The Power of Ideas: The Heritage Foundation at 25 Years

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The first book-length history of the largest and most influential public policy think tank in America.
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Overview

The first book-length history of the largest and most influential public policy think tank in America.
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Editorial Reviews

Publishers Weekly - Publisher's Weekly
This look inside one of Washington's think tanksan authorized history of the conservative Heritage Foundation published to coincide with its 25th anniversarydocuments its role in hatching ideas that have affected the political landscape, e.g., privatizing government services, designating inner-city enterprise zones, formulating domestic antipoverty programs based on less government intervention and greater individual responsibility. The foundation's perceived influence in shaping Ronald Reagan's foreign policy and economic program, its impact on U.S. policy toward the United Nations and its role in President Clinton's welfare-reform legislation are aired, as are Heritage's disputes with President Bush. The book also lays out in detail Heritage's consumer-choice plan for health-care reform. Edwards, a professor of politics at Catholic University of America, has written an encomium of the foundation's fund-raising, networking, media outreach and idea-generation. Photos. (Feb.)
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Product Details

  • ISBN-13: 9780915463770
  • Publisher: Jameson Books, Incorporated
  • Publication date: 2/28/1998
  • Pages: 360
  • Product dimensions: 6.24 (w) x 9.29 (h) x 1.28 (d)

Read an Excerpt



Chapter One

A Modest Beginning

    The early 1970s were the worst of times, and the best of times in whichto launch a conservative think tank in Washington, D.C. Conservativeleaders and conservative ideas were out of public favor. Vice PresidentSpiro T. Agnew, the hero of many on the Right, resigned in disgrace inSeptember 1973. Congressman Gerald Ford of Michigan, Agnew's successor,was the choice of the Republican establishment, not a conservative likeGovernor Ronald Reagan or Senator Barry M. Goldwater. The preceding year,Congressman John Ashbrook of Ohio, who had helped start the DraftGoldwater movement a decade earlier, had been trounced by President Nixonin the New Hampshire Republican presidential primary.

    In foreign parts, detente was riding high in the saddle. The presidenttraveled to Communist China to kowtow to Mao Zedong; an old ally andfriend, the Republic of China, was kicked out of the United Nations. TheUnited States withdrew from Vietnam despite conservative warnings aboutfalling dominos in Southeast Asia, and Nixon signed SALT I, giving theSoviet Union nuclear parity with America. On the domestic front, thepresident instituted wage and price controls and tried to implement suchwelfarist proposals as the Family Assistance Plan. Nixon proudlyproclaimed, "I am now a Keynesian in economics."

    As for think tanks, the American Enterprise Institute and the Centerfor Strategic and International Studies at Georgetown University wereproviding most of the analysis for Washington conservatives, with AEIfocusing on domestic policy and CSIS on foreign and nationalsecurityaffairs. A confidential memorandum for the February 1974 dinnercelebrating William J. Baroody Sr.'s twentieth year with AEI listed astaff of fifty, twenty-four adjunct scholars, a "Talent Bank" of sixthousand scholars and experts, the publication of sixty-four books andstudies in 1973, the production of twelve one-hour television programs theprevious year, and an annual budget of $3 million.

    And yet, given liberalism's dominance, there was a real need for anaggressively conservative think tank in one place—on Capitol Hill.Liberals had been kings of Congress for more years than anyone couldcount, and conservatives seemed unable to make more than a sporadicdifference in the people's branch of government.

    Envious conservatives watched the powerful liberal coalition ofacademics, think tank analysts, members of Congress, White House aides,interest group officials, and journalists run much of the business of thenation's capital and wondered: "Why can't we put together an operationlike that?" And wondered some more. Yet the answer was clear: there was noconservative alternative to the Brookings Institution, the catalyst formany of the legislative successes of the liberals during the 1960s andearly 1970s.

    Time and again, a liberal professor would write an article suggestingthe creation of a new federal program. The article would be quotedapprovingly in the pages of the New York Times or the Washington Post.Studies of the suggested program would be underwritten by the Ford orRockefeller Foundation. Scholars at Brookings would meet with members ofCongress and their staffs to discuss how the program might belegislatively framed. Special interest groups would endorse the proposedlegislation and contact their congressmen and senators. And, finally, abroad-based coalition would emerge—seemingly out of nowhere—backing thebill. The rest would roll smoothly into place: The liberal idea wouldbecome law, a new government agency would be created, a new socialexperiment would begin, and taxes would be raised.

    A key moment in this alchemy occurred when Brookings' expertstransmuted the academic's theoretical suggestion into a legislativeproposal.

    Such legislative legerdemain was old hat to Brookings, which had beenan advocate for expanding the federal government since 1921. That year,Brookings' predecessor, the Institute for Government Research (IGR),engineered passage of the Budget and Accounting Act, creating the Bureauof the Budget. According to Brookings historian James Allen Smith, the IGRdrafted House and Senate versions of the budget reform bill,organized congressional testimony, and arranged publicity to generatepublic support. The institute was so committed to the idea of anexecutive-controlled budget process at the federal level that it evenhoused the new bureau and provided staff "until it could secure its ownoffices and personnel."

