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The Money Behind the Fight to Undermine Medicaid

Documents show how a conservative think tank hinders expansion of health insurance in Texas.
by Published on
Clockwise from top left: Gov. Rick Perry, Lt. Gov. David Dewhurst, Sen. Ted Cruz, Sen. John Cornyn


This story was produced in partnership with The Guardian and the Portland (Maine) Press Herald.

The GuardianOn April 1, Texas’ most powerful elected officials gathered at the state Capitol to rail against Medicaid. In a packed press conference room with protesters shouting outside the door, Republican Gov. Rick Perry, Lt. Gov. David Dewhurst, and U.S. Sens. John Cornyn and Ted Cruz made clear to reporters that Texas—the state with the nation’s largest uninsured population—wouldn’t expand the program that provides health insurance to the poor and disabled.

pphflagUnder the Affordable Care Act, the federal government would have largely paid for Medicaid to cover an additional 1.5 million Texans. But the state’s Republican leaders instead called for the federal government to “block grant” Medicaid, giving them a lump sum of money to run the program as they see fit. Dewhurst compared expanding the current Medicaid system to drug addiction. “Would you consider expanding a broken system? Of course not, of course not,” Dewhurst said. “It’s like a drug dealer. You give them their first hit free and then they’re hooked for years and years.”

The group that organized the press conference and supplied the policy prescription was the Texas Public Policy Foundation (TPPF), an influential think tank funded largely by right-wing foundations, corporations and wealthy Texans. TPPF has been instrumental in preventing increased spending on Medicaid and other social welfare programs in Texas. Perry, Cruz, Cornyn and other politicians frequently turn to TPPF to help make the intellectual case for reducing government involvement in health care. The press conference was part of TPPF’s multi-year strategy to remake Medicaid in accordance with free-market principles. The think tank would later claim credit for helping block Medicaid expansion in Texas under Obamacare.

Now, new documents show how TPPF and another conservative group, the Texas Conservative Coalition Research Institute, coordinate their attacks on the public sector with a far-flung network of conservative organizations and funders. The documents— obtained by The Guardian and shared with the Observer—contain 40 funding proposals from 34 states, offering a glimpse of the conservative agenda for 2014. The proposals were shepherded by the State Policy Network, a coalition of groups that act as incubators of right-wing policy at the state level. The proposals were to be funded by the Searle Freedom Trust, a private foundation that pumps money into right-wing, corporate-friendly organizations. The intermediary between Searle and the State Policy Network, The Guardian reports, was Stephen Moore, an editorial writer with the Wall Street Journal and an occasional speaker at TPPF events, including a January “plenary session” Moore hosted with Sens. Cruz and Cornyn.

The documents include a TPPF grant request to Searle to fund continuing attacks on Medicaid. In its application, TPPF claims credit for blocking Medicaid expansion in Texas and promises to push for looser federal requirements, including a block-grant approach that Gov. Perry has long sought that could result in tighter restrictions and fewer people covered by the government insurance program.

“[S]topping Medicaid expansion is just the first step,” TPPF’s application to Searle states. The “missing piece to complete our message is an economic forecast” showing how block-granting Medicaid would “bring significant savings” to the state.

Founded in 1989, the TPPF has grown into one of the most influential state-level think tanks in the nation. Its leaders enjoy easy access to the state’s top elected officials; Ted Cruz worked for the organization—heading its Center for Tenth Amendment Studies—before he ran for the U.S. Senate.

As the Observer reported in 2011, TPPF has in the past been accused of soliciting corporate donations and then tailoring its research and conclusions to fit the needs of donor-clients. In 2012, the Observer obtained a list of corporate donors to TPPF that showed the organization is funded largely by right-wing foundations, corporations and wealthy individuals, including the Koch brothers, Altria and Verizon.

“Most think tanks work for their funders, and TPPF’s donors are a Who’s Who of Texas polluters, giant utilities and big insurance companies,” Craig McDonald, director of watchdog group Texans for Public Justice, told the Observer in 2012. “TPPF is thinking the way its donors want it to think.”

TPPF Executive Director Arlene Wohlgemuth denied that the foundation predetermines the outcome of its work. “We make our methodologies and research public explicitly because we expect and want people to investigate and challenge them as we have for the past 25 years,” she wrote in an email. “Block grants offer states considerable flexibility to innovate and adapt to the unique needs of its citizens versus a one-size-fits-all approach mandated from Washington, D.C.”

