Governing the Nation From the Statehouses -- Executive Summary

Executive Summary

THE CONSERVATIVE THREAT IN THE STATEHOUSES Backed by many of the largest corporations in the country and networked into conservative think tanks and allied political operations, the American Legislative Exchange Council (ALEC) has helped draft and promote state legislation across the country that has crippled social service budgets, deregulated industries, slashed medical care for the poor and undermined consumer and worker protections in state after state.

• More than 2400 state lawmakers -- roughly one-third of all state legislators � are claimed as members of the conservative American Legislative Exchange Council (ALEC)
• 34 state Speakers of the House, 25 state Senate Presidents, 31 state Senate Leaders and 33 state House Leaders are ALEC members
• In 2004 alone, 1,108 ALEC model bills were introduced and 178 were enacted into law, a track record that ALEC and its conservative allies have been repeating year after year.

WHY STATE POLICY MATTERS What the rightwing recognizes is that with a coordinated strategy, a movement can govern the nation from the statehouses. Progressives need to fully understand why state policy matters and how powerful, pervasive and influential those policies are in our everyday lives.

• Domestic Spending: State and local revenues account for 16.2% of the Gross Domestic Product, almost exactly equal to federal revenues as a percentage of GDP. Increasing �flexibility� and �waivers� offered to states in how they administer programs like TANF and Medicaid increases the stakes in who controls state legislatures.
• Law and Tort Liability: State courts reported 17 million civil cases in 2003, including contract, tort and real property disputes. Through state law and liability rules, the states regulate trillions of dollars of commerce in the economy.
• Employment Rights: While most media focus remains on the application of federal civil rights or labor laws, these only protect employment rights against a baseline of job protections determined by state law.
• Consumer Rights and Business Regulation: In consumer law, most rights are determined by state law and states still retain great power to regulate industries, especially when they combine efforts through regional �compacts,� a recently emerging trend in environmental regulation.
• Public Pension Funds: One of the least understood areas of increasing state power is that wielded by public pension funds, which now control $2.7 trillion in financial assets.
• Criminal Justice: While there were 170,535 federal prisoners in 2004, this is dwarfed by the 1.9 million prisoners in state and local prisons and jails. Criminal sentencing decisions that have decimated a generation of young people, especially in minority communities, were made in statehouses, not on Capitol Hill.

HOW ALEC AND THE RIGHTWING OPERATE IN THE STATES At its heart, ALEC is little more than a tax-exempt recipient and front for some of the nation�s largest corporations, as companies ranging from Enron, ExxonMobil, Coors Brewing, Pfizer to Phillip Morris have paid for ALEC�s expansion and success:

• Corporate-dominated task forces of ALEC and other non-profit groups provide industry with, in the words of one former industry co-chair, �a channel to express its interests to a majority of the states� speakers of the house and presidents of the senate.�
• A key to ALEC�s success is that it coordinates the introduction of legislation with national experts, local political operations, state-based think tanks, national issue-based lobbying networks and direct corporate lobbying in the statehouses.
• States are vulnerable to rightwing takeover because most state legislatures are made up of poorly paid, part-time lawmakers with few if any staff to research or evaluate the laws they are asked to approve. There are therefore few staff who can challenge the expertise presented by conservative operatives or to uncover the hidden payoffs for corporate interests contained in the legislation.
• By setting the agenda in the statehouses, even a legislative defeat gives ALEC�s legislative allies an issue to run on at the next election, with progressives always reacting and often having little to say in response.

THE ALEC AGENDA: THE IMMEDIATE PAYOFF TO ITS CORPORATE BACKERS The rightwing network fronted by ALEC gives a "public interest" sheen to the raw special pleading of corporate interests that have bought a slot on the organization�s board. Some examples of its recent agenda items includes:

• Defending Oil Companies from Global Warming Legislation: Backed by the oil industry, ALEC lined up legislators to �temporarily� lower taxes on gasoline to divert attention from record oil company profits. ALEC has also worked to undermine regulations aimed at curbing the carbon dioxide emissions leading to global warming.
• Serving Big Pharma: Fighting the Importation of Prescription Drugs: ALEC and its drug company backers have mounted a full-scale campaign to defeat initiatives by cities and states to promote importing prescription medicines from Canada.
• Protecting Low-Wage Employers: Rolling Back Labor Rights: ALEC has promoted legislation to block local governments from raising local minimum wages or even requiring government contractors to pay a fair wage to their employees.
• Telecoms: Blocking Municipal Broadband at Expense of High Tech: ALEC has worked to block or hamstring cities trying to build cheaper or even free Internet services for their residents.
• Helping Insurance Companies Fight Off Corporate Accountability: ALEC has been promoting a campaign to stop state insurance commissioners from requiring insurance companies to meet the same accountability and auditing rules that were imposed on publicly-traded corporations in the wake of the Enron debacle.
• The Bankers Payoff from Long Term Health Care �Reform�: ALEC has been advocating cracking down on seniors who shelter income in a home while using Medicaid to finance long term care, a campaign to undermine health care for seniors and force them to buy �reverse annuity mortgages" from ALEC's financial industry patrons.