    Brookings performed the same service for the Kennedy transition teamfour decades later, supplying offices, a library, and meeting rooms at theinstitution's headquarters on Massachusetts Avenue, a block from DupontCircle. According to Smith, the Kennedy transition task forces "reliedheavily" on nearly one hundred scholars who were working on policy issuesfor Brookings.

    The liberal think tank's direct influence continued into the Carteryears. A Brookings study in 1976, for example, recommended that the B-1bomber be dropped from the Pentagon's arsenal. Six months after takingoffice, President Carter announced his decision to scrap plans forproducing and deploying the B-1. Another 1976 Brookings report urged thatthe United States withdraw its ground troops from South Korea. One yearlater, in the face of strong military objections, Carter released plansfor just such a withdrawal, although he later changed his mind.

    As the future head of The Heritage Foundation described the state oflegislative affairs in the early 1970s, "The Left had a finely tunedpolicymaking machine, and the Right had nothing to match it."

Timing Is Everything

The congressional debate over the supersonic transport (SST) in the springof 1971 was the catalyst for the founding of a conservative public policyorganization that could get the right information to members of Congressand to their staffs on time.

    Prior to votes in the House and Senate in March, supporters andopponents of the SST lobbied Congress furiously. Backers argued thatcontinuing development of the giant high-speed airliner (federally fundedsince 1962) was necessary to maintain American superiority in aerospacetechnology and marketing, and to avoid unemployment in the aerospaceindustry. The opposition charged that a fleet of SSTs would contaminatethe atmosphere and could even "trigger a cancer-producing fallout." Italso asserted that no broad-based market existed for the aircraft which,they said, would cater only to wealthy travelers.

    Most conservatives felt that funds for the supersonic transport shouldcome from the private rather than the public sector, although some favoredcontinuing the program at taxpayer expense to maintain U.S.technological superiority over the Soviets (who began SST test flightsthat year). But where was the authoritative analysis that could be used ina floor debate?

    Shortly after the Senate voted—by only 51-46—to halt government supportof a supersonic transport plane, two young conservative staffers met forone of their frequent breakfasts in the basement cafeteria of the U.S.Capitol. Twenty-eight-year-old Paul M. Weyrich was press secretary toSenator Gordon Allott (R-Colo.). Edwin J. Feulner Jr., just thirty, wasadministrative assistant to Congressman Philip Crane, an outspokenconservative Republican from Illinois. Both young men had been inspired byBarry Goldwater's principled run for the presidency in 1964 and calledthemselves movement conservatives.

    Weyrich was visibly upset. He held aloft a monograph by the AmericanEnterprise Institute that presented the pros and cons of the SST issue,fairly and concisely. It was just what busy Hill staffers needed to preparetheir members for debate. But the study had arrived in Senator Allott'soffices and been placed on Weyrich's desk a couple of days after theSenate vote. Informed by fellow conservative Morton Blackwell, then onthe senior staff of AEI, that the institute's tardiness was deliberate, acurious Weyrich called William J. Baroody Sr., AEI's president.

    "Great study," said Weyrich. "Why didn't we get it sooner?"

    Baroody's response was to the point, "We didn't want to try to affectthe outcome of the vote."

    Baroody's caution was understandable. As early as 1950, AEI (thencalled the American Enterprise Association) had been criticized by acongressional committee for presenting "only the viewpoint of bigbusiness" in its materials. In 1964, Bill Baroody was deeply involved inBarry Goldwater's presidential campaign, coordinating the writing of the candidate'sspeeches and position papers and consulting on an almost daily basis withGoldwater. Although Baroody had taken full official leave from AEI, hispolitical role had been noted by President Lyndon Johnson. In 1965,according to Charles Lichenstein, a long-time Baroody associate, therewas a "quite thorough IRS investigation" of AEI. That same year, AEI'sboard of trustees seriously debated whether it should replace Baroody asthe organization's president. Baroody survived, but he never forgot thatthink tanks and politics can be a dangerous mixture.

    Among the changes Baroody instituted cover the next several years werea withdrawal from current issues (e.g., the legislative analysis divisionwas eliminated) and an emphasis on a longer-range agenda. For young truebelievers like Weyrich and Feulner, AEI's deliberate noninvolvement in atimely policy debate was inexplicable.

    "It was at that moment," recalls Feulner, "that Paul and I decided thatconservatives needed an independent research institute designed toinfluence the policy debate as it was occurring in Congress—beforedecisions were made." They envisioned an activist think tank but separatefrom Congress and not officially connected to any political party.

