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In Rebuke of Tennessee Governor, Koch Group Shows Its Power

Image: David Jones

David Jones of Lawrenceburg, Tenn., and other opponents of Gov. Bill Haslam's Insure Tennessee proposal watch a committee hearing on a television in the legislative office complex in Nashville, Tenn., on Tuesday, Feb. 3, 2015. Haslam has said the program would cover 280,000 low-income Tennesseans using money available under President Barack Obama's health care law. (AP Photo/Erik Schelzig) Erik Schelzig / AP

NASHVILLE-In December, Tennessee Gov. Bill Haslam, a Republican, got the deal he wanted from the Obama administration: Tennessee would accept more than $1 billion in federal funding to expand Medicaid, as allowed for in the Affordable Care Act, but Obama aides would allow Haslam to essentially write staunchly conservative ideas into the program's rules for the state. He dubbed the reformed Medicaid program "Insure Tennessee."

But the state's chapter of Americans for Prosperity, the national conservative group whose foundation is chaired by controversial billionaire David Koch, argued Haslam was just trying to trick conservatives into implementing Obamacare in their state by giving it a new name. AFP campaigned aggressively Haslam's plans for the next six weeks, even running radio ads blasting GOP state legislators who said they might vote for it.

On Wednesday, Haslam's bill died in a committee of the Tennessee state senate. The vote was one of the clearest illustrations of the increasing power of AFP and other conservative groups funded in part by the Koch brothers.

When the coalition of conservative groups allied with Charles and David Koch announced recently they would spend $889 million over the next two years, much of the discussion was about how that money could shape the upcoming presidential election. But AFP and other Koch-backed conservative organizations may be having their biggest impact on state politics, where targeted advertising and a strong organization can make a huge difference.

"We're the third-worst state in the country for accepting federal dollars," said Andrew Ogles, AFP's state director said in an interview here. "It's time for us to stop. Anytime we have a problem, instead of coming up with a Tennessee solution, we run to the federal government with our hands out. No more."

The aggressive action in Tennessee by AFP was not unusual. The group, started in 2004, now has chapters in 34 states. The state operations' general goals, like AFP and other Koch-allied groups nationally, are to oppose tax hikes, increases in government spending and what they view as excessive regulation.

But AFP is playing a unique role in effectively serving as a conservative watchdog against fellow Republicans at the state level. In many states in the West and South, like Tennessee, both houses of the state legislature are controlled by the GOP and the governor is also a Republican. The policy debates are between more moderate Republicans and the party's conservative wing.

And AFP is holding the line on conservatism. In Florida, AFP is opposing a bill advocated by key Republicans in the state legislature that would grant tax breaks for television and movie companies that produce shows and films in the state. In Iowa, the group is trying to block any increases in gas taxes, which have been suggested by Republican Gov. Terry Branstad.

The group's influence looms over the future of Obamacare. Twenty-two states, nearly all dominated by Republicans, have so far declined to expand their Medicaid programs under Obamacare. Some, like Texas, simply have conservative governors who are ideologically opposed to putting more people on government-run health programs.

But in other states, the ACA has pitted uninsured people and hospitals, which stand to gain billions in funding if more people have health insurance, against conservative activists and AFP.

And AFP's victory this week in Tennessee showed how its activists may be able to beat back even Republican governors who want those Medicaid dollars.

In Tennessee, AFP had a strong opponent: Haslam won 70 percent of the vote in his reelection bid in November and is so well-respected by fellow GOP leaders that he recently became head of the Republican Governors Association.

To sell his plan, the governor toured the state over the last two months, stopping in eight cities with the same message: his program could help fund hospitals and cover more than 200,000 low-income people. "This was not Obamacare," he emphasized constantly, since the program would have co-pays, premiums and other conservative ideas not in traditional Medicaid.

And Haslam's allies circulated a polling memo to GOP state legislators this week, written by the firm of longtime national GOP pollster Whit Ayres, showing that 85 percent of Republican voters in Tennessee oppose "Obamacare," but just 16 percent oppose "Insure Tennessee." The memo was blunt about its audience, including a line about "Republican members of the State Legislature pondering the political consequences in a Republican primary of supporting the Governor's plan."

But AFP had mobilized as well. Its radio ads warned the state's conservatives that some Republican legislators might "vote for Obamacare." On its Facebook page, the group paired pictures of Republican state legislators with photos of Obama's face, accusing the lawmakers of "betraying Tennesseans" by considering a vote for Haslam's proposal.

Then on Tuesday, with the state legislature in a special session to consider "Insure Tennessee," AFP brought in its cavalry.

When the legislators walked into a hearing Tuesday morning to debate the measure, they looked out from the dais to a room packed with more than 100 people wearing red "Americans for Prosperity" t-shirts. Some of the activists had traveled on an AFP-chartered bus from Knoxville, more than two hours away, to pack the hearing well in advance of its 9:00 AM start time.

"I'm skeptical of government-run programs," said Louis Stans, a retired engineer who was part of the AFP group. Medicare, Stans said, was "better" and he had "paid into it my whole life."

The sea of red crowded out representatives of the Tennessee Hospital Association, one of the big advocates of the Medicaid expansion, who were left to stand in the back or unable to get into the room at all.

"They always mention that David Koch is our chairman," Ogles told the conservative activists, as they waited for the legislators to walk in, "but our strength is our numbers."

The AFP effort made some Republican legislators wary and others angry.

"We can't have a politics of intimidation," said Glen Casada, one of the Republican leaders of the Tennessee House. Casada was an early opponent of the Medicaid expansion, but he publicly criticized AFP for launching ads attacking fellow conservatives.

Some of the Tennessee legislators, like Casada, had announced their opposition to Haslam's plan weeks ago. But many of them, on the eve of the vote this week, simply wouldn't say how they would vote, including House Speaker Beth Harwell, a Republican who is usually a Haslam ally. The undecided kept arguing they needed more information, which both Haslam allies and opponents said privately was really an indication that undecided Republicans were weighing the politics of the vote.

"The problem is not many in the public understand the program," said Craig Becker, president of the Tennessee Hospital Association. "They just hear from Americans for Prosperity, the Koch brothers, saying 'this is Obamacare' and they say,'we don't like that."

The committee's rejection of Haslam's bill saved many of the legislators from a choice they did not want to make: either rebuking the well-liked governor or conservative activists they fear.

"We made a decision today, but we didn't do anything to answer the problem, and the problem is that there are hundreds of thousands of Tennesseans who need health care who could get that in a way that doesn't cost the state anything," a frustrated Haslam told reporters on Wednesday after the committee's vote.

He added, "I said from the very beginning it would be difficult … And I think what you saw today is a measure of just how difficult that is."

AFP officials were thrilled with the result, arguing it will keep other Republicans from looking to expand Medicaid.

"I would hope other governors look at Tennessee as a example," said Levi Russell, an AFP national spokesman.