THE ALEC STRATEGY: STRUCTURAL ASSAULT ON PROGRESSIVE POWER While these individual campaigns enriching its corporate backers are bad enough, the real danger from ALEC and its associated organizations is their promotion of coordinated strategies to structurally undermine the very capacities of government that restrain corporate power. Their goal is to fuel campaigns that fracture progressive alliances and dismantle every tool of government. These strategic campaigns include:

• Limiting State and Local Tax Powers: By cutting tax revenues and imposing constitutional rules limiting state taxing powers, conservatives seek to make it politically impossible to fund social needs through government action and pit progressives against each other in competition over scarce financial resources.
• Litigation "Reform": Shutting the Courtroom Door: A key conservative goal is diminishing or even eliminating jury power to hold corporations accountable. This attack includes promoting urban legends of reckless jury awards, limiting juries' ability to award damages, preventing juries from even hearing evidence of corporate wrong-doing and designing legislation that forces low-ball settlements on poor plaintiffs.
• Gutting State Regulatory Powers: Conservatives aim to shut down the enforcement of business regulations, including limiting the powers of state attorneys generals, preventing citizen�s lawsuits to enforce environmental and other regulations, crippling agency enforcement budgets, and eliminating state regulations altogether for many industries.
• Privatization- Busting Public Unions and Disabling Public Accountability: Privatization of public services serves multiple conservative goals, from undermining public employee unions to opening up government programs to religious fundamentalist allies to rewarding political contributors who fund the whole rightwing electoral machine.
• Dismantling Public Employee Pensions: Fearing use of pension funds to hold corporations accountable, conservatives have launched a far ranging campaign to dismantle current pension systems controlled by state officials and worker representatives in favor of 401(k)-style individual accounts managed by the financial services industry.
• Using State Law to Defund the Left: Conservatives increasingly use control of government to cut off the sources of funding for progressive politics. Shutting down the tort system cuts off funds to trial lawyers, so-called "paycheck protection" laws undermine union political action, and privatization shifts money from public employee activists to conservative corporate actors.
• Wedge Issues by the Right: A whole set of other issues, from gay marriage to attacks on welfare recipients, needless debates on creationism and challenges to sex education in the schools, are all used by the rightwing to create strains between different wings of the progressive movement and distract progressives from promoting a real alternative vision that would create a broader-based electoral alliance.
• Federalism Hypocrisy: Crippling State Power and Local Home Rule: ALEC and similar "state" groups give the conservative movement rhetorical cover for their hypocrisy in passing federal laws that preempt state power. The goal is a perverse system of federalism where states block progressive local government power, the federal government blocks progressive state action, and then the federal courts step in to block progressive federal laws � a neat conservative system of mutually-assured destruction of governmental tools at all levels of government.

HOW PROGRESSIVES CAN FIGHT BACK The key for progressives is to fight back, coordinate our own battles and think as strategically as ALEC and its allies do to win back power at the state level.

• First, we need to develop a deep national network of progressive legislators supported by grassroots organizations. Progressives need to use every tool of grassroots mobilization to deploy both strong policies and innovative strategies to beat the conservatives at their own game.
• Second, we need to promote a set of unabashedly popular and fundamentally sound issues that define the progressive state agenda in the minds of voters, such issues include:
  • a higher minimum wage;
  • extending health care to their states' citizens;
  • progressive family issues like paid family leave and making pre-kindergarten available to all children;
  • protecting workplace free speech and employee privacy;
  • promoting a clean energy policy that builds jobs in each state;
• And, finally, progressives need to develop a larger set of policies that beat back the rightwing attack and strategically turn the tables on conservatives. Examples include
  • easing the burden of property taxes to undermine "tax revolt" politics;
  • promoting policies to raise revenues by cracking down on corporate tax evaders;
  • undermining attacks by conservatives on families receiving Medicaid for long-term health care by funding long-term care through estate taxes on the truly wealthy;
  • challenging attacks on the tort system by promoting the "right to trial" and exposing shady secret settlements that cover-up corporate wrongdoing;
  • establishing "truth in contracting" laws to force conservatives to prove financial savings from privatization of government services;
  • building new coalitions for prison reform by using money cut from prison spending for economic development in both the communities in which prisoners are released and the communities in which prisons are located;
  • using public pensions to promote job growth and affordable housing, thereby building new constituencies with a stake in protecting them from privatization;
  • reclaiming corporate property for public space, from free speech on big box retail sidewalks to opening up private land to fishing, hunting and other outdoor recreation;
  • requiring insurance companies to provide contraception on the same terms as any other kind of medication as an issue to divide moderates from rightwing extremists;
  • promoting resolutions against federal preemption of state laws as a way to expose the hypocrisy of conservatives on "states rights."

Progressives can keep reacting and playing defense against conservatives and their corporate sponsors, or we can learn these lessons and turn the tables on the rightwing. If progressive legislators are armed with the legislative tools and mobilized support of our grassroots organizations, we can reverse conservative dominance of public policy and begin a new era of progressive governance of our nation's statehouses.