    Although Weyrich and Feulner never talked with him about it, Patrick J.Buchanan, then working for Nixon aide H. R. Haldeman, had developed a plansimilar to the Weyrich-Feulner analysis. Buchanan had made himself theWhite House expert on "how the liberal beast operated" in Washington, andwithin days of Nixon's reelection in November 1972, he presented thepresident with a lengthy memorandum on how "to make permanent the NewMajority."

    An enduring Republican majority, Buchanan wrote, required the buildingof an institute that would serve as "the repository of its politicalbeliefs." Such an institute would have three roles: a "talent bank" forRepublicans in office, a "tax-exempt refuge" for them when out of office,and a "communications center" for Republican thinkers across the nation."AEI is not the answer," Buchanan said flatly. The tough youngconservative wanted an institution with imaginative leadership that wouldprovide "a realistic and principled alternative" to programs and policiesemanating from "an essentially liberal-left bureaucracy" and its allies like theBrookings Institution.

    The foundation for such an institute was, in fact, being laid.

Founding the Foundation

The idea of a conservative research organization surfaced in 1968 whenJames Lucier, an assistant to Senator Strom Thurmond (R-S.C.), introducedPaul Weyrich to Victor Fediay, an analyst at the Library of Congress.Fediay kept talking about the need for some kind of "outside" organizationthat would provide studies about current issues for senators. The threeconservatives agreed that conservative senators were often unable to get agrip on key issues for want of information, while liberal senators couldalways depend on the Brookings Institution. But, Fediay argued, what wasneeded was not a conservative think tank but a research firm that wouldprovide conservatively oriented materials gratis to members of Congressand would charge corporations a fee for the same materials. Throughoutthat year, Lucier, Weyrich, and Fediay expounded their idea to corporaterepresentatives whenever they could but were unable to spark any seriousinterest.

    Frustrated by the lack of response to their plan and the continuedineffectiveness of conservatives in Washington, Weyrich in early 1969telephoned a longtime friend and mentor, J. Frederic (Fritz) Rench, inRacine, Wisconsin, and asked for his help. Rench, a successful businessmanand Republican activist, drafted a prospectus, and that spring, Weyrich,Lucier, Fediay, and Dr. William Roberts, a professor of law at theCatholic University of America, flew to Wisconsin to confer with him.

    Rench listened to the four men complain loudly about theshortsightedness of the business community and then asked quietly, "Whereis your business plan?"

    Weyrich and the others admitted they didn't have one.

    "What is your budget?"

    They hadn't prepared one.

    "How can you expect businessmen," Rench asked, "to support somethingthat doesn't have a business plan or a budget?"

    There was no answer until Weyrich, rarely at a loss for words, said,"Will you write one for us?"

    Rench agreed and found himself, in the summer of 1969, ensconced inSenator Strom Thurmond's hideaway office in the bowels of the U.S.Capitol, writing and rewriting a business plan (including salaries, rent,telephone, printing, and office equipment) for a new venture calledAnalysis and Research Association, Inc. (ARA). Its annual budget was amodest $80,000.

    The four would-be entrepreneurs thanked Rench warmly for his laborsand began showing their new business plan to prospective corporateclients, but were still unable to find any takers. The future of ARA (andThe Heritage Foundation) now turned on the high temperature of BarbaraHughes, an assistant to Senator Allott. One morning in the summer of 1970,Hughes called in sick.

    That day a letter addressed to Allott arrived in the office.Ordinarily, it would have been directed by Hughes to the senator or hisadministrative assistant. Instead, it was given by an intern to presssecretary Weyrich. The letter was from Jack Wilson, who had just becomethe assistant for political affairs to Joseph Coors, the president of thelargest brewery west of the Mississippi and an outspoken conservative.

    Determined to have his company more involved in the political process,Coors told Jack Wilson to conduct a nationwide search for the right"investment" in the conservative movement. Wilson sent letters to a longlist of prominent political figures, including Colorado's senior U.S.senator, Gordon Allott, asking for suggestions.

    Weyrich recalls that his hands "began to tremble" as he read theletter. He immediately called Wilson and said, "We need to talk—I have anopportunity in mind for Mr. Coors."

    Wilson traveled to Washington where Weyrich, Lucier, and the othersexplained the urgent need on Capitol Hill for an independent researchoperation. "We razzle-dazzled him" so well, remembers Weyrich, that JosephCoors himself came to Washington for an in-depth briefing. Weyrich laid onan impressive program for the Colorado businessman, featuring SenatorCliff Hansen (R-Wyo.), Senator Strom Thurmond, Congressman Henry C.Schadeberg (R-Wis.), Congressman Ed Foreman (R-N.Mex.), and Walter Mote,an aide to Vice President Agnew. Hansen described how "the other side"controlled the information flow in Washington and asserted that Weyrichand his associates were "the guys" who could counter the liberals.

