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Republican-Libertarians target moderates in bid for supremacy

by Liz Halloran, Michael Scherer Saturday, May. 10, 2003 at 4:14 PM

Club for Growth leaders, a pantheon of conservative economic thinkers and tax-cut advocates, are "trying to be a conscience for the party," says Stephen Moore, president and co-founder. But the club's rising power and foray into ethical and moral debates have raised alarms.

GOP Faces Battle Within - Republicans On Right Target Party Moderates

Liz Halloran, Courant Staff Writer, May 9, 2003

WASHINGTON -- The doctored ads show two senators standing next to a French flag - a not-so-subtle attempt to liken their opposition to President Bush's tax cut plan to France's unwillingness to support the Iraq war. And just days after the ads first aired, the president made a personal visit to the home state of one of the senators to press his tax cut case with the locals - a very public display meant to pressure and embarrass the senator.

Politics as usual? Maybe. But in this case, all parties in question belong to the same party, and the battle is internal - and led by new and powerful interest groups whose increasingly bitter struggle for the soul of the Republican Party has burst into the open.

A central player in the party drama is a new titan in American politics, but one largely unknown outside Washington political circles - the Club for Growth, which raised more than .2 million for the 2002 election and claims about 8,000 members who have given 0 or more. The conservative political action committee aired the doctored ads of GOP Sens. Olympia J. Snowe of Maine and George V. Voinovich of Ohio, is planning more and has escalated its rhetoric against other moderate Republicans who have failed to support Bush's full 6 billion tax cut plan.

It is backing a 2004 primary challenge to veteran GOP Sen. Arlen Specter in Pennsylvania, has suggested it might go after Sen. John McCain, R-Ariz., and has its sights set on turning out of office three moderate Republican congressmen. "They are a force to be reckoned with," said Connecticut U.S. Rep. Christopher Shays, R-4th District, himself a periodic target of the club.

The question is, flush with the power of a GOP-controlled White House and Congress, will they reach too far?

Club for Growth leaders, a pantheon of conservative economic thinkers and tax-cut advocates, are "trying to be a conscience for the party," says Stephen Moore, club president and one of its founders. "And Lord knows the party needs a conscience." But the rising power and conservatism of the club, and its straying into ethical and moral debates, have alarmed moderates in the party. They have begun to fight back, led by the Republican Main Street Partnership, a group formed in 1998, in response to the party's rightward shift.

"They are trying to purge the moderates," said Sarah Chamberlain Resnick, Main Street Partnership's executive director. "But what I don't understand is that without the moderates, we don't hold the majority." The partnership has taken out its own ads defending Snowe, whose husband is chairman of the organization's policy side, and has assumed a more public and aggressive tone in responding to the club's offensives.

"We can't sit by and do nothing," Chamberlain Resnick said.,0,7864522.story?coll=hc-headlines-newsat3

Richard Gilder (Honorary Chairman of The Club For Growth)

Michael Scherer,, March 5, 2001

Since the early 1980s, stockbroker Richard Gilder has been honing his influence among Republicans on Capitol Hill. He has cheered Ronald Reagan's tax cuts, funded Newt Gingrich's revolution, twice backed Steve Forbes for president, and attacked moderates in the GOP for their lack of free-market fervor. His web of influence encompasses pundit Robert Novak, whose money he manages; the Manhattan Institute, a conservative think tank he once chaired; and George W. Bush, whom Gilder joined as an investor in the Texas Rangers. His current political agenda features three policy proposals -- privatizing Social Security, cutting federal income taxes, and providing public school vouchers -- all of which Bush adopted as campaign promises.

During the last election cycle, Gilder gave Republicans 0,000 of his own money. But the donations represented just a fraction of the cash he marshals for supply-side politicians. In the mid-1980s Gilder founded the Political Club for Growth, a group of Wall Street conservatives who pooled their contributions to increase their influence. The more-visible Club for Growth, a political action committee modeled on the liberal Emily's List, was created in 1999. Last year, club members combined their contributions into million-dollar "bundles" for several candidates, several of whom later appeared at press events as the Club's "rising stars" in Congress.

In January, the club promised to spend another million on advertising in support of Bush's tax cut proposal. "What's needed is a sort of pressure group that puts direct pressure on members of Congress to enact legislation using a carrot-and-stick approach," says Stephen Moore, another founder of the club and a senior fellow at the libertarian Cato Institute. The carrot is cash, and Gilder holds one of the sticks.

In a rare interview with the National Journal in 1995, Gilder was unabashed about how politics affect his personal fortunes. He described leading his clients into the stock market during the late 1970s in anticipation of a capital gains tax cut. When it came, the market surged and his investments rose -- only to be driven to further heights by Reagan's income-tax cuts. Gilder came to believe that lower taxes meant a better environment for investing. "If you are an investor you want to watch tax rates, especially capital gains rates," Gilder told the Journal. "If rates are going up, that's not good for the economy."

More recently, Gilder has trumpeted another proposal that would benefit his investment portfolio: the privatization of Social Security. Such a plan, according to analyst estimates, could pump billion of public retirement funds into private markets each month. It would also create an unprecedented political incentive for politicians to cater to the wishes of Wall Street, lest they hurt their constituents' new portfolios.

Gilder has also been an active supporter of plans to privatize another lucrative service: public education. As far back as 1993, Gilder and his former wife, Virginia, gave 0,000 to an ill-fated proposal in California to promote vouchers for public school students who transferred to private classrooms. In 1998, Gilder gave at least ,000 to a political action committee lobbying for more charter schools in New York. Amway founder Richard DeVos Sr.(No. 12, 4,500), buyout king Theodore Forstmann (No. 210, 1,000), and Wal-Mart heir John Walton (No. 396, 3,250) have all financed similar efforts to bring market principles to public education.

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