Tax cuts a hit with a pivotal GOP group: wealthy donors
WASHINGTON — Republicans are struggling to make the $1.5 trillion Trump tax cuts a winning issue with voters in the midterm congressional elections, but the cuts are helping the party in another crucial way: unlocking tens of millions of dollars in campaign donations from the wealthy conservatives and corporate interests that benefited handsome ly from them.
Billionaires and corporations that reaped millions of dollars in tax cuts are pumping some of that windfall into the Congressional Leadership Fund, a “super PAC” that is flooding the airwaves in swing congressional districts with attacks on Democratic candidates vying to wrest control of the House.
The fund’s donors include casino magnate Sheldon Adelson, who has given $30 million and whose company, Las Vegas Sands, reported a nearly $700 million windfall from the tax law earlier this year; Timothy Mellon, chairman and majority owner of Pan Am Systems, a privately held collection of companies that includes rail, aviation and marketing services, who has contributed $24 million; and Valero Services, a Texas oil refining company that reported a $1.9 billion benefit from tax cuts in the first quarter and which has given $1.5 million.
Well over a quarter of the group’s donations have come through the American Action Network, a separate legal entity that focuses on issues and does not reveal donors but that spent heavily to promote the tax cuts before and after President Donald Trump signed them into law late last year.
Republicans have struggled to sell voters on the benefits of the tax cuts despite strong economic growth and the lowest unemployment numbers in 20 years.
But party leaders say the passage of the law appeased wealthy donors, who had been frustrated by Republicans’ failure to repeal the Affordable Care Act and who had threatened to sit out the 2018 campaign. Now, flush with big checks from a handful of deeppocketed donors, the Congressional Leadership Fund is serving as the party’s best hope of a defense against an electoral defeat in November.
The fund’s executive director, Corry Bliss, who runs both that group and the American Action Network, said that some of his donors did not favor all the provisions of the tax law, but that all of them hailed its passage as the rich fruits of total Republican control of Washington.
Had the tax bill failed, Mr. Bliss said, “I think they would have been very disappointed and very deflated.” But Mr. Bliss said that donors were more concerned with seeing results from unified Republican control — especially after the failure to repeal the Affordable Care Act — than specifically with the passage of the tax bill.
A super PAC like the Congressional Leadership Fund is allowed to raise unlimited donations, including from corporations and unions, but it is not allowed to coordinate its efforts with candidates.
Democrats have their own super PAC dedicated to House campaigns, the House Majority PAC, which on Friday started a harshly negative digital attack ad on the Republican House leadership and those who aspire to be in it. The group has raised more than$32 million this year.
The arms-length distance between such organizations and the politicians they back can be very short. In May, Politico reported that Mr. Ryan flew to Las Vegas with Mr. Bliss and Norm Coleman, a former senator and chairman of the Republican Jewish Coalition, to meet with Mr. Adelson.
After the speaker laid out his case for help defending the Republican House majority, he stepped out of the room while Mr. Coleman made the explicit request and secured the $30 million.
“The American people know that the Republicans who control Washington sold them out with a disastrous tax giveaway to the rich and big business that the rest of the country is being forced to pay for,” said Andrew Bates, a spokesman for the liberal campaign group American Bridge. “The fact that those same corporations and wealthy individuals have turned around to bankroll Republican campaign efforts is further proof of what this travesty was all about.”
Mr. Bliss’ group has already rescued flailing conservative candidates in special elections in what previously had been considered safe Republican districts from Ohio to Arizona. Its strategy departs from the traditional carpet-bombing of tight races with television advertisements in the closing days. Instead, the group is building an ambitious field operation to knock on doors and make other voter contacts in 40 targeted congressional districts this fall.
“We reject the old model, which is I raise as much money as possible, I save it and 98 percent gets spent on” lousy TV ads in October, Mr. Bliss said in an interview. He added, “History and common sense says we are supposed to lose the House. Our mission is to defy history. It’s very clear that in this environment, the old playbook wasnot going to work.”
The Joint Committee on Taxation, the arm of Congress that models effects of tax cuts, estimates that onequarter of the benefits of the business tax cuts in the new law will go to Americans earning $1 million and up next year. Factoring in individual income tax cuts, those high earners will reap about 14 percent of the law’s benefits.