    Weyrich was excited about how well the presentation had gone until helearned that Coors was also considering "investing" in the AmericanEnterprise Institute. His high hopes collapsed. How could an unknown,untested research firm compete with a respected think tank that had beenoperating for nearly thirty years? Casting about for help, Weyricharranged for Coors and Wilson to talk with fellow conservative LynNofziger, a deputy assistant to President Nixon for congressionalrelations. Along with Ed Feulner, they met in Nofziger's large pastel-blueoffice in the Old Executive Office Building next to the White House.

    So, what about AEI? Coors asked Nofziger.

    "AEI?" repeated the White House aide. And, according to Weyrich, hestrolled over to a bookshelf and blew some dust off an AEI study. "That'swhat they're good for—collecting dust. They do great work but they're nottimely. What we need are studies for Congress while legislation is beingconsidered."

    Coors later told Weyrich that two things made him decide to go withAnalysis and Research Association, despite the obvious youth of itsprincipals: Lyn Nofziger's dismissal of AEI as too academic and ARA's"tremendous business plan."

    And that was the beginning. If there had been no ARA, and no Robert M.Schuchman Memorial Foundation (ARA's successor), there would, in alllikelihood, have been no Heritage Foundation.

The Coors Connection

ARA started as a joint venture with the Adolph Coors Company, with Coorsinvesting some $250,000 for 1971-1972. Jim Lucier served as ARA'spresident, and Jack Wilson as its treasurer. Its first offices were in abasement apartment behind the Supreme Court. ARA became immediatelyinvolved in researching and analyzing a number of key issues on CapitolHill, including the Family Assistance Plan. It contracted with RogerFreeman at the Hoover Institution to write an anti-FAP report. And it wasFreeman who, despite the objections of other Reagan aides, persuadedReagan, then governor of California, to testify against FAP before theSenate Finance Committee in February 1972. Weyrich recalls that SenatorRussell Long (D-La.) told Senator Carl T. Curtis (R-Neb.) that if Reagancame out publicly against the Family Assistance Plan, "we can kill it." Atthe conclusion of Reagan's statement, Senator Long praised it as "trulymagnificent" and the "most eloquent" of any testimony before thecommittee.

    Joe Coors' decision to commit his company to a prominent role in publicaffairs was reinforced when he read it confidential 5,000-wordmemorandum by Lewis F. Powell, a prominent Democratic attorney inRichmond, Virginia (later named to the Supreme Court by PresidentNixon). At the invitation of the U.S. Chamber of Commerce, Powell detailedWhat he called the "broad attack" on the free enterprise system,criticized the general "apathy and default" of American business, andurged business executives to take "effective action" against the threat.After making a number of recommendations (such as naming an executivevice president to coordinate corporate action), Powell ended hismemorandum bluntly: "Business and the enterprise system are in deeptrouble, and the hour is late."

    Coors recalls that the Powell memorandum "stirred" him up and convincedhim that American business was "ignoring" a crisis. He wondered whybusiness leaders and organizations weren't speaking out more forcefullyagainst President Nixon's "new economic policy" which included aninety-day freeze on all wages and prices and a Cost of Living Councilthat would work with labor and business to achieve continued wage andprice "stability." The Colorado conservative was also impressed by aspeech given by former Treasury Secretary Henry Fowler, who exhorted himand other business leaders to become more politically involved.

    But the political vehicle that Coors chose had organizational problemsfrom the start. Lucier was at heart an academician; Weyrich was apolitical activist; Fediay would take off on unexplained trips to Europe;and Roberts was knowledgeable but unpredictable. Coors did not want toremain the sole sponsor, but ARA was unable to attract other majorbackers. "They were dedicated," recalls Joseph Coors, "but not unified." Inthe fall of 1972, Wilson told Weyrich to find another vehicle—ARA wasn'tworking.

    A concerned Weyrich mentioned his predicament to fellow conservativeDan Joy, who mentioned a dormant tax-exempt organization that could beeasily taken over—the Robert M. Schuchman Memorial Foundation, named afterthe first president of Young Americans for Freedom who had died attwenty-seven of a brain embolism. Shortly after the Weyrich-Joyconversation, a reconstituted, Coors-funded Schuchman Foundation openedoffices in a small office building at Second Street and MassachusettsAvenue, N.E., half a block from the present Heritage headquarters.

    The new president was Paul Weyrich, and Weyrich, Joseph Coors, JackWilson, and Ed Feulner were elected to the board of directors. Richard M.Scaife, a generous backer of many conservative and anticommunist causes,soon joined Coors as a financial supporter of the Schuchman Foundation. Afew other conservative businessmen, like industrialist William Brady ofMilwaukee, also contributed to the new research organization. It seemedthat Schuchman might find a niche in the Washington community.

    But the board of directors became increasingly divided over theorganization's direction. Members of the old board preferred a moretraditional approach to public policy, relying on conferences and thepublication of papers. The new members, led by Weyrich and Feulner, wantedto affect the legislative process promptly and directly. Before long,recalls Joy, "divorce became inevitable."

