was the nonprofit equivalent of an opposition research department in a political campaign, a sort of nonprofit pitbull. OMB Watch used its excellent contact network and its thorough understanding of the regulatory process to gather inside information for use by other advocates in a wider campaign to discredit administration policies. “OMB is such a powerful agency and [it is] so well hidden,” commented Gary Bass to the Washington Post in 1984. A personable and politically astute academic who still heads OMB Watch, Bass was once reportedly on President Clinton’s short list to head OMB’s Office of Information and Regulatory Affairs. “We operate as a network. Community groups feed us the information they’re hearing and we check it out. Our network also includes concerned professionals who are civil servants within OMB,” continued Bass.
Originally housed in the National Education Association union headquarters in Washington, OMB Watch launched a skillful media campaign early on to gain exposure in the nation’s major newspapers. Reporters who covered the White House and Capitol Hill quickly realized they could call OMB Watch for quotes critical of the Reagan White House. This media exposure, in turn, put OMB Watch in touch with a variety of donors (the group has been supported by the Bauman Family Foundation, the Jessie Smith Noyes Foundation, the George Gund Foundation, the J. Roderick MacArthur Foundation, the John D. and Catherine T. MacArthur Foundation, and the Surdna Foundation. More recently, the Charles Stewart Mott Foundation announced a three-year, $600,000 grant to the organization.)
In recent years, OMB Watch (with 1995 revenues of $640,000) and Independent Sector (with 1996 revenues of $9.3 million) have focused their energies on the Republican Congress, and what they see is not pretty. “The Reagan era pales in comparison,” said Gary Bass of the 104th Congress to National Journal. “[T]he public doesn’t know what really is going on.”
From day one of the conservative takeover, a vigorous campaign has been waged by a coalition of forces — environmental, labor, civil rights, and other interest groups — to defeat major portions of the conservative agenda. The first big target of these organizations — many of which themselves receive federal funds — was the balanced budget resolution authored by House Budget Committee Chairman John Kasich. The resolution aimed to slow spending growth, cut taxes significantly, and decentralize the decaying federal welfare system. And, like Reagan’s economic recovery program, it faced an array of vocal opponents.
First, Independent Sector released a study, “Republican Balanced Budget Plan of January 1996: Implications for the Nonprofit Sector,” that mirrored the conclusions of its 1982 report on Reagan’s economic plan. Lester Salamon of Johns Hopkins and Alan Abramson of the Aspen Institute, co-authors of the study, have had a long relationship with Independent Sector. They argued that nonprofits would not be able to step in and fill the social service void allegedly left by the budget “cuts.” And if this weren’t enough, Independent Sector also released “estimates” of just how many fewer meals would be served to the homeless and elderly poor in U.S. cities. These doomsday findings were quickly picked up by the news media and circulated on Capitol Hill.
“Charities Aiding Poor Fear Loss of Government Subsidies” read a February 1996 New York Times headline based on the Salamon-Abramson study. Citing statistics from Independent Sector, a Time magazine headline asked, “Can Charity Fill the Gap?; Groups that Help the Poor are Bracing for a Double Hardship: Surging Need and Federal Budget Cuts.” For Independent Sector and a president stung by his party’s massive 1994 election defeat, the headlines could not have been more welcome. For Republicans trying to retain a narrow majority, the avalanche of bad press could not have been worse timed.
Back on Capitol Hill, Sara Melendez repeatedly cited the Salamon-Abramson study in her March 1996 Senate testimony. Her message that day could be summarized as: We categorically reject the GOP budget and will work to defeat it. Melendez simultaneously attacked proposals to replace the federal AFDC entitlement with block grants to the states while discounting the capability of the nonprofit organizations she represents: “In summary, it is clear that charities cannot fill the gap for the proposed federal funding cuts in social programs,” Melendez concluded. “Ultimately, it is the responsibility of the federal government, not charitable organizations, to provide for the general welfare.”
Not to be left out, OMB Watch piled on with its “Poverty & Welfare” web page loaded with analysis like “Racing to the Bottom? Recent State Welfare Initiatives Present Cause for Concern” and “Potential Effects of Congressional Welfare Reform Legislation on Family Incomes,” a report “that predicts 1.1 million children will end up below the poverty line as a result of Congress’s welfare reform.” OMB Watch even made available a report titled “28 Million Poor and Lower-Middle Income Children Would Not Qualify for Dole Child Tax Credit.”
Then, early in 1997, OMB Watch created the “Coalition for Budget Integrity” to educate the public on the “brutal reality of the balanced budget amendment” (also known as the BBA). Like the Kasich budget, this “brutal” amendment was intended to restrain Capitol Hill’s appetite for spending. Unlike the Kasich budget, it lost — after a fierce lobbying effort spearheaded by labor union funds. Reflecting on the Internet’s critical role in the battle, OMB Watch’s Bass recalls: “We used a significant amount of technology to attempt to defeat the BBA.” One coalition member in particular was singled out for praise by OMB Watch: “Special credit should go to AFSCME, which led both the legislative and public relations campaigns while serving as a hub for coalition members.”
In truth, the “coalition” itself was little more than an alliance of well-heeled Democratic party interest groups that pumped millions into Democratic party election coffers — with the nonprofit sector providing the requisite patina of grassroots support to what was in essence a partisan lobbying effort.
Nor can there be a serious question as to the partisan nature of the coalition’s constituents. As reported in The New York Times, of the $4 million contributed by the American Federation of State, County, and Municipal Employees (AFSCME) in the 1995-96 election cycle, 99 percent went to Democrats. Other coalition members included: the National Education Association, which contributed $3.3 million (96 percent to Democrats); the Teamsters, $3.2 million (96 percent to Democrats); the Laborers Union, $3.1 million (93 percent to Democrats); the United Auto Workers (UAW), $3 million (99 percent to Democrats); and the United Food and Commercial Workers, $2.9 million (99 percent to Democrats).
