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Cash pours into Social Security fight

Independent groups that helped candidates in 2004 now plan to raise big money for a public policy debate.

By ANITA KUMAR
Published February 21, 2005

WASHINGTON - Independent groups spent millions of dollars influencing public opinion during the battle for the White House last year.

The election came and went, but the groups never left.

The largest of the so-called 527 groups, some of which became household names, are still in business and focusing on an entirely different fight: Social Security.

They're talking about raising big money - just like last time.

Progress for America and the Club for Growth, which backed President Bush, plan to raise a combined $30-million. The Campaign for America's Future is teaming up with other liberal groups to collect $40-million. And MoveOn.org, which supported Democrat John Kerry, also expects to spend millions.

"Social Security is a massive project," said Brian McCabe, head of Progress for America. "It's attracted a lot of attention - definitely an astronomical amount of attention."

Not surprisingly, groups that favored Bush now support his proposal to let younger workers use some of their payroll taxes to buy stocks and bonds. Those that supported Kerry are fighting investment accounts and any sort of radical reform to Social Security.

"They raised and spent a lot of money, developed a following and name recognition," said Steven Weiss of the Center for Responsive Politics, a nonpartisan group that tracks money in politics. "Given that they were so successful, I don't think we expected them to go away."

Some wonder if the groups are just using the frenzy surrounding Social Security - the public policy debate du jour - to fill their coffers. Or whether they'll hold onto some of the money until next year when they can use it to influence House and Senate elections.

"Certainly, they are using the issue to make money," said Aron Pilhofer, database editor at the Center for Public Integrity, a nonpartisan research organization. "It's certainly an issue that's going to resonate for awhile."

It's also possible, Weiss said, that the groups are just eager to get involved now so they will be remembered by the parties for their help later.

For Democrats, who lost the White House and seats in Congress last year, Social Security offers them a chance to finally win something big. For Republicans, it's a chance to stand behind their president, who wants to add the revamping of Social Security to his legacy.

"They know they could get recognized for carrying water on this issue," Weiss said. "This is the way politics works."

The 527 groups, named after a section of the Internal Revenue Code, can bypass the usual limits on campaign donations and raise unlimited amounts of money - though it can't be spent directly on a candidate.

That proved to be a huge advantage in the presidential race. The Swift Boat Veterans for Truth raised millions and greatly influenced the election by running TV ads calling Kerry dishonest about his service in the Vietnam War. MoveOn.org fought back, and looked at Bush's military record.

That advantage does not apply to the Social Security debate; it's not like the groups need to use the 527 exemption to get around campaign limits for individual candidates.

Instead, in an issue campaign, the groups use a different account that allows them to raise unlimited amounts of money without having to disclose their donors. It's the same 501(c) exemption that other social advocacy groups, labor unions and business coalitions use.

They must disclose all contributions of $5,000 or more to the IRS, but they don't have to be disclosed to the public.

Last year was the first time 527s played a major role in an election. Estimates show as many as 70 of them raised and spent just over a half-billion dollars during the two-year election cycle - twice the amount spent during the 2002 cycle.

Just weeks after the November elections, the largest of the groups began setting their sights on Social Security. The big push began in the days leading up to Bush's unveiling of his proposal for individual investment accounts at the State of the Union address Feb. 2.

"This is a very significant policy issue," said David Keating, executive director of the Club for Growth, which raised $22-million in 2003-04. "Battles like these come along every so often. If it doesn't happen now, then when?"

Toby Chaudhuri, communications director for Campaign for America's Future, said the group is treating its effort to block Social Security reform like a political campaign, complete with a war room and an office near the White House.

Progress for America, the Club for Growth and MoveOn.org began airing TV ads before Congress had considered a specific proposal.

Their strategy is to target voters instead of politicians, leaving them to lobby their elected officials. MoveOn.org aired an ad in the Panhandle district of Rep. Allen Boyd, a Democrat who supports investment accounts, though not necessarily the president's proposal.

The fight is being compared to the one that killed President Bill Clinton's sweeping health care plan in 1994 at a time when Democrats controlled both chambers of Congress. Not as much money was spent, but health care insurers are credited with defeating the proposal by running TV ads showing a generic middle-class couple called Harry and Louise sitting at their kitchen table expressing their fears.

The Social Security debate involves a myriad of other groups, from the seniors advocacy group AARP to business coalitions, such as the new Coalition for Modernization and Protection of America's Social Security.

Noticeably missing among the groups involved in the Social Security debate is America Coming Together, a Democratic get-out-the-vote effort that raised $78-million, more than any other 527 organization. The group did not return calls for comment.

"It's still early but it looks like it's going to be unprecedented," AARP policy director John Rother said of the groups involved in the battle over Social Security. "I really haven't see anything this intense before."

--Times researcher Kitty Bennett contributed to this report.

[Last modified February 21, 2005, 04:46:35]