    But first it was decided that Schuchman would be converted into apublic-interest law center (with Ed Feulner as president), while a new andseparate public-policy foundation with its own 501 (c) (3) status would becreated. The lawyers, led by Edward McCabe, who had worked in the 1964Goldwater presidential campaign, prepared the necessary papers for theIRS. But they needed a name for the new entity.

    Weyrich studied a list of possibilities. The James Madison Foundation?One already existed. The Commonwealth Foundation? Too vague. Heconsidered using the name of a Wisconsin congressman whom he had longadmired, but the family objected. Finally, one evening an impatient JosephCoors telephoned Weyrich and told him, "You will have a name by tomorrowmorning." The next morning, still uninspired, Weyrich and his wife Joycewent for their usual walk near their home in Annandale, Virginia. As theystrolled along, Weyrich noted a new sign on a vacant lot: "Coming Soon:Heritage Town Houses." He turned to his wife and said triumphantly,"That's it!" Lawyers confirmed there was no Heritage Foundation on thebooks; Weyrich informed Coors, who enthusiastically endorsed the name.

    The Heritage Foundation was formally incorporated in the District ofColumbia on February 16, 1973. The three original trustees were Marvin H.(Mickey) Edwards, later a Republican member of Congress from Oklahoma;businessman John Perrino of Rhode Island; and Fritz Rench. On March 23,the board of trustees was increased to six with the additionof Ed Feulner, Jack Wilson, and Forrest Rettgers, who would become executivevice president of the National Association of Manufacturers. On that samedate, Rettgers was elected chairman of the board and Weyrich presidentof Heritage.

On Their Own

The long-developing divorce between Schuchman and Heritage became finalfollowing a heated board meeting at Thanksgiving time 1973. After beingtold repeatedly what he could and could not do with the money he hadcontributed to the foundation, Coors, usually the most even-tempered ofmen, stood up suddenly, remarked that this was not the way the real worldoperated, and announced that he, Weyrich, Wilson, and Feulner wereresigning from the Schuchman board. Back in the foundation offices behindthe gas station, the four conservatives looked questioningly at eachother.

    "What are we going to do now?" someone asked.

    Unsure how to answer the question, Weyrich began sorting through themail on his desk. Abruptly, he stopped. He could not believe his eyes:There was a letter from the IRS. Eagerly, he opened it and learned that,effective November 27, 1973, tax-deductible status had been granted to TheHeritage Foundation.

    "Gentlemen," said Weyrich, "I have the answer." Waving the IRS letter,he said, "Tomorrow, we begin operating as The Heritage Foundation."

    They stayed up much of the night, separating files, papers, andfinancial accounts, leaving Schuchman a reasonable bank balance. The nextmorning, Weyrich told the staff of ten that they were now working for TheHeritage Foundation. Heritage stayed in the Wheat Growers Building, whileSchuchman moved its public-interest law activities (without Feulner, whoreturned to Capitol Hill as administrative assistant to Congressman Crane)to offices near the Supreme Court. Jeffrey B. Gayner, who would work forHeritage in a variety of top research positions for nearly twenty years,recalls a "seamless change" from Schuchman to Heritage.

    In late January, the Schuchman Foundation sponsored a highly successfulone-day program on "the energy crisis," featuring a luncheon "dialogue"between Senator James L. Buckley (R-N.Y.) and Senator William Proxmire(D-Wis.) that drew several hundred people. During an afternoon panel,Milton Friedman argued that the market, not the government, shoulddetermine oil prices. "What we need," Friedman said, "is not a specific,detailed [government] blueprint for the future but an adaptable adjustmentmachine"—i.e., the "price system." Plans for another conference, withFriedman again a featured speaker, were drawn up, but funds ran short.Within eighteen months, the Robert M. Schuchman Memorial Foundationquietly faded from view.

    For its part, The Heritage Foundation would undergo several morechanges over the next three years before finally finding the rightcombination of leadership and issues that would make it during the Reaganyears "a major player in national policy."

The Watergate Factor

Like every other institution in the nation's capital, Heritage wasaffected by the Watergate scandal. Even before President Nixon resigned inAugust 1974 rather than face certain impeachment, Weyrich had concludedthat the fall elections could well be a disaster for the Republican Party.Guided as usual by his activist impulses, Weyrich resigned as president ofHeritage in March and started the Committee for the Survival of a FreeCongress. Jerry P. James, a legislative veteran of many Hill battles, waspicked to succeed Weyrich. Lawrence D. Pratt became treasurer, and Mrs.Charles E. Thomann, secretary. Jeff Gayner, who was pursuing a doctoralprogram at the University of North Carolina at Chapel Hill, became foreignpolicy studies director.

    But over the ensuing months it became clear that James, an excellentspeechwriter and legislative analyst, was not suited for the position ofchief executive of a Washington public-policy organization. Besides, Jameswanted to return to his native Oklahoma. Before he left, however, he andothers at the foundation produced a prospectus that offers revealinginsights into the early Heritage. Pointing to the "disproportionateinfluence" of the Ford Foundation and "the Brookings Institute" [sic] onpublic policy, the foundation promised to provide in-depth research basedon "traditional American economic and social values" and the Constitution.Its audience would be "the public at large" and members of Congress "whostruggle to cope with the initiatives of the liberal-socialist `thinktanks.'"

