Trump Tax Cut Pays Dividends for GOP

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 closely aligned with Speaker Paul D. Ryan that is flooding the airwaves and front porches of swing congressional districts with increasingly sharp attacks on the 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;

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; and a collection of other corporations, executives and financial fund managers.

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. Instead, candidates and the Congressional Leadership Fund have focused their campaign advertisements on more visceral issues such as crime and immigration.

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 had threatened to sit out the 2018 campaign. Now, flush with big checks from a handful of deep-pocketed 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 some of his donors did not favor all the provisions of the tax law, but all of them hailed its passage as the rich fruits of total Republican control of Washington.

Had the tax bill failed, Bliss said, “I think they would have been very disappointed and very deflated.” But Bliss said 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 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 Ryan flew to Las Vegas with Bliss and Norm Coleman, a former senator and chairman of the Republican Jewish Coalition, to meet with Adelson.

After the speaker laid out his case for help defending the Republican House majority, he stepped out of the room while 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.”

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, 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 was not going to work.”

Some of the group’s advertising so far has focused on tax cuts, in a way that contrasts with Republican candidates’ strategies. The tax-themed ads do not focus on corporate tax cuts — the centerpiece of the law, both in dollar amount and in the boost to economic growth that Republicans have promised it will deliver — but instead highlight income tax cuts for middle-class individuals.

But most of the ads, in a long list of districts in New York, California, Kentucky, Kansas, Nebraska and Ohio, paint Democratic candidates as left-wing radicals, far out of the mainstream, and puppets of the House Democratic leader, Nancy Pelosi.

The Joint Committee on Taxation, the arm of Congress that models effects of tax cuts, estimates that one-quarter 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. But those individual cuts are set to expire at the end of 2025, while the corporate cuts are permanent.

Largely as a result, the committee estimates that Americans earning more than $1 million annually will benefit more from the law than any other income group in 2027, while the typical American earning $75,000 a year or less will see a tax increase.

The heavy donors to the fund who stand to reap large benefits from the law’s business and personal tax breaks include oil giants Chevron and ConocoPhillips, investing mogul Charles Schwab, and Robert C. McNair, the owner of the Houston Texans of the NFL.

A person close to the largest donor, Adelson, said the billionaire did not discuss his savings on the tax bill in the context of his donations to the Congressional Leadership Fund. His contributions, the person said, were more a product of his broader political philosophy.

In some of its early ads, the super PAC has used voters in congressional districts to say how the tax cut has helped them. Bliss said he had “all but begged every campaign to run on the middle-class tax cut” — an appeal that so far has not often been heeded.

“It’s a central thematic,” he said. “In this environment, if you don’t make clear the contrasts between the two teams, then you are not going to get the benefit of the doubt.” Two who have, he said — Carlos Curbelo in Florida and Will Hurd in Texas — are doing better than many other incumbents who serve in districts won by Hillary Clinton in 2016.

Otherwise, the headwinds are strong. “Absolutely Democrats have more energy than we do,” he said.

The super PAC has field offices in 40 congressional districts around the country. Bliss said they had identified 50,000 to 70,000 voters in each of them and began trying to persuade them more than a year ago with a regular campaign of door knocking, using a positive message in contrast to what voters see on television.

In Nebraska’s 2nd Congressional District, for instance, the super PAC has a target group of voters it repeatedly reminds of the attention Rep. Don Bacon has paid to the preservation of Offutt Air Force Base, a major economic engine in the district, he said.

The group is also defying convention by airing television ads in more than a dozen districts in August, a time when many voters may not be paying attention to politics.

“This is a really tough environment,” Bliss said. “If you don’t win in August, you are not going to win in October.”

The Congressional Leadership Fund spent more than $3 million to help the campaign of Troy Balderson, the Republican candidate in a House special election in Ohio this month. Balderson is leading, but the race has not been officially decided.

But when there are more than three or four dozen close races, that kind of focus will not be “sustainable” in the fall, Bliss conceded.

So his attention will most likely be focused on races where his operatives have been knocking on doors for almost 18 months to “break through the news and break through the incredible cynicism and skepticism in the electorate.”

“The outside group is the hammer,” he said, “and must first and foremost always be the hammer.”

This article originally appeared in
The New York Times.

Jim Tankersley and Michael Tackett © 2018 The New York Times

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