The newly revealed documents include a TPPF request for $40,000 from Searle to “prove that our proposed Medicaid reform program will efficiently provide quality care to Texas by producing a detailed economic model of our proposed program.” In the proposal, TPPF promises to build on previous research by constructing a “financial model” that will demonstrate that block-granting Medicaid will save Texas money, and then use that research to garner attention from the media.

The documents also show that TPPF and its backers view the research the group conducts as a tool to prod lawmakers into action and to inject conservative ideas into the mainstream. In 2012, Searle gave TPPF $30,000 to produce two Medicaid reports that “served as the intellectual foundation for meetings with Governor Perry, US Senators and Representatives,” the document states. (The list of donors obtained by the Observer last year shows that the Searle Freedom Trust donated $95,000 to the foundation in 2010.)

In its request for funding, TPPF repeatedly claims that its research on Medicaid translated into concrete political action. “TPPF met repeatedly with Governor Perry’s staff and key state lawmakers to ensure that Texas pursues Medicaid reform and refuses expansion. We also organized a high-profile press conference with state leadership to assert our resolve.”

The group also states in its application to Searle that Cornyn “has agreed to champion block grant legislation in the U.S. Senate” and that Texas Congressmen Jeb Hensarling and Michael Burgess “have pledged to support the legislation and identify an appropriate sponsor in the U.S. House.” Cornyn’s office didn’t respond to a request for comment. For his part, Gov. Perry has repeatedly, and unsuccessfully, applied for a waiver from the federal government to allow Medicaid recipients in Texas to use government funds to buy coverage directly from private insurers. In September, he ordered the state health department to prepare another application.

TPPF’s action plan, however, goes beyond just Texas politicians and media. TPPF writes in its application that the American Enterprise Institute and “TPPF’s sister think tanks throughout the country have reached out for more information about how to advance block grants and reforms.” TPPF offers to “provide a blueprint for other state groups to replicate.”

A second Texas funding proposal obtained by The Guardian comes from the Texas Conservative Coalition Research Institute, a think tank overseen by conservative state legislators and business lobbyists. The Conservative Coalition Research Institute asks for $30,000 to produce two studies “demonstrating the benefits” of paying for public schools by replacing property taxes with a sales tax hike. Such proposals have gone nowhere, even in the Republican-dominated Texas Legislature, where many lawmakers support public education.

The Center for Public Policy Priorities, a liberal think tank based in Austin, has estimated that Texas would need to double its state sales tax, from the current 6.25 percent to more than 12 percent, to replace $22 billion in lost revenue from property taxes. Sales taxes are notoriously regressive and volatile as a source of government revenue, rising and falling on the rhythms of the economy.

In its proposal to Searle, the Conservative Coalition Research Institute promises to set up a “school finance reform task force” headed by conservative legislators in preparation for the next session of the Texas Legislature, in 2015. In the interim, the group offers to hold meetings around the state to promote the property tax abolition plan and send the study’s authors to testify at legislative committees. Scrapping the school property tax, the institute avows, would be “a landmark achievement … of the same magnitude of the labor law reforms in Wisconsin,” referring to Gov. Scott Walker’s throttling of public unions in that state.

  • day_in_the_sun

    Texas have voted in people who serve the wealthy conservative elite and not the interest of Texans.

    • Felix Keverich

      You would rather vote for people who serve the wealthy liberal elites, eh?

      • JH

        Better liberal elites than conservative economic/social mullahs who would dictate to swathes of the population and rewrite our social contract (out of existence)…

      • mikeywes

        I would rather the wealthy liberals elites ….by nature and by your smug definition…They Care!!!

      • day_in_the_sun

        I thought liberals create programs to get the votes of the poor? This is what the conservative media tells people who they view as being a few cattle shy of a herd. The fact is the poor are least likely to vote.

        When, it suits conservative, their is a wealthy liberal elite. Conservatives don’t know your pastor is, by definition a community organizer as is a boy scout master. Ronald Reagan was part of the Hollywood Elite. He was a union leader who legalized abortion in California.

        I do agree that money has taken control of politics. I’m a working guy. The only way I can become a new American aristocrats is through politics and by selling my soul.

        We have conservative governors pandering to interests outside of their states refusing money they will provide more of their citizens with medical care? The evil liberal elite want to expand health care to these people? Whose looking out for the little guy?

    • DavidD

      Most people have given up on electoral democracy in Texas.They just don’t vote.

    • 1bimbo

      texans vote their pocketbooks. progressive policies are budget killers. therefore texans embrace conservative policy

  • channelclemente

    They refer to citizens as Sheepole from time to time.

    • hutlee

      And that reference is not wasted in Texas politics. You have to be some kind of sheep to continue putting up with a single party state. Baaaatex, baaaatex!