    The prospectus mentioned several areas that would receive "particular[research] emphasis" in 1974, including international trade, energy,federal spending, public campaign financing, tax reform, environmentalissues, legal services, public education, and Social Security—an ambitiouslist considering that Heritage had only a handful of analysts. Thefoundation also committed to a "Washington Semester Plan program" thatwould educate "mature college level students" about the "practical, insideoperation of Congress" and interest them "in legislative government as acareer." Finally, it planned to sponsor lectures and debates, particularlyat colleges and universities, and to disseminate information about itsactivities to the "press and news media." The "annual projected budget"was to be $525,000.

    Heritage has come a long way since this first, amateurish prospectus.Today, the foundation is careful to get the names of its competitors andcolleagues right (e.g., the Brookings Institution). It does not indulge inrhetorical overkill by describing liberal think tanks as "socialist." Andit does not bite off more than it can chew. Even the present Heritage,with a professional staff of some seventy analysts and fellows, is hardpressed to deal adequately with every major issue before Congress. It wasclearly an impossible task in 1974 for a brand new think tank with onlythree or four professionals.

The Reagan Connection

A search committee for a new Heritage Foundation president was formed, andFrank J. Walton, former secretary of business and transportation forGovernor Reagan in California, was hired. He took up his duties aspresident on June 9, 1975.

    In his late fifties, Walton had been a successful Californiabusinessman before joining the Reagan administration in Sacramento. He wastall, charming, and almost as good a storyteller as Reagan. And there wasno question about his conservative credentials: his California licenseplate had read: "CUT TAXES." Reagan was by now indubitably the future ofthe Republican Party, and to have someone from his gubernatorial cabinetas head of Heritage gave the new foundation instant credibility. Walton,moreover, delighted in calling on U.S. senators and congressmen andtelling them about Heritage. He once remarked to Russell Long, chairmanof the Senate Finance Committee, "Think of us as an extension of yourcommittee staff." Long, who commanded a staff twice the size ofHeritage, must have been amused. But Walton could get in to see Longwhen a Weyrich or Feulner could not—at least not yet.

    And Walton was not shy about asking foundations and corporateexecutives for money. During his tenure as president (Walton informed theboard that he would stay for two years and no longer), Heritage's incomemore than doubled, from $413,497 at the end of 1974 to just over $1million in 1976. Also, in one of the most important decisions in thefoundation's history, Walton introduced direct-mail fund-raising toHeritage. Written by Mary Elizabeth Lewis of Steve Winchell & Associates,the first mailing focused on the unionization of the military and featureda photo of a very small Heritage Foundation and a very large BrookingsInstitution—David vs. Goliath. The mailing was succeessful, producingseveral thousand donors, the first in an ever-increasing flow ofindividual supporters that would yield over 200,000 donors sometwenty-five years later. Winchell & Associates has remained thefoundation's direct mail fund-raising agency, a relationship that probablybelongs in the Guiness World Book of Records.

An Historic Challenge

Meanwhile, Walton's former boss announced in November 1975 that, althougha Republican already sat in the White House, he would be a candidate forhis party's 1976 presidential nomination. Ronald Reagan declared that "theAmerican dream" had been mislaid and promised to reduce "the powercentralized in Washington." A Gallup Poll subsequently showed thatReagan had surged ahead of President Ford among Republicans andindependents. In an NBC survey, the former California governor ledDemocrat Hubert Humphrey by 48-44 percent while Ford trailed, 44-46percent.

    The New Hampshire primary was, as usual, the first in the nation andaccordingly a key contest although only twenty delegates were at stake. Aheavily favored Reagan received 49.4 percent of the popular vote and lostNew Hampshire by a razor-thin margin of 1,587 votes. Ford won succeedingprimaries in Florida, Illinois (Reagan's birthplace), and Wisconsin, thusestablishing himself as the clear front-runner.

    But suddenly an aroused Reagan began hitting the president hard on thePanama Canal treaties, detente, and deficit spending. With the guidanceof Senator Jesse Helms and his campaign aide Tom Ellis, Reagangave a brilliant TV performance on the eve of the March North Carolinaprimary. He defeated Ford in the Tarheel State and began a comeback thatalmost made political history.

    But Republicans are loyalist to a fault. They knew and liked JerryFord, they were comfortable with him, and they felt Ford had earned thenomination through his years of service to the party. Thus, despite Reaganwins in delegate-rich Texas and California, the advantage began shiftinginexorably to President Ford. At the national convention in Kansas City,Reagan lost the nomination to Ford by a mere 1,187 to 1,070 delegates. Hewould have been the first candidate in ninety-two years to take thenomination from an incumbent president seeking reelection.

