What leaders say about Heritage’s plan for:

Am e r i c a n Dr e a m

“Getting our country’s fiscal house in order is no easy task. Thankfully, our friends at The Heritage Foundation have done the hard work of thinking through and creating public policies that get government under control and save the American dream for this generation and the next.” — Senator Jim DeMint (R-S.C.)

“The analysis of our fiscal problems is compelling, and the proposed solution is bold and imaginative.” — Ambassador John Bolton

“The Heritage Foundation’s plan to save the American dream would create economic certainty for businesses by putting our nation on a more stable economic course and giving businesses the freedom to expand.” — Andrew F. Puzder, CEO of CKE Restaurants Inc. (Hardee’s and Carl’s Jr.)

“… a plan that truly reforms… This plan is the cure for our ‘disease.’” Am e r i c a n Dr e a m — Cal Thomas, Syndicated Columnist

“Comprehensive tax reform is an essential element of restoring fiscal sanity and spurring economic growth in the country. The Heritage Foundation’s proposal moves the country’s tax code in the right direction toward a more low-rate, flat tax.” — Arthur B. Laffer, Ph.D., the Father of Supply-Side Economics

“America does not have to be a country in decline. Do we have choices to make? Yes. And I encourage anyone who is serious about making the right choices to read The Heritage Foundation’s plan to fix the debt, cut spending, and restore prosperity.” — Steve Forbes, Editor-in-Chief, Forbes magazine

214 Massachusetts Avenue N.E. n Washington, D.C. 20002 n (202) 546-4400 n heritage.org The heritage foundation 2011 Annual Report Building an America where Freedom, Opportunity, Prosperity, and Civil Society Flourish

The heritage foundation 2011 Annual Report Am e r i c a n Dr e a m

Message from the Chairman and the President Saving the American Dream Our Mission America can still be the nation it was meant to be, a land where To formulate and promote conservative public policies based on the freedom, opportunity, prosperity and civil society flourish. principles of free enterprise, limited government, individual freedom, traditional American values and a strong national defense.

Board of Trustees Honorary Chairman and Thomas A. Saunders III, Chairman Trustee Emeritus David R. Brown, M.D. Richard M. Scaife, Vice Chairman J. Frederic Rench, Secretary Honorary Trustees Kathryn Davis Meg Allen The Hon. Frank Shakespeare Douglas F. Allison Patron of The Heritage Foundation Larry P. Arnn, Ph.D.

The Right Honourable The Baroness Thatcher, Photo iStock Photo: The Hon. Belden Bell LG, PC, OM, FRS merica 2011… Saving the American Dream—a plan to fix the debt, cut Midge Decter Senior Management Washington kept on spending money at a spending and restore prosperity. Edwin J. Feulner, Ph.D. Edwin J. Feulner, Ph.D., President A breakneck pace, and the national debt ballooned This plan eliminates today’s federal tax code, replacing accordingly. Federal regulators saddled a still struggling it with a new, flat tax. It sharply downsizes government, Steve Forbes Phillip N. Truluck, Executive Vice President economy with tens of billions of dollars in new compliance leaves patients—rather than bureaucrats—in control of Robert J. Herbold David Addington, Vice President costs, sometimes exercising powers not authorized by health care decisions and fully funds our national defense. Congress or the Constitution. It balances the nation’s budget within a decade—and keeps Todd W. Herrick Stuart M. Butler, Ph.D., Distinguished Fellow Facing the prospect of pending tax hikes, higher energy it balanced. And it starts paying down the national debt. Jerry Hume Becky Norton Dunlop, Vice President costs and expensive health mandates, employers shelved John Fogarty, Vice President expansion plans and banked trillions in cash that might Kay Coles James have fueled an economic recovery. Millions of unemployed

Michael G. Franc, Vice President Geer Chas Photo: The Hon. J. William Middendorf II were left frustrated and increasingly desperate. Michael M. Gonzalez, Vice President It was an alarming year. Abby Moffat As always, Heritage was there—wading into every Kim R. Holmes, Ph.D., Vice President Nersi Nazari, Ph.D. significant policy debate, from repealing Obamacare to Edwin Meese III, Reagan Distinguished Fellow providing for a responsible national defense. But these Robert Pennington Ted E. Schelenski, Vice President challenging times demanded even more. And so we William E. Simon, Jr. framed a higher-level debate—one that will determine the Matthew Spalding, Ph.D., Vice President path America will pursue in the future and the relationship Brian Tracy Michael Spiller, Vice President between our government and “We, the people.” Heritage President Phillip N. Truluck John Von Kannon, Vice President and Senior Counselor Edwin Feulner Saving the American Dream Barb Van Andel-Gaby welcomes the DAR Genevieve Wood, Vice President Heritage mapped out a clear vision for America’s future: Constitution Hall Marion G. Wells Robert E. Russell, Jr., Counselor We want a nation where hard work is rewarded, not audience to the Nov. punished; where our children and grandchildren are free 22 GOP presidential of crushing national debt; where a social safety net protects candidates debate on national security, co- As a nonprofit 501(c)3 organization, we rely on the financial contributions of the general public: individuals, foundations and the least among us. corporations. We accept no government funds and perform no contract work. We welcome your support. sponsored with CNN In 2011 we developed a policy package that can make and the American The Heritage Foundation n 214 Massachusetts Avenue N.E. n Washington, D.C. 20002 n (202) 546-4400 n heritage.org our vision a reality. We call our comprehensive proposal Enterprise Institute.

2011 ANNUAL REPORT the heritage foundation 1 Am e r i c a n Dr e a m Am e r i c a n Dr e a m “Presidents will come and go, but there will always be

a Heritage Foundation.” —Dick Cheney

Amid friends and family, Heritage Vice Chairman and longtime trustee Richard M. Scaife receives the Clare Boothe Luce Award—Heritage’s highest honor—from President Edwin Feulner (right), May 19 Photo: David Bohrer David Photo:

in Pittsburgh. Photography Merriman Justin Photo: Inc. Photography, McMinn Michelle Photo: Heritage Chairman Thomas Saunders (left) and President Edwin Feulner Former Vice President Dick Cheney, wearing his Clare Boothe Though essentially an economic reform plan, Saving producers. Along the way, we were even awarded one of (right) congratulate Roger Ailes, Chairman of Fox News, at the Annual Luce Award medallion, acknowledges the applause of more than the American Dream serves a high moral purpose. Absent John Stossel’s “Emmys,” when his television audience Leadership Conference and Board Meeting in Palm Beach, Fla. Ailes 1,000 Heritage donors at the Oct. 13 President’s Club banquet in reform, future generations will be impoverished by voted Saving the American Dream the best plan for received the Clare Boothe Luce Award at that gathering April 9 . Washington. crushing public debt and punitive tax rates. We who have restoring fiscal sanity. lived the American Dream must assure it will be preserved On Capitol Hill, our sister organization—Heritage try began reframing the national debate over spending, Preparing the Battlefield for those who follow us. Action for America—explained the details of reform and debt, taxes and health care. By year’s end, entitlement 2012 will be “a time for choosing”—politically as well as advised staffers drafting language that will introduce reform was looking less and less like a deadly “third in policy debates. As the campaign season got underway Heritage in Action elements of the package—and even the entire plan—as rail” of politics. As Congress prepared to break for in 2011, Heritage elevated the public discussion—and The months spent in formulating the plan were only legislation. Some lawmakers couldn’t wait. Rep. Christmas recess, Rep. Paul Ryan (R-Wis.) and Sen. Ron the media coverage—above the usual “horse race” the beginning. Heritage energetically marketed its Jim Jordan (R-Ohio) and Sen. Jim DeMint (R-S.C.) Wyden (D-Ore.) announced that they would start the speculation. Working in partnership with national media provisions to lawmakers and public opinion leaders. introduced bills that would overhaul the nation’s New Year with a proposed reform for Medicare premi- outlets, we put together a series of panel discussions prior We traveled the nation, meeting with editorial boards, welfare programs in the plan’s image. um support similar to recommendations in Saving the to the GOP presidential debates in Iowa, Nevada, New syndicated columnists, radio and TV broadcasters and Heritage events in Washington and across the coun- American Dream. Hampshire and Florida. The topic: What issues are most important to conservatives, and what do they hope to learn from these debates? To throw more light on the appallingly neglected issue of national security, we partnered with the American Enterprise Institute (AEI) and CNN to host the Nov. 22 GOP presidential candidates debate at DAR Constitution Hall here in Wash- ington. The debate focused exclusively on de- fense and foreign policy questions, all posed by

The Heritage Foundation Board of Trustees (from left): Midge Decter; Robert J. Herbold; Meg Allen; Robert Pennington; Brian Tracy; Richard M. Scaife, Vice Chairman; David R. Brown, Trustee Emeritus; Abby Moffat; Nersi Nazari; Douglas F. Allison; Thomas A. Saunders III, Chairman; Edwin J. Feulner; Jerry Hume; Phillip N. Truluck; J. Frederic Rench, Secretary; Barb Van Andel-Gaby; Larry P. Arnn; J. William Middendorf II; Kay Coles James; Belden Bell; Todd W. Herrick; Marion G. Wells; Steve Forbes. (Not pictured: Photo: Frasierphoto.com William E. Simon, Jr.)

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Edwin Meese, Heritage’s Ronald Reagan Distinguished Fellow, accepts the Family Research Council’s Vision and Leadership Award Oct. 8 at the Values Voter Summit in Washington.

Heritage and AEI experts. Not only was the format unprecedented, but pundits from across the political spectrum called it the most serious and substantive debate yet. Long before that debate, Heritage Action pressed the case to fund defense at levels needed to guard against foreseeable threats, rather than declare a “peace dividend” and plunder Pentagon accounts to preserve dubious domestic programs. At year’s end, Sens. John Photo: Light Productions Photography Productions Light Photo: Kyl (R-Ariz.), Kelly Ayotte (R-N.H.),

Lindsey Graham (R-S.C.) and John McCain (R-Ariz.) administration’s infatuation with the “balanced” Photography Hills David Photo: announced they would introduce legislation to block a approach of raising taxes in the Budget Control Act of Heritage Senior Management (from left): David Addington, Vice President; John Fogarty, Vice President; Ted E. Schelenski, Vice President; Becky Norton half-trillion-dollar cut in defense funding triggered by 2011. Heritage and Heritage Action insisted that the Dunlop, Vice President; Kim R. Holmes, Vice President; Phillip N. Truluck, Executive Vice President (front); Matthew Spalding, Vice President; Michael the failure of the deficit “super committee.” Instead, solution to overspending is less spending, not higher M. Gonzalez, Vice President; Michael Spiller, Vice President; Edwin J. Feulner, President; Stuart M. Butler, Distinguished Fellow; Genevieve Wood, Vice their bill would produce the desired savings elsewhere. taxes. The final budget bill excluded tax increases. President; Edwin Meese III, Reagan Fellow; Derrick Morgan, Chief of Staff; Michael G. Franc, Vice President; John Von Kannon, Vice President and Senior Counselor. (Not pictured: Robert E. Russell Jr., Counselor) Our new investigative reporting unit pried a heavily Getting Results redacted copy of the Yucca Mountain safety evaluation We discovered that the report showed Yucca to be a Club to honor author and journalist M. Stanton Evans for Throughout 2011 Heritage contributed to many report from the Nuclear Regulatory Commission (NRC). safe storage facility. Our exposé put the NRC on the his decades of service to the conservative movement. satisfying victories. Some, like the approval of three defensive—both for initially redacting the report’s But it is to our members that we pay our highest trib- long-negotiated free-trade agreements, were years in conclusion and for stalling approval of the site—and ute. Throughout this alarming year, we drew inspiration the making. Others, like the administration’s decision to Heritage “By the Numbers” sparked a congressional hearing. Energy Secretary and support from your steadfast dedication to saving shelve a new “Christmas tree tax,” came within hours of 2011 Production Steven Chu and NRC Chairman Gregory Jaczko were the American Dream. We welcomed nearly 100,000 new Heritage picking up the cudgels. n 188 public lectures questioned on both points at the hearing. supporters in 2011, and contributions reached an all- One of the most satisfying wins came when n 346 WebMemos time high. congressional conservatives stood firm against the n 131 Backgrounders Honors Won, Honors Given Our members—new and old—are the soul of The n 14 Legal Memoranda Heritage won new honors in 2011. Institutionally, Heritage Foundation, still the most influential think tank we received the highest possible rating from Charity in America. To you we extend our most sincere thanks. n 3 White Papers In Memoriam Navigator for “sound fiscal management and Sincerely, n 5 moot court sessions for Supreme Court commitment to accountability and transparency.” advocates And, at the Values Voter Summit, our Ronald Reagan n 30 issue briefings for candidates Distinguished Fellow Edwin Meese received the 2011 n 47 congressional testimonies Vision and Leadership Award. n 1 GOP presidential candidate debate We bestowed several richly deserved honors, as well: n Clare Boothe Luce Awards—honoring dedication to 2011 Communications the conservative movement —went to Roger Ailes in n 9.6 million visitors to Heritage.org April, Richard M. Scaife in May and Dick Cheney in n 3,508 radio interviews October, n 1,339 television interviews n

Photos: Chas Geer Chas Photos: Dr. Hal Scherz, founder of Docs 4 Patient Care, n

1,400+ commentaries in major print outlets Frasierphoto.com Photo: Photography Hills David Photo: Tony Blankley Malcolm Wallop won our Henry Salvatori Prize for American n 6.1 million visitors to “The Foundry” blog Citizenship, and Jan. 21, 1948 – Jan. 7, 2012 Feb. 27, 1933 – Sept. 14, 2011 n n Journalist, public servant, Former U.S. Senator and 225,000 “Morning Bell” e-newsletter subscribers Sixth Circuit Court of Appeals Chief Judge Alice Visiting Fellow in National Heritage’s first Chung Ju-Yung n 400,000 Heritage Facebook friends M. Batchelder received our “Defender of the Security Communications. Fellow for Policy Studies. n 162,000 Heritage Twitter followers Constitution” award. Thomas A. Saunders III Edwin J. Feulner We also hosted a tribute dinner at the National Press Chairman President

4 the heritage foundation 2011 ANNUAL REPORT 2011 ANNUAL REPORT the heritage foundation 5 Am e r i c a n Dr e a m Am e r i c a n Dr e a m Photos: Chas Geer Chas Photos: At an April 21 lecture on his book Righteous Indignation, “new media” pioneer Andrew Breitbart teases The Washington Post’s Dana Milbank (in chair, lower left). Breitbart, a good friend of Heritage’s, died 10 months later.

