Economic Policy Institute
The Economic Policy Institute (EcPI) calls itself a “nonprofit, nonpartisan” think tank. But behind its façade of political balance lays an agenda-driven organization. EcPI has roots in radical leftist politics, and it receives a large portion of its funding from organized labor. EcPI‘s donors have on at least one occasion been allowed to review its research prior to publication.
The Economic Policy Institute was founded in 1986 by Jeff Faux, who was previously the co-director of the National Center for Economic Alternatives (NCEA). As its name suggests, the NCEA specialized in offering “alternatives”—alternatives characterized as “radical” in The New York Times—to mainstream U.S. domestic policy.
NCEA‘s co-director was Gar Alperovitz, now a University of Maryland professor and author of America Beyond Capitalism. Prior to working at the NCEA, Alperovitz co-authored the essay collection Strategy and Program: Two Essays Toward a New American Socialism, where he advocated using socialist ideas to make the United States a “fairer” nation.
Together, Faux and Alperovitz advocated reindustrialization, a scheme that required a national committee to review and guide the re-development of selected major industries in the United States. One professor at Columbia University, writing in The New York Times, called their ideas “a poorly disguised version of national planning.”
At NCEA, Faux and Alperovitz promoted public ownership of energy, defense, and transportation corporations, and economic planning handled through local councils. Over time, they envisioned the replacement of large U.S. corporations with new institutions directly accountable to the public.
Lawrence Mishel, EcPI‘s president, acknowledged in The Huffington Post his prominent status among political liberals. “When we get attacked by the Wall Street Journal editorial page, I tell my people, ‘Be proud.’ I never got listed by Glenn Beck. I felt left out because I feel like I‘m an important person on the left.”
In 2004, EcPI created a 501(c) (4) political advocacy group called the “EPI Policy Center.” It was most active in 2008, releasing negative reports about “The Bush Legacy” and criticizing then-Presidential candidate John McCain‘s health care proposals. The Center was partially funded by a liberal “Section 527” group called the Coalition to Defend the American Dream.
EcPI coordinates the Economic Analysis and Research Network (EARN), a nationwide coalition of left-leaning policy organizations. Its members include The Drum Major Institute, the National Employment Law Project, Progressive Majority, the Ballot Initiative Strategy Center, Good Jobs First, and People for the American Way. EARN members also include 57 different state-level left-leaning policy organizations.
EcPI‘s board of directors includes a number of left-wing partisans, including the former president of Bennett College for Women Julianne Malveaux. In 1994, Malveaux famously said of Supreme Court Justice Clarence Thomas: "You know, I hope his wife feeds him lots of eggs and butter and he dies early like many black men do, of heart disease.”
The Tobacco Institute—the trade association that represented the interests of the tobacco companies—budgeted for contributions of at least $430,000 to EcPI between 1988 and 1998. During that time, EcPI released research that (among other topics) supported The Tobacco Institute‘s position on the regressive nature of cigarette excise taxes.
Documents from the 1998 Tobacco Master Settlement Agreement reveal that the Tobacco Institute was at least once provided copies of EcPI‘s research to review before it was published.
In 1990, EcPI released a study called “Investing the Peace Dividend.” A letter from May 17, 1990 demonstrates that the report was reviewed before its release by a consultant for The Tobacco Institute, James Savarese:
“Jim Savarese has reviewed the final version of the paper and his comments have been addressed and incorporated into the paper (please see pages 5-7).”
Page six of the final product includes language criticizing “regressive consumption taxes”.
Savarese‘s comments were also incorporated elsewhere. For instance, writing Savarese about the 1990 edition of EcPI‘s well-known report, The State of Working America, communications director Roger Hickey had this to say:
“As you can see in Chapter 2, this time around Larry [Mishel] produced an entire chapter on tax inequities and the regressive burden of excise taxes—just as he promised to do.” (Emphasis Added)
Savarese and The Tobacco Institute were also closely involved in a paper EcPI released in 1993 titled “The Impact of Health Care Financing on Family Budgets.” It was authored by Edith Rasell, Kainan Tan, and Jared Bernstein. (Bernstein most recently served as Vice President Biden‘s chief economist.)