  • BBunsen

    Rick Perry wants a block grant because then he can funnel it to his supporters, as he’s done with taxpayer funds his entire tenure in office.

    • nancymanyhats

      They set up money to be funded for certain projects, but then it goes into the general fund, and funneled into their buddies’ pockets. Certainly not into education, unless it is charter schools.

      • Michael Pickel, Falmouth

        This sounds like something that goes on in South America or Africa; not in the U.S. and certainly not in the State of Texas! Sad commentary on right-wing sheep being led to the slaughter by their masters. (Glad I moved to Maine, but sad to see my home-state so dysfunctional.)

  • orthomama

    Those who support expanding Medicaid fail to see what a miserable system we currently have. It is full of fraud, kids are at risk of over treatment (see all the dental fraud stories) or lousy quality care. While I see the risks of a block grant, expanding Medicaid as it currently exists is simply a bad idea.

    • jack

      rthat’s how the republican billionaires operate . load it down with debt, (the housing bubble, look how rich wall street got, trillions, on top of stealing millions of homes by not allowing refinancing or democratic nominees to replace the bush yes man in the fha.), never investigate fraud, allow hospitals drs. even chech cons were coming here ,setting up shop, gouging medicare, then move to another state, thats how easy bush made it, so all public programs funds can go bankrupt andbe redistributed to the cartel bush gang. their goal is to get the public numb to our govt crashing, bankrupting, crash it and sell all public assets to our new ‘owners”, i’m sure we”ll have a ‘permanent republican majority ” then as cheney said.

    • hutlee

      The fact that Medcaid exists at all is why the wingnuts are always trying to “fix” it right out of existence. Their selfish ideology is born right from the bowels of hell. Giving any governor a
      block grant to do as he sees fit is about as smart as letting Wall Street determine America’s future.

  • Travelsteve

    Texas, quite possibly the nuttiest state in the union and for many they are just the sheeple these republicans count on to further their backwards agenda and lack of regard for the actual health of the people in their own states.
    Such good christians, as they claim to be. it’s beyond nauseating.

    • 1bimbo

      what’s nauseating is your faux compassion. take another bong hit and go back to bed.

      • hutlee

        What is really nauseating is the lack of understanding and compassion for anyone but your self. So typical of the “me first” wingnuts of America.

    • auntiegrav

      It’s been my experience that Texas is full of compassionate, kind people. They live by the rule of “screw up, move up”, though. In order to get rid of their most annoying people, they elect them to office so they’ll go to Washington or they put them in the military to get rid of them.

  • curaecivem

    What was it Edward R. Murrow said? “A nation of sheep will beget a government of wolves.” Think that describes Texas politics pretty clearly.

    • auntiegrav

      Sheep that eat like wolves and have infinite demands for cheap food and cheap luxuries. The opposite of consumerism-capitalism (sheep-wolves) is not communism: it’s sales taxes. Capitalism isn’t failing us; logic is.

      • curaecivem

        Murrow wasn’t commenting on economics, but on civic responsibility. He was warning against voter apathy and invoking a reminder of the duty of our civic responsibility — it being the moral price for the privilege of our citizenship. He was, perhaps, reminding us of what has been attributed to T. Jefferson that, “the price for liberty is eternal vigilance.” Pax.

        • auntiegrav

          In a consumerist society, all decisions are based on prices. The “eternal vigilance” in a price-based scheme is to have taxes that are visible at the decision point. It’s either that or just allow the consumerist scheme to blow itself into dust and go along with whatever fundamentalist reaction comes around the corner.

  • Lilee

    The republicans won’t be happy until the USA looks like something out of the Middle Ages where we’re all Christian, poverty stricken in rags and with untreated diseases, dragging our retched bodies through fecal streets while they look down at us from their castles with disdain.

    • auntiegrav

      Religion based government, unregulated markets, cheap guns and paternal authority….that’s not the Middle Ages: it’s Afghanistan…but who will be coming to oust OUR version of the Taliban when they can’t get a pipeline deal?

  • AngelaFromAbilene

    What I don’t understand is our Texas Republicans are hell bent on forcing women to have kids they don’t want yet once those unwanted babies are born, the Texas wingnuts don’t want to feed, provide healthcare or educate them. Can someone please explain that rational to me?

    • 1bimbo

      you couldn’t care less about texas women, children or the poor. you use them as a anti-conservative talking point.

      • AngelaFromAbilene

        Actually, I AM a poor TEXAS woman. As such, it is much more than merely a “talking point.” It’s a FACT.