Kate O’Beirne, President of the National Review Institute, confers with Matthew Spalding, Heritage’s Vice President for American Studies, before speaking to congressional staffers

Photo: Chas Geer Chas Photo: enrolled in our James Madison Fellows Program. House Budget Committee Chairman Paul Ryan (R-Wis.) garnered national headlines with his Oct. 26 speech at Heritage entitled “Saving the American Idea.” Accordingly, we rechristened our Center for American Constitutional Guidance for Lawmakers, a series of papers First Principles Studies as the B. Kenneth Simon Center for Principles to help Washington follow a new rule requiring lawmakers and Politics and promoted its director, Matthew Spalding, to file a statement of constitutional authority with every to a new Senior Management post: Vice President for bill they sponsor. Foundation of the Dream American Studies. The Simon Center also debuted New Common Sense, While the Left derided Tea Party members as “terror- an e-newsletter that relates current policy battles to The Founding Fathers had a dream: a nation founded not on raw power, but on eternal ists,” “racists” and “Nazis,” we proudly co-sponsored Ohio’s America’s First Principles. The new publication found a principles—that all men are created equal, that they are endowed with God-given, state Tea Party convention in July. There, we distributed receptive audience. By year’s end, it boasted more than unalienable rights to life, liberty and the pursuit of happiness. more than 3,000 Heritage books, booklets and essays. 22,250 subscribers. Spalding conducted a seminar for more than 70 Tea Party Marking Constitution Day, Sept. 17, we partnered oreover, the Founders believed that government its billowing sails, government has hauled up more leaders, grounding them in First Principles and explaining with Classical Conversations, a home-schooling support existed solely to secure those rights and that its canvas. From 2008 through 2011, Washington embarked how they serve as a trusty compass to deal effectively with organization, to distribute 20,000 copies of Heritage’s Mpower derived solely from the consent of the on an unprecedented spending binge. In the process, today’s policy challenges. Earlier, he had provided simi- pocket Constitution and Declaration of Independence at governed. From these few principles flow the freedoms our leaders have assumed statist powers found nowhere lar training for state activists and Tea Party leaders from celebrations around the nation. and the opportunities that make the American Dream in the Constitution. Texas, Oklahoma, Louisiana and Arkansas. Heritage experts spoke about First Principles before possible. The Heritage Foundation has met this reckless When word went out that Spalding’s We Still Hold 4,000 at CPAC’s September regional meeting in Florida, Today that dream is in danger. Eight decades of expansion of government with a defiantNo! Battling These Truths had gone into its third printing, more than and before 3,000 at the October Values Voter Summit in “progressive” policy have vastly expanded government’s against these ruinous encroachments on the American 100 Tea Party coordinators in 23 states requested copies of Washington, D.C. power, its demands on our pocketbooks and its Dream, we launched a major counteroffensive in 2011. the book and the Leader’s Guide. By year’s end, more than Bottom line: It was a year of rallying to repel the reach into our everyday activities. Mushrooming First, we made some organizational changes. With 4,000 individuals had purchased the materials needed to Left’s attacks on America’s First Principles. And defend “entitlements” are driving America down the path to America’s First Principles imperiled, we determined to hold a We Still Hold These Truths study group. them we must, for they are the strongest ramparts of economic ruin. But rather than change course and trim roll out heavier artillery in defense of those principles. We didn’t forget Congress. The Simon Center launched freedom.

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of all six plans commissioned by the Entitlements Peterson Foundation determined that Saving the American Dream generated the lowest level of federal Saving the American Dream spending, the least taxation and the In 1893, five-year-old Israel Baline and his family fled persecution in Russia and came largest reduction in the national to New York. In their windowless basement flat on the lower East Side, Israel often debt. Having bested the competition, heard his mother murmur, “God bless America.” we began marketing our plan, not s an adult, Israel became a composer. And his n recasts Social Security, Medicare and Medicaid just to Capitol Hill, but to Ameri- mother’s prayerful phrase inspired one of his into financially sustainable programs that, for the cans everywhere. We created a most beloved songs. first time ever, guarantee no retiree will slip into website, savingthedream.org, to A poverty; explain how our approach benefits Israel Baline was Irving Berlin, one of countless millions who lived the American Dream—and n creates a new flat tax that replaces all other federal all segments of society: families, celebrated it. taxes, including the payroll tax; low-income workers, entrepreneurs, Today, however, a fiscal nightmare threatens to n fully funds national defense while balancing the millennials, baby boomers and retir- Photo: Carpe Vita Photography Vita Carpe Photo: overwhelm the American Dream. Were he to arrive federal budget within 10 years without raising ees. Our Strategic Marketing team Alison Fraser, Director of the Roe Institute for Economic Policy Studies, outlines our plan for Saving taxes, and produced a suite of promotional in New York today, little Israel Baline would inherit the American Dream at a Dec. 5 gathering of Heritage members in Dallas. a share of national debt totaling more than $36,000. n permanently reduces federal spending to 18.5 brochures, booklets and videos that That debt grows by $3 billion a day. Our three biggest percent of GDP. (It was 23 percent last year.) In floor debate over were widely used at conferences entitlement programs alone have piled up unfunded We call this groundbreaking plan, simply, Saving the a Balanced Budget around the country. Amendment, Senate obligations running into scores of trillions of dollars. American Dream. Heritage experts reviewed the Finance Committee Stuart Butler, director of our Center for Policy Inno- plan with editorialists at major Heritage is fully committed to preserving the dream for Ranking Member D.C. media including Congressional future generations. And so, in 2011, we unveiled one of our vation, premiered the plan at the 2011 Fiscal Summit or- Orrin Hatch, R-Utah, most ambitious proposals yet—a comprehensive plan that: ganized by the Peter G. Peterson Foundation. Heritage deploys a graphic from Quarterly, USA Today, The Wall n cuts the size of our federal government by about was one of six policy organizations offering proposals Heritage’s 2011 Budget Street Journal, The Washington half within 25 years; to address America’s fiscal crisis. Independent analyses Chart Book to show Examiner, The Washington Post and that annual interest The Washington Times. They briefed payments on the top syndicated columnists like Cal national debt already exceed spending Thomas and Robert Samuelson. on most federal Then they fanned out to explain the departments. plan to editorial boards and other opinion leaders across America. Butler toured New England, Saving the American Dream Plan meeting with the New York Post, Quickly Reverses Course of Debt Boston Globe, Christian Science President Obama’s 2012 budget proposal would drive debt to 87 percent of the economy Monitor, Providence Journal and by 2021. In contrast, The Heritage Foundation’s Saving the American Dream plan would others. Meanwhile, Alison Acosta lower debt to 58 percent of Gross Domestic Product in 10 years. Fraser, director of our Roe Institute DEBT AS A PERCENTAGE OF GDP 87.4% of Economic Policy Studies, headed 90% PRESIDENT West. In one week, she hit The Dal- OBAMA’S 80% BUDGET las Morning News, Arizona Repub- lic, Las Vegas Journal-Review, Los 70% Angeles Times, Investor’s Business 60% HERITAGE Daily and Orange County Register. Average, 1981–2010: PLAN 50% 40.6% 58.2% Then she swung east to New York, 26.1% briefing reporters and producers at 40% CNBC, CNN, Bloomberg, FOX News 30% Channel and more. 20% Butler visited Israel Baline’s 1980 1985 1990 1995 2000 2005 2010 2015 2020

Photo: Face to Face Photography Face to Face Photo: adoptive hometown, too. In a Sources: Congressional Budget Office, White House Office of Management and Budget, Heritage Foundation Stuart Butler (second from right), Director of our Center for Policy Innovation, presents Heritage’s “Saving the American Dream” plan at the 2011 Fiscal calculations based on current projections. televised face-off on FOX’s “Stossel,” Summit convened May 25 by the Peter G. Peterson Foundation. his presentation of Saving the

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Protect America Defending the Dream Many “progressives” view national defense as just another government function… one that pinches spending on their pet social programs. But defending America is a constitutional duty.

Stuart Butler shows off John Stossel’s Emmy. The Fox Business News host had offered the statuette to the think tank offering the best plan—as voted by viewers—for solving the nation’s

fiscal crisis. Geer Chas Photo:

American Dream trounced the fiscal reform proposals $16.394 trillion from four other think tanks… and Butler walked off with Additional $1.2 trillio n one of host John Stossel’s “Emmys.” projected in 2012 All the while, of course, we promoted the $15 $500 billion added Sept. 21 plan’s recommendations on the Hill, briefing key trillion $400 billion added Aug. 2 $14.294 Representatives like Budget Committee Chairman Paul trillion Ryan (R-Wis.) and Senators such as ranking Finance as of The Budget Control Committee member Orrin Hatch (R-Utah) and Joint February Act Increases the Debt Geer Chas Photo: 12, 2010 Economic Committee members Jim DeMint (R-S.C.) Limit by $2.1 Trillion and Mike Lee (R-Utah). In dozens of follow-up meetings eritage believes the budget should provide what’s Former Defense Secretary Donald Rumsfeld thanks two of the Air with senior staff, Heritage analysts dove into the details. needed to safeguard our nation against current Force’s finest while signing copies of his memoir after a Feb. 22 lecture in The Budget Control Act of Heritage’s Allison Auditorium. Next to Rumsfeld is Lectures and Seminars $10 Amid all this activity, the House approved, 235-189, and future threats, not simply reflect what’s left 2011—the product of debt H Director John Hilboldt. limit negotiations in August Ryan’s “Path to Prosperity” budget plan. It contained over after everything else has been funded. This was the 2011—allows Congress and the precisely the kind of Medicare and health reforms theme of our yearlong “Defending Defense” initiative. We also pressed the message in countless Capitol Hill President to raise the debt limit proposed in Saving the American Dream. It actually started Oct. 4, 2010, with a Wall Street briefings and seminars. In just one remarkable session, in three tranches. The first $900 By year’s end, strategically chosen components of Journal column by Heritage President Edwin Feulner, Heritage experts James Carafano, Baker Spring and billion increase has already Heritage’s plan—including welfare as well as Medicare American Enterprise Institute (AEI) President Arthur Mackenzie Eaglen briefed more than 100 Hill staffers on occurred. Because the Super reforms—had been proposed in both the House and Brooks and Foreign Policy Initiative Director William “Defense 101: An Overview of Defense Policy and Budgets.” $5 Committee failed to reach an Senate, paving the way for future introduction of the Kristol. In “Peace Doesn’t Keep Itself” they argued that And we testified 10 times before congressional committees agreement, automatic budget entire plan. the soaring deficits of recent years arise from huge spikes about the need to maintain a strong national defense. cuts totaling $1.2 trillion will In all the meetings—under the dome, in studio or in domestic—not defense—spending. Moreover, we need With congressional liberals determined to gut the be triggered beginning in 2013. inside editorial boardrooms—we harped on one truly to rebuild our war-depleted inventories and make the in- military budget, we decided to take the issues—and our Then the debt limit can also fundamental fact: The impending fiscal crisis reflects vestments in military modernization needed to counter concerns—to the American people. And so, in partnership be increased by $1.2 trillion to a spending problem, not a revenue problem; it must be emerging threats. with AEI and CNN, we sponsored a nationally televised $16.394 trillion. solved on the spending side of the ledger. It was a theme we hit again and again throughout the debate among GOP presidential candidates. The event, year, not just in our Protect America Month lecture series, held in DAR Constitution Hall, dealt exclusively with $0 And no matter how deep in the weeds we went to solve technical policy challenges, we never lost sight but in a series of influential reports prepared by our De- foreign and defense policy issues. Sources: U.S. Department of the Treasury, Office of Management and Budget, and Congressional Research Service. of the goal: Saving the American Dream for future fending Defense coalition for incoming Defense Secretary More than 9 million viewers watched the live debate generations. Leon Panetta. on CNN, and millions more viewed it on CNN en Español,

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recommendation for further Protect America Month development of a missile to counter Defense Spending Has Declined longer-range ballistic missiles. As Entitlement Spending Has Increased Proclaiming May to be “Protect A major theme of these events: Our determined and well- Spending on national defense, a core constitutional function of government, has declined America Month,” Heritage We should base defense spending organized opposition to New START significantly over time, despite wars in Iraq and Afghanistan. Spending on the three major sponsored a series of high-powered on what’s needed to meet current surprised the internationalist entitlements—Social Security, Medicare and Medicaid—has more than tripled.

events driving home the need to and foreseeable threats to our crowd. Rather than risk another PERCENTAGE OF GDP national security. 10% make strong defense a national bruising battle, administration 1976 was Entitlements priority, even with a lagging officials wound up shelving plans to the first year (Social Security, Just what is needed and how much entitlement Medicare, Medicaid) economy. In 2011 we went outside push for ratification of two other, 8% spending 10% will it cost? That’s what Reps. West, exceeded the Beltway, holding events to equally objectionable pacts: the defense Duncan Hunter (R-Calif.) and Trent spending Comprehensive Test Ban Treaty and 7.4% reach opinion leaders in New York Franks (R-Ariz.) asked Heritage in the 6% the Law of the Sea Treaty. and Houston. Headliners included weeks leading up to Protect America National On the homeland security front, Defense former Defense Secretary Donald Month. Our experts answered those 4% 2.5% Rumsfeld; Gen. Peter Pace, former a report from the Government

critical questions in the Special Geer Chas Photo: 5% Accountability Office recommended chairman of the Joint Chiefs of Staff; Report: “A Strong National Defense: st Rep. Allen West, R-Fla., describes “The 21 reform of homeland security grants— 2% Sen. Kelly Ayotte (R-N.H.) and Rep. The Armed Forces America Needs 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Century Battlefield” in his closing address something first proposed by Heritage Allen West (R-Fla.). and What They Will Cost.” May 31 for Protect America Month. 2011 figures are estimates several years ago. Source: White House Office of Management and Budget. And Homeland Security Secretary CNN International, American Forces Network and President Kim Holmes, Carafano and Spring led Congress Janet Napolitano announced the U.S. would no longer try Rep. Buck McKeon (R-Calif.), chairman of the House C-SPAN’s multiple rebroadcasts. Heritage members got to add several improving amendments to the treaty. One, to screen 100 percent of freight containers entering U.S. Armed Services Committee, to craft new legislation on into the spirit, organizing more than 200 debate-watching offered by Sen. Jim DeMint (R-S.C.), commits the U.S. to ports. Heritage had long argued the effort would waste detaining terrorists. Through many articles and media parties around the nation. The debate won rave reviews— strengthening missile defenses. money and cripple global trade. DHS also adopted our interviews, Stimson explained why terrorist detainees and raised awareness of this critical issue. And Rep. Michael Turner (R-Ohio), chairman of the longstanding recommendation to reform the color-coded should be tried before military commissions, not criminal Of course, Heritage was active on many defense matters House Strategic Forces Subcommittee, introduced the terror alert system, a complex mess that provided endless courts. In accord with our recommendations, the Obama during the year. For example, we led the charge in pointing New START Implementation Act, which included Spring’s jokes for TV comedians. administration ultimately reversed itself, announcing it out the dangers inherent in the New START treaty, recommendations on missile defenses and nuclear Senior Legal Fellow Charles Stimson worked with would resume military commission trials. which requires the U.S. to cut its nuclear stockpiles while weapons modernization. The successful test of a missile letting Russia increase its inventory. Briefings by Vice interceptor weeks earlier bolstered Spring’s longstanding