    After his nomination, a magnanimous Ford asked Reagan to say a fewwords. His remarks were the rhetorical highlight of the 1976 conventionand a foretaste of 1980 and beyond. Without notes or TelePrompTer, Reaganspoke of the problems confronting the nation—"the erosion of freedom,""the invasion of private rights," "the controls and restrictions" on theeconomy. And he described the "missiles of destruction" that the greatpowers had "aimed at each other."

    What will Americans of the Tricentennial, Reagan wondered, say aboutthe Americans of the Bicentennial? "Will they look back with appreciationand say, 'Thank God for those people in 1976 who headed off that loss offreedom; who kept us now a hundred years later free; who kept our worldfrom nuclear destruction'?... This is our challenge."

    Four years later, Ronald Reagan used these same themes—an unfetteredeconomy, individual freedom, and peace through strength—to win theRepublican nomination and the presidency, and to launch what came to becalled the Reagan Revolution.

Moving Up

While Reagan was trying to move into 1600 Pennsylvania Avenue, TheHeritage Foundation—thanks to a $300,000 gift from Joseph Coors—was movingto 513 C Street, N.E., a renovated movie theater facing Stanton Park, sixblocks from the Capitol. But things were still cramped: Milton R. Copulosrecalls that one analyst worked out of a one-time broom closet.

    There was much to analyze. According to an OMB study cited by Heritage,the total cost of federal regulations to the American economy in 1976 wasas much as $130 billion. The Kremlin, warned foreign affairs analyst MilesM. Costick, viewed U.S.-Soviet trade not merely as a commercialtransaction, but also as a political act. George Washington Universityprofessor Charles Moser pointed out that the federal budget had grown solarge that the percentage of national income taken by all levels ofgovernment had reached an alarming 40 percent. And then there was theAmerican health system.

    That same year, Heritage published a sixty-two-page monograph entitled,The British National Health Service in Theory and Practice: A CriticalAnalysis of Socialized Medicine. The coauthors, who taught at St.Andrew's University in Scotland, were Eamonn F. Butler and Stuart M.Butler. The latter would become vice president of domestic and economicpolicy studies at The Heritage Foundation. The Butlers found "startlingparallels" between British socialized medicine, which had produced"unsatisfied demands and shortages" in every health sector in Britain atan ever-increasing cost, and America's Medicare and Medicaid programs.They stated that "virtually all [cost] restraint has been stripped away"from the U.S. programs since Congress elected to reimburse users of thesystem on the basis of "reasonable cost."

    The inevitable result, the Butlers said, was "inflationary costincreases, declining efficiency of medical services in terms of theircosts, and overequipping of many hospitals." The only workable solutionwas "a system of private medical insurance" with tax concessions for thosewho could provide for themselves and "direct assistance to those whocannot." Led by Stuart Butler, Heritage would make much the samearguments twenty years later during the fierce public debate over theClinton health care plan.

    Along with a steady stream of monographs, Heritage also emphasized its"quick response capability." Elected representatives, Walton asserted inan early foundation newsletter, are quickly and accurately informedon any topic of national consequence." The means most frequently used byHeritage were the Backgrounder and the Issue Bulletin. The firstBackgrounders usually ran four pages, and were printed on beige paper. Thevery earliest ones did not carry the disclaimer that is now as much a partof Heritage literature as its Liberty Bell symbol: "Nothing written hereis to be construed as an attempt to aid or hinder the passage of any billbefore Congress." The research was dependable, the language adequate. Butthe studies fell far short of the fact-filled, fast-moving style that cameto characterize Heritage's publications in the 1980s.

    Conscious of its responsibility to further the conservative movement,Heritage published a monthly newsletter with items about organizationsranging from the Pacific Legal Foundation to the American LegislativeExchange Council, the Intercollegiate Studies Institute, the NationalFederation of Independent Business, Young America's Foundation, and theHoover Institution at Stanford University.

    Another Heritage project, the Communications Network, helped placespeakers like Congressman Phil Crane, Senator Jake Garn of Utah, Dr. PhilGramm (then a professor at Texas A&M University), Congressman Jack Kemp ofNew York, and Dr. Henry Manne (director of the University of Miami Law &Economics Center), who supported "the free enterprise system." Once asponsoring group had requested a speaker, the foundation arranged all thedetails, including transportation and media coverage free of charge. InApril 1977 alone, Heritage booked thirty "free enterprise" speeches tocounteract the liberal themes of the Carter years.

    That same year, the foundation published the transcript of a debateheld at St. Olaf College in Minnesota between syndicated columnist andauthor Jeffrey St. John and Jeremy Rifkin, a veteran radical and head of thePeople's Bicentennial Commission. Rifkin called for a second Americanrevolution against "Big Business," which, he said, was running and ruiningthe country. St. John responded that the People's Bicentennial Commissionwanted not a second American revolution, but a replay of the blood-stainedFrench Revolution of 1789, which "centralized power in the hands of anelite few who claimed to be acting in the name of the people." Anintroduction explained that Heritage was pledged "to the preservation andfurthering of traditional American values" and hoped that publication ofthe debate would contribute "to that goal."