    • auntiegrav

      Starving people keep wages low and profits high.

      • AngelaFromAbilene

        Is that just the Republican way? I thought the were the “Christian” party. Doesn’t sound like a very “Christian” attitude.

  • 1bimbo

    i am just thrilled that conservative groups are advocating for texas taxpayers and jobs. stand your ground! the worst thing that could happen to texas is looney liberals succeed in turning it into a welfare state.

    • curaecivem

      Your screen name seems apt given your comment.

      • 1bimbo

        yes, we know that houston, dallas, austin and south texas are weighing heavily on texas. conservatives keep fighting the good fight and push back against it’s creeping influence on the rest of the state.

        • curaecivem

          Pushing back against what? The result of policies established by the conservatives who have been running this state for the past 20 years? Its obvious you don’t like the results of those policies but rather than admit what a failure they are, you want to place the blame on an imaginary “creeping influence,” from some phantom external force. That’s called denial. Good luck with that.

          • 1bimbo

            failed socialism policy? yes

        • Clayton

          Are you nuts? Where the hell do you think all of the taxes in the state come from? The cities. Once you get outside of the cities most of the “taxpayers” don’t have pot to piss in. They are the ones draining the taxes out of the cities.

          • 1bimbo

            you must be joking. the urban center in texas are the breeding ground for government dependancy. there are no ‘projects’ funded by federal tax dollars where i live, but you find millions of people in the texas metros on the welfare case load list. that’s how government bureaucrats justify and maintain their jobs – generations of welfare recipients in the big cities

  • auntiegrav

    Scott Walker’s attack on labor unions in Wisconsin hasn’t really changed the benefits that teachers are getting (according to Politifact, the teachers are still paying 13 percent vs. civilians paying 24 ), but it has given school boards the option of choosing the insurance company for a change, which does save the districts money for the same benefits. Something had to be done, they just went about it in a drastic way. Whether or not that was the only way is moot now.
    The Medicaid/Healthcare issue comes down to services and products being available as needed vs. a market that is wholly bloated by redundant insurance companies that fix prices: starting with ridiculous overhead (trophy architecture and landscaping), overpaid administrators, obfuscated procedures and forms, and ending with ownership of the medical facilities themselves. By constantly cutting government strings, the right has kept the few good government personnel from actually doing their jobs; a typical 20th century tactic to undermine public services and open the door to bidding, contracting and graft. All while crying “Government Doesn’t Work!” even if it is failing because they keep destroying it and liberals keep trying to reason and compromise with unreasonable and uncompromising forces of money and belief.
    If real Liberals actually exist (other than Bernie Sanders), maybe they need to take a page from the Walker handbook and get radical and aggressive based on whatever real power they still have.

  • auntiegrav

    As long as the argument is allowed to stay focused on taxes and numbers instead of future needs of the country, then those advocating with numbers and trickle-down economics will always win. What’s always at issue is the future purpose of the citizens of the country and their value to the country itself. To leave out the value of an individual human being for society while only considering the value of the rich person’s dollars is to neglect the ways that the rich person’s dollars are created (resource conversion by labor and creativity), whether those dollars need to be re-invested, and what resources will be necessary for future dollars to continue to be created (including natural and human resources like health, stability and cooperation).

    • curaecivem

      I would add that, numbers are not people. So its easy to leave out the human factor of an economic equation, futuristic or otherwise. That’s what makes using stats in such arguments so popular; its easy to de-humanize people when you reduce them to figures. How much less interested I might be in a catastrophe that injured 10% of the population than if I were told that 10,000 men women and children were left homeless. Statics give me nothing but a jot and a faceless number., so its easy to care less.

  • Thomas Coleman

    More of the Same from the Biggest Hate State in the Nation. I had to drive to Austin about ten years ago to testify against withholding HIV/AIDS medications from those who would get sick, be far more infectious and die horribly without them – a scheme backed by appointees placed on the Texas Health and Human Services Commission by the Ultra-Ugly Texas Public Policy Foundation and it’s punk ass, psychotic homophobe Governor Goodhair, which has reared it’s monstrous head once again. We got lots of media coverage then and tore the roof off the suckers, so they had to withdraw their plan of mass murder. What now? Their self-serving, spiteful fight to undermine Medicaid there will needlessly kill thousands of Texans each year. Silence=Death. Republican=Bigot.

    • 1bimbo

      thomas ‘where’s my gubment check’ coleman, the GOP are heroes in the great red state of texas. we have great leaders with excellent conservative policy which support faith, families and freedom in our state!