Lisa Curtis, Senior The Debate America Deserved Research Fellow in The idea of having think-tank executives and scholars our Asian Studies Center, testifies ask the questions worked marvelously well. The queries Sept. 14 before a were much deeper and more substantive than those the House subcommittee candidates typically get from political journalists and on U.S.-India handpicked “regular voters.” counterterrorism —James Taranto, The Wall Street Journal efforts. Finally, America was brought a serious, adult debate where substance was served up from beginning to end. —Eric Golub, The Washington Times

… a substantive debate that brought to the fore Geer Chas Photo: Photo: Face to Face Photography Face to Face Photo: differences among candidates on a variety of foreign Heritage President Edwin Feulner and AEI President Arthur Brooks policy issues … (left) prep the audience at DAR Constitution Hall minutes before Photo: Face to Face Photography Face to Face Photo: eight Republican presidential candidates take the stage for a national His features masked, House Armed Services Committee Chairman —Jim Rutenberg and Jeff Zeleny, The New York Times security debate telecast worldwide by CNN. former CIA spy Reza Howard P. “Buck” McKeon, R-Calif. (left), Kahlili joins Senior is greeted by Kim Holmes, Heritage Vice … the questions were pointed, sobering and even educational… —Noah Rothman, ology.com Research Fellow James President for Foreign and Defense Policy Phillips in a May 25 Studies, as he arrives May 5 to give the … probably the most substantive and serious presidential debate of this election cycle. panel discussion of the opening address for Protect America Month. growing nuclear threat —Michael Barone, The Washington Examiner from Iran. Photo: Chas Geer

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Health Care Why Obamacare Is Wrong for America Robert Moffit, a Senior Fellow in Heritage’s Center for Policy Innovation, Fighting the Government Takeover of Health has long specialized in health care and Medicare reform. In 2011, he teamed with three outside health policy experts to co-author Why The numbers are frightening. In 2010, ObamaCare Is Wrong for America. The book presents a comprehensive— Americans spent $2.6 trillion on health and compelling—case against this misguided attempt to place American care—one-sixth of total GDP. health care under government control. edicare enrollment rose to 47.5 million. By More than 100 attended the book release in March at the National Press 2030 that number will reach 80 million, and Club. The four authors presented detailed overviews of the book in a panel government will control half of all health care discussion that ran more than an hour and aired five times on C-SPAN’s “Book

M Geer Chas Photo: Fighting the Government Takeover of Health spending—if current policies remain in place. TV.” The video was also placed on “Book TV’s” website for online viewing. That’s just one reason Heritage is working so hard to Senior Fellow Robert Moffit warms to his topic Shortly afterward, the book earned plaudits on Capitol Hill. Sen. John educate Congress about the odious side effects arising at the March 24 book event at the National Barrasso (R-Wyo.) even lauded it in a speech on the Senate floor. Press Club. from the 2010 passage of the Patient Protection and Affordable Care Act (PPACA, or “Obamacare”). This law would put most Americans into a government-run of papers and commentaries exposing a dirty fiscal secret health system. of the PPACA: The bill itself authorized mandatory In spring 2011, we published a 15-paper series making appropriations totaling $100 billion to implement the “The Case Against Obamacare.” The analyses showed, bill. Worse, this pre-approved spending was not subject from a variety of vantage points, why PPACA must be to the regular appropriations process. Following Istook’s repealed and outlined a host of market-based reforms to recommendations, the House Energy and Commerce get health care right. Committee approved five pieces of legislation to de-fund Heritage also explored ways to limit PPACA-induced these auto-piloted expenditures. damage until full repeal was possible. Our research Stuart Butler, Director of our Center for Policy demonstrated that, by exercising its “power of the purse,” Innovation, traveled widely to brief opinion leaders Congress could effectively block key provisions of the law on major problems with the PPACA and explain the from going into effect. Congressional oversight could also Photo: Chas Geer Chas Photo: advantages of pursuing a health system centered on Maine Gov. Paul LePage, in a July 18 lecture at Heritage, describes how his impede implementation of onerous regulations issued in private, competitive markets and consumer choice. He state repealed a failed government-run health care plan and replaced it furtherance of the new law. brought the message to a variety of venues including with market-based insurance reforms. Distinguished Fellow Ernest Istook authored a series Harvard University’s retreat for new Members of Congress, the Commonwealth Fund Retreat for Hill staff, the U.S. Government Accountability Office… even the Helping States Get Health Reform Right World Health Congress. Butler’s colleague, Senior Fellow Robert Moffit,

Heritage wasn’t alone in its criticism of state reform issues with DC-based for resisting the federal takeover Geer Chas Photo: also addressed key outside-the-Beltway groups of the Patient Protection and health reporters, Owcharenko led a of their health systems and Nina Owcharenko, Director of our Center for Health Policy Studies, fields ranging from Tea Party conventions to professional Affordable Care Act (PPACA) or parade of reform-minded governors implementing better reforms to a question on how states can pursue practical, affordable, consumer- its conviction that states—rather into Heritage lecture halls. Utah Gov. benefit their citizens. conferences of the Southern Medical Association and centered health care reforms. than federal bureaucrats—would Gary Herbert spoke on “Fighting for the American Legislative Exchange Council. Back in Senior Research Fellow Edmund be better able to determine how Real Health Reform: States Know Washington, Moffit conducted numerous Hill briefings she put it, there is “no viable path forward for CLASS Haislmaier testified before the best to help their citizens get What Is Best for States.” Maine on PPACA, including a “Hill 101” seminar organized implementation at this time.” Pennsylvania and Georgia legisla- quality, affordable health care. Nina Gov. Paul LePage explained how he by Heritage Action for America that drew scores of Our Center for Legal and Judicial Studies also joined tures on ways to create effective Owcharenko, Director of our Center dismantled Maine’s Obamacare-like congressional staffers. the PPACA legal debate, filing its first-ever friend- health insurance exchanges. But th for Health Policy Studies, led her health policies. Sen. Orrin Hatch In March, Heritage published “Secretary Sebelius of-the-court brief in the 11 Circuit challenge to the most of the year we toiled behind team in educating state officials (R-Utah) wrapped up the series with Cannot Fix CLASS,” a prescient paper warning Congress law. The administration’s brief in that case quoted a the scenes, traveling to more than a about policy alternatives that would a lecture on “Empowering the States: that CLASS—a new, long-term health care program prior Heritage lecture out of context to support its dozen states where leaders sought allow them to escape the shackles of A Path to Reforming Medicaid.” tucked away in PPACA—was fiscally unsustainable. It position. Our brief exposed that distortion and clarified to create pro-market health care one-size-fits-all PPACA regulations. could only compound the nation’s fiscal problems. Seven Heritage’s real policy position. It concluded that the In November, Heritage hosted alternatives before the most oner- months later, Health and Human Services Secretary individual mandate in PPACA is “unwise policy and ... After joining Indiana Gov. Mitch leaders from 19 states who ous provisions of PPACA take effect Kathleen Sebelius announced she was suspending the unconstitutional legislation.” There should be no Daniels for a roundtable discussion gathered to discuss strategies in 2014. CLASS program “indefinitely.” Her reason? There misunderstanding of our views when the U.S. Supreme was no possible way to make the numbers work. Or, as Court hears the case in 2012.

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Rule of Law Policy Foundation and the Illinois Policy Institute, these We also continued our fight against overcriminal- events drew enthusiastic audiences of state lawmakers, ization—the massive expansion of criminal penalties committee chairmen and Executive Branch officials for acts best dealt with in civil courts. In the spring, we Preserving the Rule of Law committed to commonsense reform of civil law. published a Criminal Law Checklist for Federal Legisla- tors delineating the questions Congress should ask and As colonists, the Founders had experienced life under an arbitrary and capricious answer before attaching criminal penalties to a law. regime, one in which might made right. It’s why they were determined to create a Our nine-month collaboration with Wall Street Jour- government with limited powers constrained by the rule of law. nal reporters produced a series of front-page stories on overcriminalization. The series highlighted several or democracy to survive, the law must protect the Chairman of the Joint Chiefs. More than 160 attended, cases that Heritage had investigated and documented in right to vote and the integrity of the electoral pro- including several state government Secretaries of our research studies. Fcess. Perversely, in modern America, those called State—the officials responsible for making sure that Editorials in The Wall Street Journal and Washington upon to defend our liberties overseas are among those our warriors overseas get their ballots in time to be cast Times endorsed one of our key procedural recommen- most likely to be disenfranchised. Too often, state of- and counted. dations—that all federal criminal legislation be referred ficials send out absentee ballots too late for military per- Von Spakovsky also defended the right of all Americans to the House Judiciary Committee. In the fall, our brief- sonnel manning the front lines to get their votes counted. not to have their votes negated by fraudulent ballots. In ing with the National Association of Criminal Defense

To redress this situation, Sen. John Barrasso (R-Wyo.) scores of newspaper commentaries and broadcasts, he laid Stewart Brandon Photo: Lawyers, entitled “Have You Committed a Felony To- introduced the Military and Overseas Voters’ Relief Act. out incontrovertible facts disputing Justice Department day?” drew more than 130 Capitol Hill staffers. Based on model legislation drafted by Heritage legal contentions that Voter ID requirements disenfranchise The Long Arm of Overcriminalization To keep Hill staffers, legal professionals and any scholars Hans von Spakovsky and Charles Stimson, the bill the poor and suppress voter turnout. In 1997, racing legend Bobby Unser appeared in others interested in staying current on the most would amend current law to guarantee U.S. citizens abroad At the state level, von Spakovsky and Robert Alt, criminal court. He faced a $5,000 fine and six months important cases moving through the courts and an opportunity to vote. Director of our Rule of Law Programs, conducted a series in federal prison. Why? He got lost in a blizzard. A emerging legal issues of note, we launched Liberty We also convened a half-day conference on the issue, of state tort reform conferences to lay a foundation for Heritage video tells the story at http://blog.heritage. and Justice for All in September. By year’s end, the featuring speakers such as Sen. John Cornyn (R-Texas) effective reform legislation in 2012. Partnering with org/2011/03/14/bobby-unser-vs-the-feds/ biweekly e-newsletter boasted more than 15,000 and Adm. Edmund P. Giambastiani, former Vice state-based think tanks such as the Georgia Public subscribers.

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American Leadership Tracking China’s Investments Leading Other Nations to Dream of Freedom As the administration introduced the novel concept of “leading from behind,” Heritage stepped up efforts to restore America’s role as a true leader among nations.

he year opened with release of our 16th annual Index of Economic Freedom, a nation-by-nation measure Tof economic freedom. Given the benefits that flow WORLDWIDE from advances in economic freedom—from prosperity to environmental improvement to individual well-being— $172.4B easing repressive economic policies is vitally important. Unfortunately, the 2011 report was not positive. Washington’s deficit spending, combined with heavy- handed intervention in financial and industrial markets, $85.1B pushed the U.S. rating to a three-year low. Denmark $60.2B $38B $35.2B passed us in the global rankings—a fact cited frequently $25.2B $10.2B by House Majority Leader Eric Cantor (R-Va.) in floor $8.6B $8.4B $443.2B speeches calling for reduced government interference in 2005 2006 2007 2008 2009 2010 2011 TOTAL the economy. =$6B YEARLY TOTALS The Index attracted extensive media attention, and CIRCLE SIZE REPRESENTS TOTAL INVESTMENT CHINA’S WORLDWIDE INVESTMENTS AND CONTRACTS the interactive website (http://www.heritage.org/index) Our Asian Studies Center’s China Global Investment Tracker, created by Senior Research Fellow Derek Scissors, set a new record for traffic. Experts from our Center for was featured in Barron’s and on the BBC. A comprehensive dataset of large Chinese investments and contracts International Trade and Economics circled the globe, worldwide, the Tracker informed economic news stories throughout the year, prompting requests for more in- presenting Index findings and promoting economic formation from the New York Federal Reserve and the U.S. trade representative.

Photo: Chas Geer Chas Photo: freedom from Hong Kong to Honduras, from Costa Rica to In the 2011 installment of Heritage’s B. C. Lee Lecture Series, Sen. Joseph Kiev, from Tokyo to Tbilisi. focuses on the importance of American leadership in the allowing dictator states to import and export all the guns Leiberman, I-Conn., discusses “Peace Through Strength: The Imperative of In November, Sen. Joe Lieberman (I-Conn.) delivered American Leadership in Asia” in Allison Auditorium. our annual B.C. Lee lecture, the 15th in this series that Asia-Pacific region. He emphasized the need to ratify they want. When the administration signaled interest in free-trade agreements with other nations — a policy long this agreement, Ted R. Bromund, our Margaret Thatcher advocated by Heritage. Senior Research Fellow, helped the office of Sen. Jerry Mo- As the year drew to a close, Congress seemed to be ran (R-Kan.) draft a letter urging its rejection. Signed by 45 Helle Dale: Dynamo for getting the message. It ratified free-trade agreements with GOP Senators, the missive inspired a similar letter signed Public Diplomacy Colombia, Panama and South Korea. The three pacts are by 13 Democratic Senators. The treaty went nowhere. expected to boost U.S. exports and increase GDP by $12 Helle Dale, Heritage’s Senior Fellow for Public Diplomacy, billion a year. proved an influential voice for global freedom throughout 2011. The United Nations, meanwhile, continued to be a font In February, she testified before Congress on the future of Voice of wasteful spending, a coddler of despots and a source of of America (VOA). pernicious international pacts. One such pact, the U.N. The Broadcasting Board of Governors (BBG) had proposed Arms Trade Treaty, poses Second Amendment risks while shifting all VOA programs to the Internet. Citing China’s strict censorship of Internet communications, Dale stressed the need to maintain Chinese radio broadcasts. Brett Schaefer, UN Watchdog­ Following her testimony, the BBG launched a strategic review In papers, congressional briefings and testimony before of its policies, and Congress appropriated funds specifically to the House Foreign Affairs Committee, Brett Schaefer,

Photo: Chas Geer Chas Photo: keep the radio broadcasts going. Heritage’s Jay Kingham Fellow in International Regulatory The BBG later adopted another Dale recommendation: to keep the Office of Cuba Broadcasting in Miami rather than Affairs, exposed U.N. budgetary issues that led directly move it to Washington. And, by year’s end, the State Department adopted her advice to provide dissidents, from Iran to legislation aimed at cutting U.S. contributions to irresponsible international organizations. to China, with technology that can bypass government-imposed Internet restrictions. Geer Chas Photo:

