Inside Obama’s Idea Factory in Washington

Amid their self-congratulatory celebrations of the past few weeks, it’s easy to forget that Democrats were in a state of absolute despair not so long ago. At the dawn of 2003, the House, the Senate and the White House lay in Republican hands, while the Supreme Court threatened to tilt further to the right. Rep. Tom Delay, then the Republican majority leader, was overheard calling out, while smoking a cigar in a government building, “I am the federal government.”

If liberals had any hopes of being able to make the same claims in the near future, they knew they needed to be more like conservatives. Wealthy Democrats wanted to have ideological rabble rousers like Rush Limbaugh and activist breeding grounds like the College Republicans to create a new generation of shock troops. But most of all, to have a real shot at regaining control of Washington, they wanted to plot an intellectual coup, spearheaded by an aggressive idea factory like the Heritage Foundation. (See pictures from the historic Election Day.)

Five years later, they have that, and a lot more, in the Center for American Progress (CAP), the most influential independent organization in Obama’s nascent Washington. CAP was the brainchild of former Clinton White House chief of staff John Podesta, who dutifully worked wealthy dinner parties with a simple idea: He would create a new organization, a “think tank on steroids,” to help progressive ideas regain power. Tom Daschle, once the top Democrat in the Senate, got on board, calling it an “action tank.” Sarah Wartell, who would become Podesta’s deputy, had a more homely description: “Not your grandmother’s think tank.”

And not since the Heritage Foundation helped guide Ronald Reagan’s transition in 1981 has a single outside group held so much sway. Just as candidate Obama depended on CAP during the campaign for opposition research and talking points, President-elect Obama has effectively contracted out the management of his own government’s formation to Podesta. “The Podesta group was formed to bring Democrats back into the presidency, that was its purpose of being,” says Stephen Hess, an expert on presidential transitions at the Brookings Institution, a much more traditional think tank.

It is difficult to overstate the influence in Obamaland of CAP, a group with roughly $25 million in annual funding from mostly anonymous individuals, corporations and unions. Podesta himself is leading Obama’s transition effort, holding press conferences to speak for the President-elect, with an operation beneath him filled with CAP alum. The transition’s operations director, the general counsel and the co-director all have come over from similar jobs at the think tank. At least six other CAP alums or board members, including Daschle and former EPA Commissioner Carol Browner, continue to advise the transition or campaign on matters of policy; Daschle looks likely to become a part of Obama’s cabinet as Secretary of Health and Human Services, in part because he wrote a book about health policy, with funding from CAP.

But personnel only tells part of the story. “There was not a policy ad that Obama did that did not quote us,” boasts Jennifer Palmieri, who does communications for the think tank, and its more politically active offshoot, the Center for American Progress Action Fund. Remember the claim that John McCain wanted to give $4 billion in tax breaks to oil companies like Exxon? The Action Fund came up with that number. What about the dubious charge that McCain planned a 22% cut in Medicare? That was based on a speculative research paper by the same group. While most political ads cite journalists for their facts, the Obama campaign cited CAP research in nine different ads during the general election. More than five million households received mailers from unions that cited CAP in attacking McCain’s policy plans.

At the same time, and largely under the radar, CAP worked furiously during the elections to deliver talking points to overworked journalists, including those at Fox, MSNBC and ABC News, who repeatedly used CAP and its Action Fund’s research to quiz McCain surrogates. The hosts and guests of the Sunday news shows received routine briefings by CAP researchers. Liberal talk radio hosts and Democratic surrogates also receive daily talking points from the group. Meanwhile, liberal blogs have long become an echo chamber for CAP’s own Internet outreach program, which produces reams of information that highlighted contradictions or hypocrisies in McCain’s policy positions and campaign rhetoric. (The above quote from DeLay, for instance, was originally reported by the Washington Post, but thanks to the work of CAP bloggers doing outreach to college students it has been replicated on websites across the Internet. Left out of the echo is the claim by DeLay aides to the Post that, when confronted about his cigar, DeLay actually said “I’m with the federal government.”)

When Democrats first started dreaming up a powerful think tank like CAP, they studied carefully how conservative organizations like Heritage had been so successful. That would explain the fact that in January Podesta’s organization plans to publish a 600-page manuscript called Change for America: A Progressive Blueprint For The 44th President that is consciously modeled on a very similar conservative document produced at the dawn of the Reagan era. That 1,000-page book written by the Heritage Foundation in 1981, Mandate For Leadership, became the blueprint for the incoming administration of Ronald Reagan. The book was placed on the seat of all the Reagan Cabinet officials at their first meeting, making about 2,000 recommendations for how Reagan should govern. Lee Edwards, a Heritage historian, estimates that about 60% of its ideas were adopted in whole or in part by Reagan. “We are a little flattered by what the Center for American Progress is doing,” Edwards says.

The deep pocket donors responsible for CAP’s success are not bragging, at least in public anyway. The group was formed with significant seed money by the families of three wealthy liberals, financier George Soros, Progressive insurance magnate Peter Lewis, and Herb and Marion Sandler, who once owned Golden West Savings and Loan. All three benefactors are represented directly or indirectly on the CAP board. Since 2005, the larger group of wealthy liberals, known as the Democracy Alliance, has also begun to contribute significant sums to the effort. Rob McKay, the heir to a Taco Bell fortune and chairman of the Alliance, says that between 30% and 50% of the Alliance’s 107 wealthy members have given money to the Center for American Progress, or its political offshoot, the Center for American Progress Action Fund. (Corporate benefactors are not disclosed, though the center bars companies from funding specific research projects.)

In mid-November, the Alliance held a meeting in Washington, which was closed to the press. McKay described the mood as buoyant, in no small part because of how far progressive philanthropy has come from just several years ago. “A great victory happened sooner than any of us would have expected,” McKay said, adding that the process of changing federal policies and programs has yet to begin. “Now the real work begins.”

Podesta and other CAP staff have made clear that they do not want the organization to become an arm of the Obama Administration, but there will be clear pressures . “Much of the change is yet to happen,” says Wartell, who is running CAP until Podesta completes the transition and returns. “The idea here is to be a think tank. It’s not to be a government is waiting. We created this institution to be here 30 years from now.”

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