Coalitions like these are a vital part of OMB Watch’s work because they are cost-effective and because the pressure they induce appears to come from an extremely broad base. The U.S. Conference of Mayors, the Alliance for Justice, AFSCME, UAW, Independent Sector, and many other groups pool their resources — office space, issue expertise, mailing lists, or key political contacts on Capitol Hill or in the White House — as needed to defeat legislation, particularly in House and Senate committees and subcommittees. For its part, OMB Watch has been generous in placing its considerable Internet resources at the disposal of such groups. For example, OMB Watch’s Internet site services several electronic mailing lists on behalf of coalitions of unions and other interest groups. One such coalition, Citizens for Sensible Safeguards (CSS), includes the AFL-CIO, NEA, and Public Citizen, and was created and administered by OMB Watch with a mission “to help preserve public protections” from a barrage of attacks “in the wake of the 104th Congress”. They accomplish this, in part, by emailing so-called “ACTION ALERTS” (see figures 1 and 2). These and other legislative alerts are routinely emailed to more than 1,000 recipients, sometimes more than once per day, typically to coordinate opposition to the legislative agenda of Republicans (including Senators Paul Coverdell, Fred Thompson, and Orrin Hatch, as well as Representatives Dick Armey, J.D. Hayworth, Ernest Istook, Sue Kelly, David McIntosh, and Lamar Smith).
One such “alert,” released on September 8, 1997 (figure 1) reads “EMERGENCY MEETING TOMORROW TO BUILD OPPOSITION TO REGULATORY ‘REFORM’ BILL” in the boardroom of the AFSCME union headquarters in Washington to discuss the “steps needed to ensure [the bill’s] defeat.” In another case, an “action alert” was used to inform mailing list recipients of a new web page being set up within the OMB Watch site, to brief reporters on the “dangers” of the regulatory reform bill. As an indication of the level of sophistication that has been achieved by OMB Watch and others in using the Internet to influence Congress and the news media, the site contained press releases, sample letters critical of the legislation, individual statements of opposition from CSS members, and even a voting chart from the previous year’s regulatory reform bill. The August 18, 1997 email message announcing the new web site added, helpfully, that “it is not too late to have something from your group posted to the site (before reporters are notified). All you have to do is email any information you have on S. 981 to Reece RushingÉ and it will be posted within a couple of hours.”
A September 19, 1997 “alert” left it to a third party make the lobbying pitch — in this case against property rights, or “takings,” legislation then pending in the House. The third party’s comments — those of Glenn Sugameli of the National Wildlife Federation — were transmitted by none other than OMB Watch’s Gary Bass. Sugameli stated that “[c]ontacts are needed immediately with House and Senate members to prevent additional cosponsors (and to convince selected cosponsors to remove their names)” and continued that “f you or any of your state, local or grassroots contacts can make even a few calls or visits, please contact me for further information or for targets.” Concluded Sugameli, “[g]rassroots pressure defeated previous federal takings bills.” Eleven days later, on September 30, 1997, OMB Watch used the network to email information about a meeting to be held in the conference room of U.S. Conference of Mayors to discuss Senate and House “takings” bills. The message (figure 2) ends: “Please let Stephan Kline of Alliance for JusticeÉ know whether you can attend, and if not whether we can count on you as part of a lobbying effort.”
Citizens for Sensible Safeguards is not the only OMB Watch coalition using the Internet to lobby Congress. The “Let America Speak” (LAS) coalition, formed by OMB Watch, Independent Sector, and the Alliance for Justice, was created to “track legislation in Congress that would affect the advocacy voice of nonprofits.” Just as OMB Watch was created in response to the Stockman battle in 1983, LAS was created in 1995 to defeat legislation introduced by republican Congressmen Ernest Istook, Bob Ehrlich, and David McIntosh to restrict the amount of political advocacy undertaken by federally funded nonprofits. LAS still exists today — ready to stop any similar measure from even getting out of committee by generating “grassroots” opposition. But whether such coalitions merely report grassroots opposition or generate it in the first place is open to debate, as is clear from a June 1997 email sent by OMB Watch recruiting “key contacts” from the more than 1,000 recipients of OMB Watch’s email list:
If you become a key contact, the Let America Speak Coalition will:
- Send you fax/email updates periodically and alerts as necessary. This will include bill analyses, action alerts, technical information and news reports;
- Contact you by phone periodically for general information exchange and as necessary in times of legislative crisis.
In return, we ask that you:
- Redistribute the information we send to you as broadly as possible, particularly in your area;
- Contact your member of Congress as necessary, and let us know when you have;
- Keep us informed of local issues that might be of interest to the coalition (optional).
The recruitment effort has paid off handsomely. By January 1998, OMB Watch had secured principal contacts in 330 congressional districts. Yet, while such networks can be relied on to elicit simulated grassroots pressure virtually on demand, the opposition they generate is self-interested and can hardly be described as entirely autonomous. Such networks do, however, go a long way toward explaining why government programs seem to enjoy everlasting life. In the end, the “inside the Beltway” activities of groups like OMB Watch and Independent Sector maintain the continuing steady drumbeat to broaden government’s role in areas many Americans believe would be better left to the innovative spirit of individuals and communities. In the greatest irony of all, it is frequently the unintended but destructive consequences of many federal domestic programs that private philanthropy works to undo every day.
Daniel McKivergan is the Director of Policy for the Philanthropy Roundtable.