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Energy & Environment Pursuing Rational Energy and Environmental Policy Photography Face to Face Photo: The American Dream runs on energy, and government of late has gone overboard on failed energy policies. Exhibit A: the scandalous waste of taxpayer funds on Solyndra, the now defunct solar-energy company.

ur energy team made sure policymakers learned drew their sponsorship of the bill, and the NAT GAS Act the hard lessons of this folly. In commentaries fell into legislative limbo. Oin The Washington Post and USA Today and in In November Rep. Mike Pompeo (R-Kan.) introduced numerous broadcast appearances, Heritage experts ex- the Energy Freedom and Economic Prosperity Act. It plained why using government subsidies to pick winners would roll back energy tax subsidies and reduce corporate and losers in the marketplace leads inevitably to crony tax rates on energy producers—moving them all out of capitalism, corruption and distorted markets. the federal trough and into competitive markets. The bill Throughout the spring, energy analysts Jack Spencer reflected the persistent work of Spencer and Loris making and Nicolas Loris responded to numerous congressional the case against all energy subsidies. inquiries about the pending NAT GAS Act, H.R. 1380, a bill Just as misguided and destructive as subsidies is over- David Kreutzer, Research Fellow stuffed with subsidies. They met with Hill staff to translate regulation. In response to the Environmental Protection in Energy Economics and Climate conservative principles into sensible energy and environ- Agency’s inflated estimate of benefits derived from regu- Change, testifies on energy tax policy at a Sept. 22 hearing of mental policy. Meanwhile, Heritage Action for America lations issued under the Clear Air Act, Regulatory Affairs two House Ways and Means joined with 40 other groups to issue an open letter oppos- Research Fellow Diane Katz exposed the agency’s flawed subcommittees. ing energy subsidies of any kind. Fifteen members with- methodology and other errors underlying those claims. Heritage continued to lead the fight against unneces- sary regulation of greenhouse gases, forming a working group of organizations allied on the issue. As the House debated the Energy Tax Prevention Act, which would strip the EPA of authority to regulate CO2 emissions, Katz’s re- search work was cited often. David Kreutzer, our Research Fellow in Energy Economics and Climate Change, testified several times on how CO2 regulations would raise energy costs while reducing income and employment. Ultimately, the bill to rein in the EPA passed the House. Following Japan’s nuclear disaster, caused by an earthquake and tsunami, Heritage moved forward with a documentary analyzing the risks and benefits of nuclear power. Slated for release in 2012, the video acknowledges Is nuclear energy safe? Do we really need it? How the seriousness of the Japanese disaster and explains how do nuclear plants affect the people who work or safety systems in place at U.S. and other plants could have live nearby? What, exactly, are the risks? Heritage’s prevented a similar calamity under the same conditions. 39–minute documentary “Powering America” answers Sen. Tom Coburn (R-Okla.) proposed groundbreaking these questions and more. legislation that drew heavily on research by Spencer and Lo- ris. It would allow the private sector to handle nuclear waste Educational and engaging, “Powering America” and close numerous offices in the Department of Energy. presents a behind-the-scenes look at how uranium And Spencer’s papers and testimony on the proposed mines, nuclear power plants and used-fuel recycling Yucca Mountain nuclear waste repository helped prevent facilities work around the globe. With production the administration from closing down the project. The completed in 2011, the film was slated for a spring

Photo: Face to Face Photography Face to Face Photo: House also barred any funding to end the Yucca program 2012 debut on The Documentary Channel, as well as a In an Oct. 27 House joint subcommittee hearing, Jack Spencer, Heritage’s Senior Research Fellow in Nuclear Energy Policy, assesses draft and called for the Nuclear Regulatory Commission to limited theatrical release. recommendations from the Blue Ribbon Commission on America’s Nuclear Future. stop foot-dragging in its review.

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affect any institution using industrial boilers. The EPA subsequently postponed implementation of those rules. The financial sector took a heavy hit from the regulators, due largely to last year’s Dodd-Frank bill. In 2011, Heritage focused on an especially egregious creature of Dodd-Frank: the so-called Consumer Financial Protection Bureau (CFPB). Time and again, we highlighted the powerful new agency’s total lack of congressional oversight and its “guaranteed” budget, exempt from the appropriations process. Ultimately, 44 Republican Senators declared redress- ing these problems a non-negotiable issue. They informed the president that, unless he worked with them to bring the CFPB budget “online” and to provide for congressional oversight, they would not confirm any nominee as CFPB di- rector. The White House balked, and the Senators held firm. In November the nomination of Richard Cordray failed. [Subsequently, in January 2012, President Obama took the unprecedented and unconstitutional step of appointing Cordray to the post, without senatorial advice and consent.] As the housing market continued to crater, Senior Research Fellow David John issued a paper calling for a truly bold move. No, not another expensive consumer Photos: Chas Geer Chas Photos: Geer Chas Photo: At an Oct. 3 Heritage event, Rep. Darrell Issa (R-Calif.), Chairman of At a March 9 hearing of a House Health Subcommittee, Heritage subsidy or industry bailout. John’s “Free the Housing Sen. Ron Wyden, D-Ore., (left), confers with Sen. Dan Coats, R-Ind., before the House Oversight and Government Reform Committee, calls for Distinguished Fellow Ernest Istook exhumes a host of mandatory Finance Market from Fannie Mae and Freddie Mac” made a Heritage seminar on bipartisan efforts to simplify and modernize the tax restructuring the Postal Service to save taxpayers billions and bring the appropriations buried in the voluminous Obamacare legislation. the case for eliminating these two market-distorting, code. Vice President for Domestic and Economic Policy David Addington agency back from insolvency. government-sponsored entities. (background) hosted the April 7 event.

Enterprise & Free Markets Christmas Tree Tax? Freeing the Dream from Regulatory Shackles Gone in a Day! It was Heritage’s swiftest victory of the year. For foes of excessive government regulation, 2011 provided Bigwigs at the National Christmas Tree Associa- a target-rich environment. tion tried three times to persuade tree growers to pony up 15 cents per tree to fund a marketing mid-year update of “Red Tape Rising,” Heritage’s In separate House and Senate hearings, James campaign. They failed. Many growers weren’t landmark report on the proliferation of stifling Gattuso, our Senior Research Fellow in Regulatory Policy, interested. So the association asked for a little federal regulation, documented the imposition testified on the problems caused by regulatory excess and A government muscle. The Agriculture Department of 15 new “major” regs in just the first six months of 2011. potential legislative remedies. Rep. Don Young (R-Alaska) jumped at the chance, announcing it would ap- Their price tag? One-time implementation costs of $6.5 introduced several regulatory reform bills incorporating point a federal Christmas Tree Promotion Board billion and continuing costs of more than $5.8 billion many of Gattuso’s recommendations. to “enhance the image of Christmas trees” — with annually. To keep up the drumbeat for regulatory reform, a 15-cent “fee” to pay the costs. These findings attracted reams of press coverage, Gattuso launched a bimonthly column for Bloomberg- including a hard-hitting Wall Street Journal editorial. Government.com. And our blog, The Foundry, started Heritage Vice President David Addington blew They were also cited extensively on Capitol Hill, notably a weekly series, “Tales of the Red Tape,” dedicated to the whistle on this federal folly in a Foundry by Rep. Darrell Issa (R-Calif.), Chairman of the House exposing ridiculous new regulations that interfere with post dubbing it the “Christmas Tree Tax.” Oversight Committee. At his request, Heritage compiled Americans’ everyday activities. Within hours, the Drudge Report linked to his a list of the 20 most economically destructive regulations. The author of that series, Research Fellow Diane Katz, post, breaking the news to millions. It sparked A leading liberal blog said the list “most neatly reflects wrote frequently on both federal and local government outrage… and a public uproar. Within 24 hours, the priorities of the conservative movement… [and] attempts to regulate food in the United States. But perhaps the White House announced the fee was being reflects the intellectual center of gravity of the entire her most impactful piece drew attention to the obscure Dreamstime.com Photo: placed on “indefinite delay.” [conservative] movement.” We accepted the compliment. but onerous “Boiler MACT” rules that would severely

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Family & Religion Bolstering the American Family and Self-Reliance The American Dream is built on strong families—the building blocks of civil society, the incubators of personal responsibility. Unfortunately, the welfare state has severely damaged the institution of family.

Domestic Policy Studies Director Jennifer Marshall confers with Robert Woodson, President of the National Center for Neighborhood Enterprise, during our Nov. 17 summit gathering experts from across the country to advance

Photo: Jeffrey Marshall / Pixelrally.com / Marshall Jeffrey Photo: conservative solutions to poverty.

Civil Society produced a dozen articles spotlighting bimonthly meetings of the Religious Liberty Forum, a conservative organizations and individuals using unique assembly of religious liberty scholars, litigators, innovative ways to help people escape poverty, find communicators and advocates in America. greater self-reliance and build stronger families. These In February Heritage relaunched our FamilyFacts.org success stories show that Heritage’s recommended website and started producing an ongoing series of one- approaches for reducing poverty truly work. minute radio spots that provide a “Family Fact of the Day” Understanding poverty is the first step toward solving from the site. By year’s end four prominent Christian radio the problem. In November Heritage took a second networks were airing the feature nationwide. step, convening an organizational conference of 80 conservative anti-poverty warriors—from state welfare agencies and nonprofit service organizations to leading “War on Poverty”… academics. One participant called it “the most impressive The costs keep on rising and authoritative gathering of conservatives concerned Total federal and state welfare spending has increased 13-fold since Lyndon Johnson launched the “War on Poverty.” The Photo: Chas Geer Chas Photo: about the poor in the last 20 years—perhaps ever.” It is the beginning of a unified movement to restore civil society landmark 1996 welfare reforms stayed soaring costs only Rep. Jim Jordan, R-Ohio, Chairman of the Republican Study Committee, discusses his new welfare reform bill in a Jan. 25 speech in Allison Auditorium. temporarily. Heritage anti-poverty expert Robert Rector “helped us tremendously,” Jordan noted. and help the poor rise from poverty while retaining their human dignity and independence. TOTAL WELFARE SPENDING, BY PROGRAM TYPE, IN 2008 INFLATION-ADJUSTED DOLLARS t our January policy retreat for conservative assistance live in larger homes than most Europeans Recognizing the erosion of marriage as one of the $800 members of Congress, Heritage Senior Research and enjoy amenities unknown to—or beyond the means greatest contributors to child poverty, we raised awareness Figures for 2008, in Billions Fellow Robert Rector stressed the need for of—most middle-class American families less than two of this critical issue with well-attended and highly $700 1996: TANF replaces AFDC Housing aid: $42 A Food aid: $63 comprehensive welfare reform. Two months later, Rep. decades ago. They used this data to press a key argument publicized child-poverty conferences in Georgia and $600 Jim Jordan (R-Ohio) introduced H.R. 1167, the Welfare of Saving the American Dream: that anti-poverty programs Indiana and in town hall meetings with Kansas Gov. Sam 1981: Reagan-era Other: $83 $500 welfare reforms Reform Act of 2011. Its sweeping reforms largely reflect must focus on the truly needy. Brownback. Cash: $154 $400 Rector’s work. By year’s end, Sen. Jim DeMint (R-S.C.) had “What is Poverty?” garnered coverage from newswires Our DeVos Center scholars wrote and spoke out against 1964: War on introduced a companion bill (S. 1904) in the Senate. and newspapers such as The Wall Street Journal and new assaults on traditional marriage, including New York’s $300 Poverty begins Medical care: $372 Throughout the year, Rector and his colleague Rachel Investor’s Business Daily and dozens of TV programs like legalization of same-sex marriage, President Obama’s $200 Sheffield challenged the common misperception that most Sean Hannity, Lou Dobbs and Bill O’Reilly. The paper itself decision to support repeal of the Defense of Marriage Total in 2008: $100 $714 Americans now defined as living in poverty are destitute, set new online readership records for Heritage research. Act and religious adoption agencies being forced to shut billion $0 hungry and homeless. Their paper, “Air Conditioning, In a new partnership with World Magazine, down rather than violate their religious convictions about 1950 1960 1970 1980 1990 2000 2008

Cable TV and an Xbox: What is Poverty in the United Director Jennifer Marshall and her team of experts marriage. Meanwhile, Ronald Reagan Distinguished Source: The Heritage Foundation. States Today?” noted that most Americans receiving public in the Richard & Helen DeVos Center for Religion & Fellow Ed Meese and DeVos Center experts co-hosted

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Education Reaching for the Dream on the Wings of Education Liberals pronounced school choice dead in 2010. But 2011 became the Year of School Choice. ollowing a barrage of Heritage research, media appearances and commentaries, the nation’s capital Freinstituted its school voucher program. For the first time since Congress stopped funding in 2009, the D.C. Opportunity Scholarship Program offered hope—and a quality education—to new enrollees. School choice advanced broadly elsewhere, too. A dozen states created or expanded these programs in 2011. And Heritage pressed for even greater gains, hosting an August school choice conference for community leaders Geer Chas Photo: and local education officials in Little Rock, Ark. In this Senior Policy Analyst Lindsey Burke recounts the academic gains made by

students who escape failing public schools, during a Jan. 26 event marking Geer Chas Photo: cradle of the 1960s civil rights movement, speakers National School Choice Week. including former Education Secretary Rod Paige and Our spring 2011 interns gather in the Allison Foyer with Heritage President Edwin Feulner and staff of the Young Leaders Program. Heritage Visiting Fellow Virginia Walden Ford cast a national curriculum via the backdoor route of waiving school choice as today’s most pressing civil rights issue performance goals for states that agreed to adopt federally and the best hope for inner-city children to break free of established “core curriculum requirements.” In December, Sharing the Dream… and Passing It On poverty and live the American Dream. Senior Policy Analyst Lindsey Burke debated advocates of “Without a heritage, every generation starts over.” Heritage fought for less federal meddling in education, a national core curriculum before the American Legislative exposing the Obama administration’s attempt to impose Exchange Council (ALEC), an organization of conservative he Heritage Foundation takes that motto to heart. control fast. We also sponsored lectures for college state lawmakers. Her arguments inspired ALEC’s That’s why we continuously seek the best and students on 47 campuses in 20 states and continued education committee to draft model legislation to help free brightest conservative college students to spend our popular series of video Web-chats (Virtual Think Education Made Simple T states from agreements to adopt national standards. a semester interning with us in Washington. Here, they Tanks) through Facebook, featuring all 10 Leadership When Sen. Tom Harkin (D-Iowa) sought to reauthorize learn about the principles of conservatism and the ins- for America initiatives. the Elementary and Secondary Education Act (ESEA) and-outs of public policy research from leading experts. On Capitol Hill, 270 junior staffers attended our weekly and burden local schools with an additional 400 pages We welcomed 57 interns in our spring program, 68 in the Heritage Congressional Fellowship sessions. By year’s of federal regulations, Heritage explained this folly in summer session, and 59 in the fall, for a year’s total of 184. end, 34 had completed the entire course of study. We also research papers and Hill briefings. And once Heritage And Heritage interns never had it so good. Seven years of added 36 new fellows to our James Madison Fellowship Action for America joined the fight, the bid to expand service accommodating 1,365 residents had left our intern program for senior Hill staff in 2011. Both programs focus federal control over local schools fizzled. apartments a bit worn around the edges in 2010. But our on instilling today’s rising political stars with the same Answering the endless demand for higher teacher 2011 class of interns happily occupied freshly refurbished principles that animated our nation’s Founders. salaries, our Center for Data Analysis crunched the rooms with new lighting, carpet, paint and furniture. As the new conservative members of the 112th Con- numbers to reveal that teachers are not “woefully Our Young Leaders Program (YLP) briefed 73 visiting gress rolled into town, our Job Bank screened more Heritage produced four “Education Made Simple” underpaid,” as Education Secretary Arne Duncan claims. groups of young people about conservative principles than 2,000 resumes, identified some 450 candidates videos, each addressing a key area of education policy: Rather, their amazingly generous benefits leave public and Heritage’s Leadership for America policy initiatives. for Capitol Hill positions, and distributed resumes to unionization, spending, national standards and school school teachers far better compensated than similarly Expanding our outreach to young professionals, YLP attendees at Heritage’s New Member Orientation. Job choice. Capitol Hill staffers and state think tanks are skilled private-sector workers. The research made hosted “Debt Paying Generation” events in North Bank candidates—conservatives all—subsequently land- using the videos to promote conservative reforms to headlines in USA Today and The Wall Street Journal. Carolina, Ohio and Pennsylvania. These explained ed 130 Capitol Hill positions ranging from Chief of Staff the education system. It also brought howls of protest—but no fact-based the fiscal train wreck awaiting the next generation to Staff Assistant. We also provided resumes to six newly rebuttals—from the teachers’ unions. unless Washington gets its spending compulsion under elected Governors.