    However, the phrase "traditional American values" was notformally added to Heritage's mission statement until 1993. As a matter ofpolicy, the foundation decided in the late 1970s to concentrate oneconomic and foreign policy/national security questions, leaving socialissues like abortion, gay rights, and prayer in the schools in the main toother public-policy organizations. But by the early 1990s, the decline ofAmerican culture had become so pronounced that Heritage felt compelled tostart a cultural policy studies program. William J. Bennett, formersecretary of education and chairman of the National Endowment for theHumanities, served as its major spokesman.

At the Crossroads

As the fireworks of America's bicentennial year faded, citizens speculatedabout their new Democratic president, looking for clues in the 1976Democratic platform, which, according to the New York Times, "wasfashioned in the image of Jimmy Carter." For conservatives, the platformmade ominous reading. It said, for example, that the United States "mustset annual targets for employment, production and price stability"—a clearendorsement of national economic planning. The platform also endorsednational health insurance, a guaranteed annual income, "mandatory" schoolbusing, gun control, repeal of Section 14(b) of the Taft-Hartley Law(allowing state right-to-work laws), a reduction of defense spending, anda new Panama Canal treaty. The estimated cost of the Carter platform was$750 billion—suggesting why workers from the 1972 McGovern campaignlabored so hard for Carter's victory in November 1976.

    The trustees and staff of The Heritage Foundation, meanwhile, completeda third year with mixed feelings about their performance and their future.The foundation was producing some solid work and was being quoted, atleast in the conservative media. But Heritage was seen by most of theWashington establishment as part of the emerging New Right and wasrelegated to the fringe of politics and policy. The Washington Post, forexample, described Heritage as "controlled" by Joseph Coors, who, accordingto the Post, believed that the United States had to be rescued fromliberalism lest it become "another version of godless communism."

    The media again stressed the Heritage-New Right connection whenthe foundation's legal counsel, James McKenna, paid frequent visitsto Kanawha County, West Virginia, to help parents who objected to theliberal textbooks chosen for their schools. The struggle of the KanawhaCounty parents against West Virginia's educational establishment (and theNational Education Association) was prominently featured in ConservativeDigest and other New Right publications. Further evidence of Heritage'stilt to the New Right was provided by its publication, in late 1976, of aCritical Issues study entitled "Secular Humanism and the Schools: The IssueWhose Time Has Come," by Dr. Onalee McGraw. The thirty-page pamphlet wasdescribed as "a case study of the growth of humanistic teaching in thepublic schools and the efforts of local parent groups to stymie thehumanistic trend." It quickly went into a second printing and becameone of Heritage's most popular early studies.

    But some trustees wondered whether this was the right direction for thefoundation. Wasn't Heritage's primary target the Congress? If so, thenpolicy analyst Milt Copulos's testimony before the EnvironmentalProtection Agency about the potential serious burdens to small andmedium-sized businesses of the Toxic Substances Control Act was moreimportant than the McGraw pamphlet about secular humanism—an issue overwhich Congress had little effective control.

    At this critical moment in Heritage's history, Frank Walton announcedat a trustees' meeting in February 1977 that his two years as presidentwould soon be up, and he wanted to go home to California as quickly aspossible. Suddenly, trustees were forced to ask themselves: Who shouldsucceed Walton? Indeed, there was even some question as to who would wantto succeed him.

    In those early days, Heritage did not resemble the flagship of a mightyconservative fleet. It was only a small, overcrowded oil tanker. Thefoundation's staff of twenty-five worked cheek by jowl out of a smalltwo-story building. They had only one Xerox machine, several electrictypewriters, and no computers, but they did have a compulsory prayermeeting every Monday morning. Distribution of Heritage publications wasunorganized. Richard Odermatt, longtime director of research production,recalls that once or twice a week he would make a circuit of perhapstwenty or thirty congressional offices, dropping off copies of the latestHeritage study, fresh from the foundation's copying machine.

    What was needed was someone who would take command of Heritage andenable the foundation to realize its promise and fulfill the intentions ofits founders.

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Table of Contents

Acknowledgments ix
Foreword by William E. Simon xi
Introduction by William F. Buckley Jr xvii
Chapter 1 A Modest Beginning 1
Chapter 2 A New President 21
Chapter 3 The Big Gamble 41
Chapter 4 Coming of Age 69
Chapter 5 The Perfect vs. the Good 103
Chapter 6 New Democrats 131
Chapter 7 ... And Newt Republicans 157
Chapter 8 The Man Who Makes It Happen 185
Chapter 9 The Next Twenty-five Years 211
Appendix Board of Trustees 227
Notes 233
Selected Subject Bibliography 265
Index 291
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