Cantor-backed groups face uncertain future in wake of stunning defeat

Before his stunning defeat, Majority Leader Eric Cantor didn’t just believe he would be the next speaker of the House. He also believed he would be a thought leader in the Republican Party. In 2011, Cantor dispatched a top aide to build a network of high-profile outside groups to cement his place in a GOP shaped in his own image and set the agenda for the party as a whole.

Now, rejected by Virginia Republican primary voters, Cantor is reeling personally from the loss, of both his seat and his leadership ambition. But the groups he helped build to promote his ideology are in flux, too. Donors and establishment Republicans who once poured millions of dollars into them must decide whether it’s still a good investment to fund organizations that advocate for policies and candidates reflective of Cantor’s vision for the party’s future.

YG Network sources insist that the infrastructure they’ve built is still viable, attractive to donors and important to the Republican discourse, especially on fiscal issues. But the choice facing those investors is unprecedented, as Cantor is the first leader to abruptly lose re-election in the nascent era of massive outside spending.

The YG Network, a policy-oriented 501(c)(4), and YG Action Fund, a super PAC, were started by former Cantor aides in 2011 as a follow-up to his 2010 “Young Guns” book, co-written by Kevin McCarthy — the House whip favored to succeed Cantor as majority leader — and former vice presidential nominee Paul Ryan.

The book, lauded in conservative circles and used to energize the base, laid out a framework for what the young guns saw as a new brand of “reform conservatism” — and a new kind of GOP candidate needed to win back the House majority.

The current reality, however, is that the YG super PAC is withering, with only four figures in the bank after the first quarter of 2014, while the policy wing, also dependent on massive donations, has become the organizational focus of the YG operation. As such, it is probably the best hope for the Cantor ideological legacy to survive.

During the 2012 election cycle, the YG Action Fund raised $5.9 million — with $5 million of that coming from GOP megadonor Sheldon Adelson and his wife, Miriam. It spent $4.7 million on races and nearly $1.2 million in operating expenditures, according to the Federal Election Commission. But, according to the FEC, the YG Action Fund had only $6,241 on hand at the end of the first quarter of 2014.

A spokesman for the Adelsons said they had no comment on the future of the YG groups and whether they’d continue funding them.

The finances for the YG Network are a bit trickier to decipher, as the group has to make only one disclosure filing per year. Last cycle it raised $12.7 million — more than $7 million of which came from five donors — and spent just under $10 million, according to the Center for Responsive Politics.

Given this level of spending, the group needs to fundraise at a serious pace if it is to maintain its status as a major player.

YG Network staffers say they will keep pressing forward even without Cantor in leadership or in the House. “YG Network has become a real driver on the policy stage. We have an agenda within the conservative movement that's designed to provide solutions for the middle class,” said senior strategist, John Murray, who served as Cantor’s deputy chief of staff until helping found the YG groups in 2011.

“That's not going to change. We have money in bank. We have people who believe in that mission. The need to continue this conversation is still there,” Murray said.

Next week, the group is co-hosting an economic address from 43-year-old Republican Sen. Marco Rubio of Florida, a potential presidential hopeful in 2016. Last month, the YG Network unveiled its first major economic blueprint, “Room to Grow: Conservative Reforms for a Limited Government and a Thriving Middle Class,” which it hopes to use to anchor its policies, politics and fundraising for the midterms.

So far for the 2014 election, the YG Network has reserved $2.7 million in ad time in seven districts, and sources within the group are confident they will have the funds to fulfill those obligations.

YG Network communications director Chris Bond said the group is “continuing to raise money and will make additional investments in key races where we have opportunities to elect candidates who fit the Young Guns brand.”

Yet there is some concern outside the group, where many Republican operatives are left to speculate on what’s happening inside of it, that there could be a fallout effect if the funds aren’t there in the fall to preserve these ad buys in targeted districts. In the current political climate, candidates, official campaign committees and outside groups snatch up millions of dollars worth of autumn ad time in the spring and summer, which means in competitive districts, TV stations’ slates can be booked full months in advance. If the ad buys fall through, it could create a mad grab for that time — with no guarantee a Republican or conservative group might snag it.

Perhaps the greatest reason for YG Network backers to be optimistic about their policy shop in a post-Cantor world comes from the relative void in GOP think tank content. Since being taken over by conservative firebrand and former Sen. Jim DeMint, the Heritage Foundation, once the leading Republican think tank, has become politicized, leaving behind an ideological and scholarly vacuum in the Republican universe.

The American Enterprise Institute has emerged as one of the top policy resources for establishment Republicans, and many of its scholars wrote chapters for YG’s “Room To Grow.” AEI also hosted the rollout event for the framework, which included panels or speeches from Cantor and Republican Sens. Mitch McConnell of Kentucky, Mike Lee of Utah and Tim Scott of South Carolina. The think tank has no centralized or official partnership with the YG Network, according to an AEI official.

Even with the involvement of other politicians, however, the core of the group’s mission still seems to be very much rooted in Cantor’s view of the Republican Party — a corporatist, small government view of reforming the tax code and entitlement programs, lowering the minimum wage, offering tax credits to combat long-term unemployment and increasing domestic energy production. And with no adjustments being made in the wake of Cantor's loss, it seems YG is hedging its bets that in the long term, where it situates itself policywise and politically will be where the party winds up.

It remains to be seen whether that bet will pay off.

“To drive an agenda in context of changes of Washington, we saw that we could play a real role in both developing ideas and pressing those ideas,” Murray said. “I am a firm believer that good policy equates to good politics and the other way around.”

The challenge will be convincing high-dollar GOP donors that the group’s scope and standing in Washington extend beyond its connection to the man once on the fast track to the speakership.