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2011 Named Interns Fellows: Distinguished Distinguished Fellows David King Interns Samuel L. Westerman Interns Dreamers and Doers of The Heritage Quinn Bongers, Northwestern University Kyle Rusciano, Yale University Foundation Laura Stanley, James Madison University Christopher Kloster, Washington and Lee University Stuart M. Butler, Ph.D. Pedro and Ann Wasmer Interns The Hamilton Roddis Foundation Interns Distinguished Fellow and Director, Tomas Bethencourt, The Catholic University of America Harris Swayze, Mississippi College Center for Policy Innovation Andres Celedon, Georgia Institute of Technology Christopher Adcock, University of Kentucky Johan Perez, Santa Maria University Travis Tipton, Vanderbilt University Elaine Chao Claire Leatherwood, Yale University Distinguished Fellow The Ray Foundation Interns Tanner McNeill, University of Southern California Edward Walton, Wake Forest University Charles Morrison, Tufts University Lee Edwards, Ph.D. Daniel Riner, Florida State University Distinguished Fellow in Allison Fick, University of Florida The Nicholson Family Interns Dorothy Williams, Grove City College Conservative Thought

The H.N. and Frances C. Berger Foundation Brooks Spears, Hillsdale College Photography Face to Face Photos: Interns Patrick Knudsen Kumi Yokoe Ernest Istook Distinguished Fellow Brittany Cobb, Emory University Glenn Hall Interns e welcomed two new fel- Senior Visiting Fellow in our Asian Zachary Enos, Patrick Henry College Cody Moran, Azusa Pacific University lows during 2011. Patrick Studies Center. One of Japan’s leading Edwin Meese III Jennifer Gieselman, University of South Dakota Nicholas Bruno, Houston Baptist University Knudsen joined us in Au- authorities on the United States, Yo- Anatoliy Khomenko, Washington and Lee University W Ronald Reagan Distinguished Jordan Saunders Intern gust as our Grover M. Hermann Senior koe has analyzed Japanese politics on Kevin Reagan, The George Washington University Fellow in Federal Budgetary Affairs. CNN and BBC. She has also worked as Fellow in Public Policy and Sterling Beard, Dartmouth College Alyene Senger, Kent State University It’s familiar turf for Knudsen, who a political consultant for private busi- Chairman, Center for Legal and Guido and Sue Pichini Intern spent 20 years on the staff of the House nesses. Yokoe has written 10 books on Judicial Studies Budget Committee. Prior to that, he U.S. politics, including one on the role L.C. Baxter, Arizona State University Heritage recognizes the following members who Jim Talent have named intern positions for 2012 and beyond: worked as a newspaper reporter and of American think tanks. She holds a The Robert S. and Janet L. Miller Family editorial writer. Ph.D. in policy science from Chiba Uni- Distinguished Fellow Foundation Intern Mrs. Erma Jean Tracy Kumi Yokoe joined us in June as versity of Commerce near Tokyo. Meera Yogesh, University of Tennessee at Martin Mary H. Campbell Foundation Kevin Kline Intern Pilgrim Foundation Named Fellows of The Heritage Foundation William Dawkins, Southern Methodist University Col. Charles B. and Sally G. Stevenson Margaret Thatcher Senior Research Fellow Marilyn and Fred Guardabassi Fellow in Media Ted R. Bromund, Ph.D. and Public Policy Studies Kenneth McIntyre Chung Ju-Yung Fellow for Policy Studies Peter Brookes Mark A. Kolokotrones Fellow in Economic Freedom Ambassador Terry Miller David L. Coffey Fellow in Government Studies Danielle Doane Jay Van Andel Senior Analyst in Trade Policy Bryan Riley Norman B. Ture Senior Fellow in the Economics of Fiscal Policy Jay Kingham Fellow in International J.D. Foster, Ph.D. Regulatory Affairs Heritage interns join Brett D. Schaefer other guests in the Bernard and Barbara Lomas Fellow Allison Foyer to hear Steven Groves F.M. Kirby Research Fellow in National Security Policy commentator Ann Baker Spring Coulter discuss her Grover M. Hermann Fellow in Federal Budgetary book “Demonic.” Affairs Herbert and Joyce Morgan Senior Research Fellow Next to the author: Patrick Louis Knudsen Ronald D. Utt, Ph.D. Vice President of Communications Ronald Reagan Distinguished Fellow in Public Policy William E. Simon Fellow in Religion and a Free Society

Michael Gonzalez. Photography face to Face Photo: Edwin Meese III Ryan T. Anderson (named in 2012)

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Heritage Action in Action Hard Times Demand a Tough Scorecard Created in 2010 to push for principled legislative action addressing our Old Bulls in Congress are skilled at gaming the system, casting throwaway votes on inconsequential legislation so they can appear to be more conservative than they are. Heritage Action developed a new kind of Legislative Scorecard that nation’s most critical problems, Heritage Action for America emerged as the cuts through the gamesmanship and holds members fully accountable. tough new kid on the congressional block. Monitoring their votes on bills that will—or could—make a real difference, Heritage rom the overarching issue of excessive spending When the 112th Congress convened in January, Action rates lawmakers on the extent to which they uphold and debt to narrower issues like energy subsidies Heritage Action rallied lawmakers around full repeal of conservative policies. Other conservative organizations score only and trade, Heritage Action—an independent, 501 Obamacare. One of the first acts of the House was to pass final up-or-down votes. The Heritage Action Scorecard scores a F wider range of votes—often early procedural or amending votes (c)(4) advocacy group—aggressively advanced the Heri- a repeal bill, 245-189. Subsequently, repeal became the tage policy vision. Along the way, it ruffled some feathers position of every GOP presidential candidate. that determine whether a bill will or will not be worth passing. As a among a Washington establishment still reluctant to dis- On federal spending, we pushed lawmakers to honor result, some members used to receiving sky-high ratings from other pense the strong medicine needed to cure our country’s their Pledge to America and roll back non-defense discre- conservative organizations were disappointed when they saw their problems. But by year’s end, it was clear: Heritage Action tionary spending to 2008 levels. Though we didn’t get quite far more down-to-earth, no-gamesmanship ratings from Heritage got action. that far, we succeeded in gaining more cuts, allowing Budget Action. Committee Chairman Paul While Heritage Action has no desire to “rile up” our allies, it has Ryan to propose a budget every intention of creating pressure so conservative- even bolder than originally leaning members don’t fold on the tough votes. planned. Initially propos- As Heritage Action’s Chief Operating ing $30 billion in cuts, light Officer Tim Chapman explained to the from Heritage research Washington Examiner: “Our scorecard combined with heat from is certainly tough. But we believe it is fair Heritage Action convinced and, just as important, very revealing with respect the committee to raise the to how members vote on issues both big and small. Our ante to $61 billion in cuts. objective is to continue to provide constructive pressure from the In the summer battle right in order to promote conservative ideas.” over raising the debt ceil- ing, we insisted that any If its first full year of operation is any measure, Heritage Action is clearly up to the job. increase be accompanied by significant spending cuts and reforms to the When sorely needed free-trade agreements at last budget process. Through- came before Congress, Heritage Action succeeded in out the debt deal and sub- beating back proposed expansions in Trade Adjustment sequent naming of a “su- Assistance, paving the way for passage of free-trade per committee,” Heritage agreements with Colombia, Panama and South Korea. Action promoted Heri- The Law of the Sea Treaty (LOST) was high on the tage’s Saving the American administration’s wish list, yet the Senate refused to even Dream plan as the back- bring it up for consideration. Why? Because Heritage’s bone for serious reform. policy arguments against the pact were persuasive and Our ideas were supported because Heritage Action’s fierce opposition to the New by many congressional START treaty had forced the administration and its allies conservatives and even to expend so much political capital, they were unwilling to gained traction with spend more on LOST. some moderates. Robert Heritage Action joined 40 other groups to call on Rector’s welfare reform Congress to reject all proposals for new energy subsi- recommendations were dies. When a bipartisan group of lawmakers introduced introduced in both cham- the NAT GAS Act, Heritage Action patiently explained bers, and bipartisan Medi- why tax subsidies for natural gas vehicles would only care reform incorporating distort energy markets while benefiting a politically Photo: Chas Geer Chas Photo: Photo: Ashe Schow Ashe Photo: At a May 13 Capitol Hill press conference, Heritage Action for America CEO Michael Needham praises a bill our plan’s principles was favored few. Bill sponsors soon began jumping ship. By After providing an update of what’s happening on Capitol Hill, Jessica Ander- to end all energy subsidies. Joining him are bill co-sponsors Rep. Mike Pompeo, R-Kan., and (obscured) Rep. slated for introduction in year’s end, 19 members had removed their names from son, Deputy Political Director of Heritage Action for America, learns what’s Raul Labrador, R-Idaho. early 2012. the bill—a Capitol Hill record. on member Gordon Crawford’s mind at the Oct. 14 President’s Club meeting.

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as well, keep in touch with Heritage Heritage Members and Friends—Determined to through a variety of channels: Membership Levels and Benefits n Our main website, heritage.org, Heritage welcomed nearly 100,000 new members last year. Our range of Save the American Dream welcomed more than 9.6 million membership levels and benefits can accommodate all. visitors during 2011. Heritage is its people, and in 2011 we gladly welcomed nearly 100,000 new members n MyHeritage.org attracted more Level Starting at into our family. Thanks to their commitment, we remain far and away the most widely than 676,000 visitors. Basic $25 supported think tank in America, with some 700,000 active members. n The Foundry, our blog, drew 6.1 Patriots Club $100 million visitors—a 15% increase. Young President’s Club $250 n Morning Bell, our daily wake-up rom Seattle to Naples, from President’s Club $1,000 e-newsletter, saw subscriptions Southern California to New Executive Committee $2,500 York, from Pittsburgh to soar to a record 225,000. F n Our Facebook “friends” roster Premier President’s Club $5,000 Houston to Chicago, we hosted more than 35 events in 26 cities. Speakers reached 400,000… and kept Associate $10,000 included such leaders as Donald right on growing. Executive Associate $25,000 n The ranks of our Twitter Rumsfeld, Fred Barnes, Dinesh Premier Associate $50,000 D’Souza, Victor Davis Hanson, followers swelled to 162,000. n Founder $100,000 Steve Moore, Karl Rove, Sean Heritage Libertad, our Spanish- Trustees’ Circle $500,000 Hannity, Dan Henninger, Wisconsin language website, drew more Gov. Scott Walker and Gen. Peter than 80,000 visitors, and won Chairman’s Circle $1,000,000 Pace—and, of course, Heritage 1,000 plus Facebook friends and For details on the benefits attached to each level, please call experts such as Michael Franc, 1,000 plus Twitter followers in (800) 546-2843 or visit MyHeritage.org. Stuart Butler, Matthew Spalding and the bargain. Distinguished Fellows Jim Talent and John Shadegg. Thank You for Your Leadership Through these meetings we also Five years into our Leadership for America Campaign, Heritage members have contributed gifts, pledges and encouraged thousands of local lead- commitments totaling more than $446 million.

ers to wade into the public debate Inc. Photography McMinn Michelle Photo: and promote the conservative cause. Heritage Founder Russell D. Phelon asks a question at our Annual Leadership Conference and Board We’d like to recognize, here, the extraordinary generosity of those donors who have made contributions and Those leaders, and a good many others Meeting, held last April at the Four Seasons Resort in Palm Beach, Fla. commitments totaling $1 million or more, including: Allegheny Foundation Dr. John C. Hagan III, M.D. Estate of Joseph A. Prestele Mr. and Mrs. Douglas F. Allison Mr. and Mrs. Henry E. Haller Jr. Estate of Hans G. Rieger Where Heritage Hosted Member Events in 2011: Mr. Stuart I. Anderson Hanwha Group Estate of Warren R. Rothwell n Atlanta, GA n Nashville, TN Mr. and Mrs. Robert R. Aune Mr. Robert F. Hartsook Mr. and Mrs. John H. Rumpel n California n New York, NY Mr. Cloyce K. Avey The Grover Hermann Foundation Mr. and Mrs. Thomas A. Saunders III Dana Point Mrs. Constance Blum Howard Charitable Foundation Mr. Richard M. Scaife n North Carolina Huntington Beach Mr. and Mrs. Wayne F. Brady Estate of Stanley E. Huffman Sarah Scaife Foundation Chapel Hill San Francisco Mrs. Carole B. Brown Mr. John C. Huntington Mr. and Mrs. Mark Selko Charlotte Mr. and Mrs. David W. Caldwel Mrs. Ruth Hyde Mr. and Mrs. Greg Sheehan n Chicago, IL n Omaha, NE The CHEAR Foundation Mr. and Mrs. Jerome Johnson Dr. Jeffrey B. Shellan, Ph.D. n Cincinnati, OH Mr. and Mrs. David L. Coffey Claude R. Lambe Charitable Foundation Estate of S. Harrow Smith n Pittsburgh, PA n Denver, CO Mr. and Mrs. Stephen Combs Mr. Ronald Lazof Estate of Lenore J. Stein n Seattle, WA The Richard and Helen DeVos Mr. and Mrs. James Lister Mr. Joseph D. Sullivan n Florida n St. Louis, MO Foundation Mr. and Mrs. Robert W. Mair Mr. and Mrs. Brian S. Tracy Naples Mr. and Mrs. Rick Gaby Mr. and Mrs. Jim E. McAlister Mr. Robert J. Ulrich n Palm Beach Texas Mrs. Gail Garbin Mr. and Mrs. W. Barry Moore Mr. Curt Von Wooster Dallas n Michigan Mr. and Mrs. E. W. Gilbertson Mr. Herbert N. Morgan Dr. and Mrs. Leo G. Watson Houston Mr. John D. Gottlick Photo: KPO Photo KPO Photo: Birmingham M. J. Murdock Charitable Trust Mrs. Marion G. Wells Mr. and Mrs. William Grewcock Heritage members greet House Majority Leader Eric Cantor, R-Va., at a Nov. 21 Jackson n Washington, DC Mr. and Mrs. Robert C. Odle Jr. gathering in Charlotte, N.C. Background: Heritage Senior Advisor for Special Mr. and Mrs. Norman G. Gunther Estate of Billie Pirnie Eight members have asked to n n West Des Moines, IA Projects Doug Stamps. Minneapolis, MN Mr. and Mrs. John Raymond Haesler Estate of Doris A. Pistole remain anonymous.