Having campaigned on broad health care reform in 1992, President Bill Clinton came into office with plans to remake the U.S. health care system. The Tobacco Institute had an interest in ensuring such changes weren‘t financed with an excise tax.
In September 1992, Savarese met with EcPI staff to discuss a “proposed health care financing study.” These meetings continued: Documents show that Savarese met with EcPI staff in December 1992, January 1993, February 1993, March 1993, and April 1993—each time to discuss the “status of health care financing study” or a “timetable for release.”
The final study was highly critical of the regressive nature of health care financing in the US, and supported efforts to make it less so.
EcPI and Labor Unions
After leaving the NCEA, Faux teamed up with eight labor unions and prominent left-leaning economists to create the Economic Policy Institute. According to The Washington Post, Faux‘s stated goal was to “create an intellectual climate that gives politicians more courage to advocate greater government management of the economy.” This goal was similar to that of the older NCEA, but within EcPI it could be accomplished with the greater credibility that prominent economists (including future Clinton Labor Secretary Robert Reich) would lend to it.
The Post reported that eight labor unions made a five-year funding commitment to EcPI in its first year:
- United Auto Workers
- United Mine Workers
- Communications Workers
- Service Employees
- Food and Commercial Workers
The unions‘ first year funding commitment totaled $460,000, with another $340,000 coming from private foundations.
EcPI‘s budget has grown substantially since its 1986 birth, but labor unions remain major donors. Government filings show that in fiscal year 2008, labor groups contributed over $1.6 million; in fiscal year 2009, labor groups contributed over $2.5 million.
Between 2002 and 2005, half of EcPI‘s top donors were labor groups, adding a combined total of $3.89 million—about one-fifth of EcPI‘s total contributions during this period. The organization also received money from left-leaning foundations including George Soros‘ Open Society Institute. The full list of top donors, and the amount donated between 2002 and 2005, is shown below.
- Ford Foundation: $3,871,000
- American Federation of Teachers: $1,150,924
- Open Society Institute: $1,011,400
- Rockefeller Foundation: $850,000
- Mott Foundation: $730,000
- Wellspring: $700,000
- Joyce Foundation: $650,000
- AFL-CIO: $595,138
- AFSCME: $562,997
- SEIU: $410,923
- UAW: $400,000
- United Steelworkers of American: $400,000
- National Education Association: $378,474
EcPI‘s Board of Directors is a “who‘s who” of powerful union leaders, including Richard Trumka (AFL CIO), R. Thomas Buffenbarger (IAM), Bob King (UAW), Randi Weingarten (AFT), Gerald McEntee (AFSCME), and Leo Gerard (Steelworkers).
Given its donor base and board of directors, it‘s not surprising that EcPI‘s proposals closely match the union line:
- Since President George H. W. Bush first considered the North American Free Trade Agreement (NAFTA), labor unions have virulently opposed its passage and implementation. Faux and others at EcPI have been equally critical of NAFTA through studies and newspaper op-eds.
- Labor unions pushed for passage of the Employee Free Choice Act (EFCA), which would effectively eliminate employees‘ right to a secret ballot during union organizing. EcPI also strongly supported EFCA, releasing statements and studies in favor of its passage, as well as including it as a part of their “Plan to Revive the American Economy.”
- Teacher unions strongly oppose the idea of merit-based pay for educators. EcPI has also taken up the cause, releasing reports with titles like “The Perils of Performance-Based Pay” and “Making the Case against Performance Pay.”
- In the debate over health care reform, labor unions strongly opposed the excise taxes on high-cost health care plans. EcPI‘s report, “The House Health Care Bill: Right On the Money,” claimed that “taxing high incomes is better than taxing high premiums.”