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Preserving the Dream: The Heritage Legacy Society In writing the Constitution, America’s Founders were consciously establishing a legacy for future generations. 2011 Financial Statements Their explicit purpose, stated in the Preamble, was to “secure the blessing of liberty to ourselves and our posterity.” STATEMENT OF FINANCIAL POSITION* STATEMENT OF ACTIVITIES* Today, members of the Heritage Legacy Society share the Founders’ noble concern for future generations. Co- As of December 31, 2011 Year ended December 31, 2011 chaired by Rae and Belden Bell of Marshall, Va., and Marion Wells of Ft. Lauderdale, Fla., the Legacy Society gratefully thanks the following 219 members who made commitments through their estate or other planned gifts in 2011. ASSETS: OPERATING REVENUES Cash & cash equivalents $ 3,494,032 Contributions: Mr. Walter Adomkus Mr. Michael E. Giobbe, Jr. Capt. Randolph “Rocco” LCDR John R. Savory USN Mr. John M. Supino Ronald C. Allison, M.D. Mr. Deane S. Glen McLaughlin, USAF Ret. (Ret.) Ms. Mary G. Swartz Receivables 7,701,143 Individuals $ 58,216,660 Mr. and Mrs. Christopher M. Mr. Clarence D. Glover Mr. Ronald L. Mercer Mr. Paul Schmidt Mr. and Mrs. Donald Tashner Prepayments & other assets 1,697,156 Foundations 12,460,227 Appleby Mr. and Mrs. Marvin H. Mr. and Mrs. Richard A. CAPT Raymond P. Schmidt Mr. and Mrs. W. Rich Terry Mrs. Margaret Yates Ashcraft Goehring Meyer Mr. and Mrs. Steven Schmitt Ms. Lisa K. Tesarik Total current assets 12,892,331 Corporations 3,183,377 Mr. Vern Ashcroft Mr. and Mrs. Charles Wayne Mr. James A. Middleton Mr. Arnold A. Schneider Mr. Iype Tharian Total operating contributions 73,860,264 Ms. Jonna Augustine Gregg, Sr. Ms. Dae Miller Mr. Martin Scott Mrs. Lillie Tonkin Investments 110,607,679 Mr. and Mrs. Howard Avil Mr. and Mrs. Jerry Grossman Mr. and Mrs. Albert J. Miller Ms. Martha Sewell Mr. and Mrs. Dale Twining Investment withdrawal 4,517,000 Mr. and Mrs. Donald J. Ball Ms. Marianne U. Gustafson Miss Ruth C. Miller Major John R. Singleton Mr. and Mrs. R. Pete Vann Receivables, net 2,935,005 Mr. John Banks Program revenue 265,606 Mr. Raymund M. Haddock Ms. Nannette K. Moffett Mr. Ernest N. Smith Dr. Louise F. Wailus- Plant, property & equipment, net 49,402,214 Mr. Jerry Barbre Mr. and Mrs. Charles A. Ms. Katy Moss Mr. Larry Smith Suleiman Rental & other income 2,482,858 Mr. and Mrs. James Bartels Hadley Mrs. Janet L. Moulton Mr. Ronald G. Smith Mrs. Mary Wassi Other assets 444,145 Mr. John N. Bathurst Mr. Robert E. Hahn Mrs. Donna Munsey Mr. Edward Souders Mr. Thomas B. Watkins Total other operating income 7,265,464 Mr. Lynn K. Beck Total long-term assets 163,389,043 Mr. Lynn Hall Mr. and Mrs. Thomas Murff Mr. and Mrs. Norman K. Mrs. Patricia Weldon Mr. Glen A. Bihler Dr. William A. Hall Lorenzo Murguia, M.D. Sowards Mrs. Betty Wilbur TOTAL OPERATING REVENUE 81,125,728 Mr. Ralph W. Blackford Mr. and Mrs. Burrell Mr. and Mrs. John C. Murphy Mr. and Mrs. Chad Mr. Joseph H. Wilkens TOTAL ASSETS $ 176,281,374 Mr. John A. Blumgren Hammond Mr. and Mrs. George W. Speierman Mr. David Williams and Mrs. OPERATING EXPENSES Mrs. Jean Bock Mrs. Cecilia V. Hanes Neiiendam Dr. Edwin C. Spencer Marie Martino LIABILITIES & NET ASSETS: Program expense: Mr. Ira Breneman Mr. and Mrs. Gordon S. Mr. and Mrs. Devon Olson Mr. Edward H. Spiegelberg Ms. Virginia Williams Mr. and Mrs. Robert N. Hassing Mr. Joseph Oswald Dr. and Dr. Charles W. Mr. and Mrs. Jerold Willis Accounts payable & accrued expenses $ 9,615,477 Research 27,996,046 Broderick Mr. and Mrs. Robert Mr. James A. Palmer Stansfield Ms. Elaine Zaske Notes payable 3,442,622 Education 20,837,554 Ms. Martha H. Brooks Hathorne Rev. Dr. John Avery Palmer Ms. Ruth G. Stape Mr. and Mrs. Crist J. Brown Mr. John Heimkes and Mrs. Sherill Martinez Mr. Jerry A. Stebbins Seven Heritage Legacy Total current liabilities 13,058,099 Media & government relations 11,887,724 Society members wish to Mr. Gary Brown Dr. Mary A. Herron Mr. Jack Papin Mr. Damien F. Stella Total program expense 60,721,324 Mr. Kent M. Brown Mr. John L. Hessler Mr. Douglas H. Parrot Mr. and Mrs. Jack Stone remain anonymous. Mr. and Mrs. Alfred Buescher Mrs. Diana Dee Hewett Mr. and Mrs. William L. Notes payable 1,600,000 Mr. and Mrs. Donald T. Bush Mr. and Mrs. Patrick Holeva Pascoe Fundraising 16,366,404 With gratitude, we honor the memory of those Heritage Deferred obligations & planned gifts 16,219,748 Ms. Janet Camaras Mr. Donald H. Hubbs Mr. and Mrs. Robert W. Management & general 2,946,100 Mrs. Jessie J. Carlstedt Mr. Charles R. Huddleston Paulin Legacy Society members whose gifts we received in 2011: Total long-term liabilities 17,819,748 Total administrative expense 19,312,504 Mrs. Beverly T. Carter Mr. Lamont Hungershafer Mr. Alan Payne, Jr. Mrs. Lenore C. Anderson Mrs. Hazel Mordy G. L. Carter, Jr., Ph.D. Mr. R. K. Hunter Mr. John Peregrim TOTAL LIABILITIES 30,877,847 Mr. Charles E. Aylstock Mr. Warren K. Moyle TOTAL OPERATING EXPENSES 80,033,828 Mr. A. P. Cates Ms. Betty L. Hurle Mr. and Mrs. James A. Plute Mr. Thomas H. Berreman Ms. Dorothy Mullin Mrs. H. Colleen Cavanaugh Mr. G. William Hurley Mr. John S. Pollock Ms. Mary E. Biwer Mr. Rodney M. Norris Unrestricted net assets: NET GAIN FROM OPERATIONS 1,091,900 Mrs. A. Elaine Chandler Mr. Ernie Imken Mrs. Dawn H. Potter Mrs. Billie I. Bowles Mr. Lewis C. Parr Mr. Harold S. Chapman Board designated 91,414,120 Dr. Mary Sue Infante Mr. Aaron B. Powers Mr. T. Nash Broaddus Mr. and Mrs. John W. NON-OPERATING ACTIVITIES Mr. John H. Chiles Mr. W. R. Jackson, Jr. Mr. and Mrs. Jeff Powers Mr. Henry K. Brodersen Paulsen Undesignated 41,857,508 Mr. Fulton Chin Mr. Harry C. James Mr. Donald J. Pratt Restricted contributions 2,590,949 Mrs. Martha Brown Mr. Lawrence H. Peterson Mr. and Mrs. C. Michael Mr. David R. Jaynes Mrs. Grace E. Previto Temporarily restricted net assets 10,731,899 Mrs. Renee Campbell Mrs. Billie Pirnie Change in restricted net assets (10,018,525) Cisson Mr. Terrence Jenkins Mrs. Grady Price Mr. and Mrs. Marval L. Cazer Mrs. Doris A. Pistole Permanently restricted net assets 1,400,000 Mrs. Judith Courter Mr. Arnold H. Johnson Ms. Ann Prothro Net unrealized investment losses (8,563,476) Mrs. Erma Christensen Ms. Ashley V. Proctor Mr. Robert Craig Mr. and Mrs. Robert C. Mr. Brian M. Queen Total net assets 145,403,527 Investment withdrawal (4,517,000) Ms. Josephine Comodo Mr. Mercer Rhodes Mrs. Gay Cummings Johnson Mr. and Mrs. Dick J. Randall TOTAL NON-OPERATING ACTIVITIES (20,508,052) Mr. Gerald E. Curry Mr. Johnie F. Jones Mr. and Mrs. Manson Reedal Ms. Marie Comodo Mr. Hans G. Rieger Mr. John Kail Crane Mrs. Barbara Small Riester TOTAL LIABILITIES & NET ASSETS $ 176,281,374 Mr. and Mrs. James Dawson Ms. June Kahrer Mr. and Mrs. Dan Regis DECREASE IN NET ASSETS (19,416,151) Mrs. Norma S. De Paiva Barbara Kastner Mr. and Mrs. Philip Rewerts Mr. Henry Eichholz Mr. Warren R. Rothwell Mr. James M. Deaver Mr. Michael Keisacker Mr. John Mike Rice Mr. and Mrs. James R. Evans Mr. Martin J. Schwager NET ASSETS- Beginning of year 164,819,678 Mr. Allan B. DeMille Mr. Thomas M. Knepper Mr. Ed Richter Mr. Harry Fischer Mrs. Eva M. Sewall Mr. Ervin A. Derda Mr. Marvin C. Koeper Mrs. Josephine Ricketts Mrs. Jennie B. Gardner Mr. and Mrs. Stephen H. 2011 Operating Revenue NET ASSETS-End of year $ 145,403,527 Mrs. Virginia Dickerson Mr. Thomas E. La Clair Mr. Gerald F. Riseley Dr. Frederick B. Greene Smith Dr. and Mrs. Alan H. Domina Ms. Patricia Lambert Mrs. Carolyn J. Ritchie Ms. Doris Hales Mrs. W. Quentin Smith Mrs. Joanne H. Duke Ms. Geraldine Lawless Mr. and Mrs. Charles H. Ms. Debra Hall Mr. Myron D. Stepath Program Revenue 2011 Operating Expense Mr. James Eller Mrs. Carol A. Lerch Robinson Mrs. Rose E. Henry Mr. and Mrs. Edward P. Ms. Virginia A. Fairfield Dr. Margaret A. Lessig Mr. Benjamin F. Rogers, Jr. Mr. George L. Hesse Stuart & Other Income Management Mr. Joseph J. Famularo Mr. L. S. Liles Ms. Diann Ronald-Szabo Mr. Joe Huskins Mr. John Gordon Studebaker 8% Mr. Homer Fassett Mr. Donald L. Lilly Ms. Carolyn G. Roshong Mrs. Russell Ingraham Ms. Christina F. & General Fundraising Mr. Gary L. Finley Mr. Thomas F. Linnen Mr. and Mrs. Mark Rostvold Mr. John L. Greene Vanderwende 4% 20% Mr. Charles W. Fischer, Jr. Mrs. Maxine V. Loper Mr. W. F. Ruzicka Mr. and Mrs. Lloyd Kildoo Mr. and Mrs. Charles W. Mr. John R. Fisk Mr. and Mrs. Wayne B. Lowell Mrs. Alma J. Ryan Mr. Theodore Konis Walton Mrs. Mary Lou Frenzel Mr. Charles Lyford Mr. and Mrs. Sheldon Sacks Mrs. Ann W. LaFontaine Mr. Randall Warren Contributions Programs Mr. Ernest Gajdusek Mrs. Marie G. MacGregor Mr. Peter M. Saint Germain Mr. James C. Lamkin Mr. Wilfred L. Was II 91% Mr. Everett C. Garrett Mr. Robert D. Martz Mrs. Mary Salvo Mr. Carl R. Lezius Mr. John H. Watrous 76% Ms. Virginia M. Gibson Mr. and Mrs. Marty Mr. and Mrs. Lyle Sandberg Mr. Ray E. McGowan Mrs. Marjorie Wellington Mrs. Betty Anne Spruill Matousek John C. Sandefur, M.D. Mr. Joseph J. Miller Ms. June T. Weston Gillingham Mrs. Nancy McDonald Mrs. Peter Moore Mrs. Marian White

NOTE: Some donor listings on these pages reflect combined contributions to both The Heritage Foundation and Heritage Action for America. *Preliminary results - final audited financial statements will be available on or after July 31, 2012.

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Ms. Elizabeth Benedict Cole PhRMA Mr. J. Allen Baird Mr. Edward A. Clark 2011 Heritage Foundation Founders Douglas and Maria DeVos Foundation Mr. and Mrs. Gary L. Pilgrim Mr. B. J. Baker Mr. James McConnell Clark Herbert H. and Barbara C. Dow Mr. and Mrs. James A. Plute Mr. Peter Barrett The George E. Coleman, Jr. Foundation The Armstrong Foundation Mr. and Mrs. William Grewcock Mr. and Mrs. Robert V. Pennington Chairman’s Circle Foundation Mrs. Grace E. Previto Mr. Art Barter Mr. James A. Collins Mr. and Mrs. Stephen M. Barney The Grover Hermann Foundation The Robert S. & Star Pepper Foundation The Richard and Helen DeVos Foundation Mrs. Joanne H. Duke Mr. Bruce Rastetter Mr. and Mrs. Ron Baukol Comcast Corporation Mr. and Mrs. Rick Gaby Barney Family Foundation Mr. and Mrs. Harry P. Keegan III Mr. Russell D. Phelon Mr. Robert G. Engman Mr. and Mrs. Christopher M. Reid Mrs. Jane Varner Beard Mr. and Mrs. George Conrades Hanwha Group Mr. and Mrs. J. Bayard Boyle, Jr. Mr. and Mrs. Michael L. Keiser Mr. and Mrs. Dick J. Randall Erickson Family Charitable Patrice Richardson, M.D. Mr. and Mrs. George Beck Consumer Electronics Association Howard Charitable Foundation Mr. and Mrs. Alfred Buescher F.M. Kirby Foundation, Inc. Mrs. Carolyn J. Ritchie Foundation Mr. and Mrs. John Rivard Benwood Foundation Mr. and Mrs. Gerald A. Cook Mr. and Mrs. Ronald Lazof Mr. and Mrs. Bailey F. Campbell Mr. Mark Kolokotrones The Roe Foundation Mr. Robert J. Bertch Mr. and Mrs. Robert A. Cook Mr. Herbert N. Morgan Mr. and Mrs. Jack E. Caveney Mr. Thomas E. La Clair Searle Freedom Trust Fairchild-Martindale Foundation The Joyce and Donald Rumsfeld Mr. Nicholas Bez Corporate Press Sarah Scaife Foundation Mr. and Mrs. David L. Coffey The Lehrman Institute B.K. Simon Family Charitable Foundation Mr. B. E. Faulkner Foundation Mr. and Mrs. Thomas W. Colbert, Sr. Mr. and Mrs. Robert W. Mair Mr. Larry H. Smead William Howard Flowers, Jr. Mrs. Mary Salvo Bialkin Family Foundation, Inc. Mr. and Mrs. Gary Coughlan Trustee’s Circle Mr. and Mrs. Leo W. Cook Mr. and Mrs. Gregg Mamikunian Sorenson Legacy Foundation Foundation, Inc. Satter Foundation Mrs. Betty L. Blake Mr. George W. Cowan Mr. and Mrs. Howard Avil Adolph Coors Foundation Mr. and Mrs. George L. Mayer The Thirteen Foundation Mrs. Mary Lou Frenzel Strong Foundation Trust Mr. Ronald Boone Mr. and Mrs. Garland Cox The CHEAR Foundation Donahue Family Foundation, Inc. Capt. Randolph “Rocco” McLaughlin, Mrs. Erma Jean Tracy Mr. and Ms. Tracy Fu Sunmark Foundation The Louis L. Borick Foundation Mr. and Mrs. Gilbert C. Cox, Jr. Mr. and Mrs. Thomas A. Saunders III Free Enterprise America USAF Ret. Mr. and Mrs. Richard E. Uihlein Genworth Financial Mr. and Mrs. Kermit S. Sutton Mr. Mike Boylan Dr. James A. Crabtree Lillian S. Wells Foundation Mr. and Mrs. John W. Galbraith Mr. and Mrs. Robert S. Miller Mr. Robert J. Ulrich Mr. Michael E. Giobbe, Jr. Mr. and Mrs. Gary L. Swenson Mr. and Mrs. Richard S. Braddock The Crail Foundation Founders General Electric Company The Morgan Family Trust Mrs. Marion G. Wells Mr. and Mrs. Jerome Green The Sidney A. Swensrud Foundation Mr. and Mrs. Theodore Brickman Mr. Michael F. Cronin Aequus Institute General Mills M. J. Murdock Charitable Trust Mr. R. B. Zinser Mr. and Mrs. Jerry Grossman Taiwan Foundation for Democracy Ms. Susan Bridges Mrs. Gay Cummings Gleason Family Foundation Mr. and Mrs. Joe P. Murphy Amway Mr. and Mrs. Harold E. Hamilton Mr. and Mrs. Raymon F. Thompson Briggs & Stratton Corporation Mr. William R. Dahlgren Google, Inc. The Frederick and Julia Nonneman 15 Founders have asked to Mr. and Mrs. William L. Amos, Jr. Mr. Charles H. Hoeflich Triad Foundation Inc. Foundation, Inc. Mrs. Jason S. Damron Mr. and Mrs. Leo G. Graham Foundation remain anonymous. The Anschutz Foundation Mr. William H. Holden United Parcel Service Dr. and Mrs. Bart J. Broadman Mr. and Mrs. Paul L. Davis, Jr. Home Depot Mr. and Mrs. Wallace E. Volwiler Ms. Gretchen Brooks John R. and M. Margrite Davis Foundation Ms. Martha H. Brooks Daniel and Pamella DeVos Foundation Issa Family Foundation Count and Countess Ferdinand von Galen Mr. Roger G. Brooks, Sr. Dick and Betsy DeVos Foundation 2011 Heritage Foundation Associates Mr. and Ms. Michael Jude Mr. and Mrs. Russell Wicks Mr. and Mrs. Craig R. Brown Gladys M. Dickson Charitable Trust Mr. Christopher Damon Haig Raytheon Company Ms. Betty A. Anderlik The Karol Fund Mr. Joseph H. Wilkens Premier Associates Dr. and Mrs. David R. Brown Mr. and Mrs. Edward Dillon Mr. and Mrs. Clay W. Hamlin, III Hamilton Roddis Foundation Richard F. Aster, Jr. Foundation Mr. David A. King Mr. Donald M. Wilkinson Mr. and Mrs. Edward M Ackerman Dr. Robert W. Browne Dodge Jones Foundation Mr. and Mrs. Burrell Hammond Mr. Eugene H. Roos Mr. and Mrs. Robert R. Aune Mr. Gerald M. Kirke Dr. and Mrs. Charles J. Willey Mr. and Mrs. Douglas F. Allison Mr. and Mrs. John Bruning Mrs. Joyce H. Doty Mr. and Mrs. John Nils Hanson The AWC Family Foundation Koch Companies Public Sector, LLC Mr. Randy Winegard Ms. Barbara Anderson Mr. Tony J. Saliba, Sr. Mr. Daniel W. Bunn Mr. and Mrs. Robert W. Drinkward The Fred A. Lennon Charitable Trust Mr. Keith C. Wold, Jr. Banbury Fund Hertog Foundation Saliba Family Charitable Foundation Mr. and Mrs. Glen H. Ballowe Mr. and Mrs. David Burckel Mrs. Vivian N. DuBose Mrs. Carol A. Lerch Mr. and Mrs. Donald H. Young Mr. John N. Bathurst Mr. K. William Hess Shamrock Foundation Mrs. Barbara Barrett Peter and Gloria (Sella) Burich Fund Mr. Kenneth D. Duggin Lockheed Martin Corp. Mr. and Mrs. Thomas R. Zucker The Boeing Company The Holman Foundation, Inc. The Starr Foundation Bell Charitable Foundation Mr. Mark A. Caldwell, Sr. Mr. James Dyer The Maclellan Foundation Inc. Mr. Paul Boyle The Karakin Foundation Stiles-Nicholson Foundation H.N. and Frances C. Berger Foundation Mrs. Gillian N. Callaghan Eagle Information Mapping, Inc. Mario Family Foundation The Lynde and Harry Bradley Foundation Mr. and Mrs. Robert H. Kellen Mr. Cameron Sutton Mrs. Jean Bock Associates Mr. James J. Callan Earhart Foundation Mr. J. Willard Marriott, Jr. G. L. Carter, Jr., Ph.D. Mr. Marvin C. Koeper Mr. and Mrs. Brian S. Tracy Mrs. Carole B. Brown Mr. David Joel Adams Mr. and Mrs. Stuart Campbell Mr. and Mrs. Robert J. Eaton Mr. and Mrs. Thomas L. McGrath Mr. and Mrs. Aubrey Chernick Mr. L. C. Martin, Jr. Mr. Michael S. Turner Miss Catherine M. Brown Mr. Michael Alberga Mr. and Mrs. Donald Carter Mr. and Mrs. Douglas C. Edman Mr. and Mrs. Miles Collier Ms. Nannette K. Moffett Mr. and Mrs. Jeff P. Van Dyke Mr. and Mrs. David W. Caldwell Mr. Greg McNece Mr. Gilbert F. Amelio Mr. and Mrs. Ronald L. Carter Mrs. Patty A. Edwards Donner Canadian Foundation Mr. and Mrs. Alan Orr Mr. and Mrs. R. Pete Vann Mr. and Mrs. Oliver T. Carr, Jr. Mr. and Mrs. Hal A. McVey American Foundation Mr. Richard Castiglia El Pomar Foundation (Colorado only) The William H. Donner Foundation, Inc. Dian Graves Owen Foundation Visa International Mrs. Beverly T. Carter Mr. James B. McWethy Mr. and Mrs. George Anderson Castleman Family Foundation Eli Lilly and Company Foundation Mr. and Mrs. William S. Edgerly Charles Maxfield and Gloria F. Parrish Mr. Richard Wells Cerner Corporation Mr. and Mrs. Michael T. Monahan Mr. and Mrs. Robert A. Anderson Mr. Robert Challey Mr. Robert W. Ellis ExxonMobil Foundation Mr. James A. West, Sr. Challenge Foundation The Morris Foundation Dr. and Mrs. Larry P. Arnn Ms. Gladys Choate, OFM Mr. and Mrs. John Endriz Mr. and Mrs. Marvin H. Goehring Mr. and Mrs. James A. Patterson Chevron Corporation Northrop Grumman Corporation Mr. and Mrs. Caesar A. Arredondo Dr. and Mrs. Armeane M. Choksi Mr. and Mrs. Marshall Evans Mr. and Mrs. Robert M. Gordon The Dr. P. Phillips Foundation Executive Associates Mr. Fulton Chin Lovett & Ruth Peters Foundation Mr. and Mrs. James J. Ascher Mr. Arthur Cinader Evenstad Family Foundation Gardner Grout Foundation John William Pope Foundation Mr. and Mrs. Charles H. Adler The Chisholm Foundation Philip Morris International Global Mr. William S. Atherton Civil Justice Reform Group Dr. and Mrs. Edwin J. Feulner Mrs. Dorothy Grove Mrs. Spelman Prentice Altria Client Services Mr. and Mrs. James H. Click, Jr. Services Inc. The Babcock and Wilcox Company Mr. Robert A. Clack Mr. Paul J. Fisher Photo: Gannon Visuals Gannon Photo: Photography Craighead Shealah Photo: Bohrer David Photo: Inc. Photography McMinn Michelle Photo: Heritage Executive Associate Bruce Rastetter Associate Member Greg Duncan likes what he hears at a June 17 event in Dana Point, Heritage Legacy Society Members Harry Hall (left) and David Rush Limbaugh and Wisconsin Gov. Scott Walker (right) make for a speaks at an Oct. 26 member event in Des Moines, Calif., featuring former Defense Secretary Donald Rumsfeld. Foreground: Heritage Regional Coffey enjoy a break during a Legacy Society seminar Sept. 12 in dynamic duo at the Palm Beach conference, as Linda Feulner follows Iowa, featuring Wisconsin Gov. Scott Walker. Manager DeEtte Jones. Washington. the April 8 exchange.

36 the heritage foundation 2011 ANNUAL REPORT 2011 ANNUAL REPORT the heritage foundation 37 Am e r i c a n Dr e a m Am e r i c a n Dr e a m

Mr. John J. Fitzgerald, Jr. Charitable Foundation Mr. David L. Liptak Mr. and Mrs. Todd S. Nicholson Mr. Robert E. Richardson Mr. and Mrs. Clifford L. Thomson Mrs. Sara B. Fleming Mr. James P. Hicks Mr. Leonard Litwin Mr. David W. Niemiec Mrs. Josephine Ricketts Mr. and Mrs. Larry Timmerman Honoring Donor Intent Mr. John C. Foxley Ms. Margaret M. Hill Dr. and Mrs. Bernard T. Lomas The Ed Noble Family Advised Fund Mr. Gerald F. Riseley Tippins Foundation Mr. John J. Frezza Mr. and Mrs. John L. Hillhouse, Jr. Mrs. Maxine V. Loper Dr. and Dr. John Nolte Rolls-Royce North America, Inc. Mr. and Mrs. Ronald Trzcinski When giving to any nonprofit organization, you should Mr. and Mrs. Philip M. Friedmann Mr. and Mrs. Edson P. Holland Mr. William Lowndes III Mr. Ralph Nordick Mr. Sheldon Rose Mr. and Mrs. Ron Tucker be able to count on three things: Dr. Roald Fuglestad, M.D. Mr. Gary D. Hoover Mr. and Mrs. Edward A. Lozick Mr. and Mrs. Donald J. Nores Mr. and Mrs. John B. Rothenberger Mr. J. Robert Tullis Mrs. Dulce M. Fuller Mr. and Mrs. Robert G. Horner Mrs. Marie G. MacGregor Mr. and Mrs. David Oates Mr. and Mrs. Stanford Rothschild Ed Uihlein Family Foundation n Your gift will be used to advance the organization’s Mr. Stanley E. Fulton Hufty Foundation Mr. Wallace D. Malone, Jr. Mr. and Mrs. Herman J. Obermayer Mr. Raymond Rowland, Jr. Mr. Calvin K. Upp Mr. J. James Gallagher The Huston Foundation Mr. Pierson G. Mapes Mr. Michael P. O’Brien Arthur N. Rupe Foundation Steve & Cindy Van Andel Foundation mission. The Garber Family Foundation Mr. Paul J. Isaac The Markkula Foundation Mr. and Mrs. Rod Odom Mr. Jerome D. Ryan Mr. John K. Vanier Mr. and Mrs. Roland E. Garlinghouse John E. and Sue M. Jackson MasterCard Worldwide Mr. Donald A. Oeters The Ryan Family Foundation Mr. and Mrs. Paul B. Venuto n Any restrictions you place on your gift will be Mr. Bob W. Garthwait, Jr. Charitable Trust Mr. George S. Maxwell Mr. A. M. O’Hare Mr. and Mrs. Sheldon Sacks Miss Lynn W. Via honored. Mr. and Mrs. J. Patrick Gavaghan Mr. Kurt R. Jaggers Mr. and Mrs. Ralph P. Mayer Mr. and Mrs. James H. O’Neal Mr. Charles H. Sanford and Ms. Linda A. Mr. James R. Voss Mr. Richard Geary Mr. Thomas P. Janas Mr. Walter McDonald Mr. and Mrs. James J. O’Neill Elliott Dr. and Mrs. Bill Wagner n You will to be treated with respect. Rollin M. Gerstacker Foundation Mr. Arnold H. Johnson Philip M. McKenna Foundation, Inc. Mr. San W. Orr, Jr. Mr. and Mrs. P. K. Schilling Mr. Andrew Robert Walden Mr. Henry A. Getz Mr. and Mrs. Charles B. Johnson Mr. Jim H. McManus, Jr. Mr. and Mrs. Robert Orscheln Dr. Joseph F. Schneider, Jr. Mr. Dale M. Walsh Unfortunately, many philanthropic organizations have Mr. and Mrs. Garnet A. Giles Mr. William H. Jones, Jr. Mr. and Mrs. C. Edward McVaney Orscheln Management Company Mr. and Mrs. Robert H. Schwarzmann Mr. Richard C. Walter Mr. Deane S. Glen Ms. Rebecca L. Julian Mr. and Mrs. Norman J. Metcalfe Mr. and Mrs. Darryle L. Owens Mr. and Mrs. Donald R. Scifres Ms. Ardis Walters broken faith with their donors. Mr. and Mrs. Tony Godfrey Kantner Foundation, Inc. Mr. and Mrs. Edward Michener Dr. and Mrs. K. Nicholas Pandelidis Mr. Douglas Scrivner Mr. and Mrs. Pedro E. Wasmer Pierre F. and Enid Goodrich Foundation Mrs. Barbara D. Kasler The Honorable and Mrs. J. William C.N. and Maria Papadopoulos Foundation Mr. William C. Shanley III Mr. Charles Reynolds Watkins At The Heritage Foundation, we regard your support Mr. Thomas S. Gordon John P. Kavooras Charitable Trust Middendorf II Mr. and Mrs. Douglas Parsons Mr. and Mrs. Greg Sheehan Katharine Audrey Webb Foundation as a trust. We hold ourselves strictly accountable Mr. John Grayson Mr. Harry P. Keegan IV Ms. Dae Miller Mr. and Mrs. William L. Pascoe Mr. and Mrs. Barry R. Shreiar The Weiler Foundation Mr. and Mrs. Terry Wayne Green Dr. and Mrs. Michael F. Kelley Mr. Harvey L. Miller Mr. Allen Pease Louis and Nellie Sieg Fund Mr. and Mrs. Ronald B. Weinel to you, and we pledge always to respect your The Albert M. and Lyda M. Green Ms. Neale W. Kempner Mr. and Mrs. Ted Millice Mrs. Fula Pelitti Mr. and Mrs. Harold Siegel Mr. Duane M. Weise philanthropic intent. Foundation Mr. and Mrs. Thomas L. Kempner Gerrish H. Milliken Foundation William Penn Foundation Mr. Thomas Siegel Mr. and Mrs. John D. Weiss Mr. Richard S. Griffith Kickapoo Springs Foundation Mr. and Mrs. Keith Mitchell, Jr. Mr. and Mrs. Henry Perry Mr. Willis B. Skillman Mr. and Mrs. Richard Weiss The sanctity of donor intent is explicitly stated in our Mr. and Mrs. Curtis Grina Dr. Manley W. Kilgore Mr. John W. Mitchell Mrs. Phyllis Peters Mr. Ernest N. Smith Mr. Stephen D. Weiss Mr. Daniel L. Guild Mr. and Mrs. Broadus H. King, Jr. Mr. Christopher S. Moody, Sr. Mr. and Mrs. Donald C. Peterson Mr. and Mrs. James Smith Mr. Ernie R. West Articles of Incorporation. It provides that, should any Ms. Marianne U. Gustafson Mr. and Mrs. Peter Kinnear Mr. Sam Moore Pfizer Inc. Mr. Owen R. Smith Samuel L. Westerman Foundation major donor desire a written contract clearly stating Mr. and Mrs. Ronald L. Haberkorn Mr. and Mrs. Donald H. Kirkland Mrs. Carol A. Morris Pilgrim Foundation Mr. Clark Smyth Ms. Jennifer L. Whitelaw Mr. and Mrs. Charles A. Hadley Mr. and Mrs. True H. Knowles Mortgage Insurance Companies of Dr. L. Harrison and Mrs. Janet Pillsbury Mr. and Mrs. Charles E. Spahr Mr. and Mrs. Paul H. Wick the purpose and intent of the donation and how it Henry E. Haller, Jr. Foundation Mr. and Mrs. Vincent Kolber America Mrs. Janice C. Pinkston Mr. J. C. Sparkman Mr. and Mrs. Andrew L. Wilson shall be spent, Heritage will gladly sign it. Moreover, The Hamill Foundation Mr. and Mrs. Kevin S. Kookogey Mr. James F. Mrazek The Honorable Jayne H. Plank Mr. R. Scott Spriggs Dr. Kent Wilson Mr. John S. Hamilton Mr. Richard T. Kotecki Mr. Ronald H. Muhlenkamp Mrs. Loretta Poindexter Dr. Charles W. Stansfield and Dr. Charlene Mr. and Mrs. James Wintersteen the president of Heritage is personally responsible for Miss Violet Hanna Mr. Frank W. Kozel Mr. Terence H. Murphree Mr. and Mrs. Allen B. Porter Rivera Mr. Frank E. Witt answering donor questions and reporting expenditures Mr. Robert F. Hartsook Mr. and Mrs. Richard Kozlowski Mrs. Suzanne P. Murphy Ms. Adrienne Price Ms. Diane J. Stites The Woodford Foundation Mrs. Joanne B. Hatcher Mr. Robert Lamb Murrill Foundation, Inc. Ms. Ann Prothro Mr. and Mrs. Steven Stockdale Mr. Richard B. Wright of donor funds. Mr. and Mrs. Robert Hathorne Legett Foundation MyWireless.org Mr. Andrew F. Puzder Mr. Joe Chat Sumner III Mr. and Mrs. Edward S. Young Mr. and Mrs. Jerry L. Hayden LeMans Corporation Mr. William J. Nasgovitz Mr. Vincent Mark Rafanelli Mr. John M. Supino Ms. Leslie Young As always, we make this pledge to you: When you Ms. Reta K. Haynes Mr. Edward C. Levy, Jr. Mr. L. C. Neely, Jr. Ms. Lillian Spang Rath Mr. Joseph Duane Swanson Ms. Elaine Zaske contribute to The Heritage Foundation, your intent as a Mr. and Mrs. Ron J. Hazlett Mr. and Mrs. Harold Levy The Negaunee Foundation Ray Foundation Mr. Robert Sydow C. J. Heilig Foundation Mr. and Mrs. John P. Lewis Mr. and Mrs. Peter C. Newell Mr. and Mrs. Charles D. Reite Tejon Exploration Company donor is never forsaken, never forgotten. The Herbold Foundation Dr. and Mrs. Robert T. Lewit, M.D. Mr. Van A. Nguyen Mr. Douglas M. Reiter Mr. and Mrs. Jerry J. Tepper 51 Associates have asked to Albert and Ethel Herzstein Mr. and Mrs. Ed D. Ligon, Jr. Mr. and Mrs. Bruce S. Nicholas Mr. Paul M. Resnick Mr. and Mrs. Ronald Tesarik remain anonymous.

Executive Associate Member Barbara Barrett, former U.S. Ambassador to Finland, chats with Karl Rove, former White House strategist, at a Nov. 14 Heritage event in Scottsdale, Ariz.

Heritage Founders Michael and Jennifer Gleba take in the Palm Photo: Michelle McMinn Photography Inc. Photography McMinn Michelle Photo: Photography Craighead Shealah Photo: Beach ocean view April Heritage Trustee Todd Herrick (left) shares a courtyard conversation Associate Members Kenneth and Grace Evenstad welcome former 8 during the Annual with Executive Associate Member Ferdinand von Galen at the Annual Defense Secretary Donald Rumsfeld (right) to their home in Naples, Fla., Leadership Conference

Leadership Conference and Board Meeting. for a Heritage event Nov. 9. Photography Draper Eric Photo: and Board Meeting. Inc. Photography McMinn Michelle Photo:

38 the heritage foundation 2011 ANNUAL REPORT 2011 ANNUAL REPORT the heritage foundation 39 Am e r i c a n Dr e a m

The Heritage Foundation Staff

Photo: Chas Geer Chas Photo: PRESIDENT’S OFFICE DOMESTIC AND William Poole Marvin Moon Sarah Ferguson Edwin Feulner ECONOMIC POLICY Jon Rodeback David Parker Christine Fogarty Derrick Morgan David Addington Karina Rollins Albert Potts Jessica Greer Kathleen Rowan Center for Data Analysis DISTINGUISHED FELLOWS Freida Warren Estefania Holler Robert Steele William Beach Elaine Chao Mariah Wenz Kristen Hoopes Missy Stephens Nahid Anaraki Lee Edwards Business Support Services Michelle Jehring Kenneth Sheffer Rea Hederman Ernest Istook Renault King Anne Judge EXECUTIVE VICE David Kreutzer John Shadegg George Adams Katherine Kraft PRESIDENT’S OFFICE John Ligon Jim Talent Berdie Carter Jacquelyn Monaghan Phillip Truluck David Muhlhausen Peter Murphy Tina Henry Amy Hart Jean Barry Guinevere Nell Eve Newell Anna Hui Uyen Hoang Jason Richwine Candace Porter Personnel Jinyoung Lee Matthew Hohman James Sherk Charlotte Schuyler Wesley Dyck Katie Smith Annette Keymist Patrick Tyrell Deon Moon Joseph Shattan Executive Vice Daniel Anastas LEADERSHIP FOR Aaron Thompson President Phil Truluck Matthew Adkins Center for Health AMERICA OPERATIONS GOVERNMENT STUDIES Mecca Turner Kristine Bramsen Policy Studies Michael Franc (right) greets Premier Genevieve Wood Samuel Walker Karen Cook Nina Owcharenko Christine Cheatum Dani Doane Nathaniel Ward President’s Club and Sean Doocey Edmund Haislmaier Laurie Craney Tierra Warren Photo: Michelle McMinn Photography Inc. Photography McMinn Michelle Photo: Heritage Legacy Society Alexander Eurich Kathryn Nix Creative Services Brian Darling Christopher Marcel Melissa Bluey James Dean Special Events Wisconsin Gov. Scott Walker, left, warms to his topic in a chat April Richard and Helen DeVos Member Rudolph Silc Becky Turco Elizabeth Brewer Elizabeth Hamrick Ann Bula 8 with Heritage Premier Associate Cameron Sutton at the Annual Center on Religion and Alex Harker Matthew Bagnoli at a President’s Club CENTER FOR POLICY Landon Zinda Civil Society Joseph Rusenko Brittany Balmer Leadership Conference and Board Meeting in Palm Beach. reception Oct. 12. INNOVATION INFORMATION TECHNOLOGY Jennifer Marshall Doug Sampson Ann Beckwith Stuart Butler Kiki Bradley Michael Spiller Janine Brown Bob Moffit Strategic Marketing Lindsey Burke Information Systems Diane Calmus Pamela Ouzts Keesha Bullock Collette Caprara Mark Harris Leslie Gahagan DAVIS INSTITUTE FOR Christine Kim Joe Brichacek Lauren Kuhn Pamela Hughes Kibreab Berhe INTERNATIONAL STUDIES Grace Melton Robert Carter Nate Lance Kim Holmes Leslie Merkle Joshua Shepherd Vinh Nguyen Steven Weyrich Jadon Ephraim Alexis Hurter Ryan Messmore Michele Palmer COMMUNICATIONS Jan Smith Robert Rector Strategic Operations Kimberly Schultz Michael Gonzalez Allison Center Rachel Sheffield Brian Blake Seth Spaulding Georgianna Nutt Heath Hall for Foreign Sarah Torre Ryan Townsend Laura Trueman Broadcast Services Policy Studies Thomas A. Roe Institute for Jessica LaHousse Online Communications Matthew Streit James Carafano Economic Policy Studies Timothy McGovern Judy Mayka EXTERNAL RELATIONS Michaela Bendikova Alison Fraser Jeph Christoff Sarah Mills Peter Brookes Romina Boccia Becky Norton Dunlop Martha Galante Israel Ortega Yvette Campos Curtis Dubay Robert Gordon Isabel Isidro Hannah Sternberg Ariel Cohen JD Foster Mary Larson James Lawruk Center for Media and Helle Dale James Gattuso Coalition Relations John O’Keefe Public Policy Mackenzie Eaglen Emily Goff Bridgett Wagner Steve Sharman Robert Bluey Owen Graham David John Alex Adrianson Maria Sousa Lachlan Markay James Phillips Diane Katz Lori Mashburn Roger Spurzem Morgan Roach Patrick Knudsen Ryan Nichols DEVELOPMENT Editorial Services Baker Spring Nick Loris Michael Rigas John Fogarty James Weidman Photo: Chas Geer Chas Photo: Photo: Chas Geer Chas Photo: Ray Walser Jack Spencer Paul Gallagher Lectures and Seminars John Von Kannon Jessica Zuckerman Ronald Utt Marguerite Higgins Executive Committee Members Mark and Betty Neerhof join forces Oct. 12 with Heritage Counselor Heritage Associate Dr. Charles Willey (right) John Hilboldt Christie Grennes Kenneth McIntyre Robert E. Russell, Jr. (far left), Vice President Genevieve Wood (second from right) and Assistant compares notes with Senior Research Fellow Asian Studies Center CENTER FOR LEGAL AND Adam Brickley Robert Hartsook Rachael Slobodien Walter Lohman JUDICAL STUDIES Andrew Parks Michelle Lancto Director of Major Gifts Steve DeBuhr (far right) at the President’s Club reception. Robert Moffit between President’s Club sessions. Dean Cheng Edwin Meese III Bernard Lomas David Weinberger Young Leaders Program Lisa Curtis Jason Snead Robert E. Russell Jr. Strategic Heather Pfitzenmaier Rebecca Graebner Communications Legal Center Angelise Schrader Major Gifts Elizabeth Hamrick Todd Gaziano Nick Reid Rory Cooper Bruce Klingner Robert Alt FINANCE AND OPERATIONS Anthony Campau Ericka Andersen Photo: Chas Geer Chas Photo: Derek Scissors Stephanie Bortner Ted Schelenski Jessica Dean Mike Brownfield Robert Warshaw Christine Carletta Joanne White Rebecca Eddy de Broekert Brandon Stewart Kumi Yokoe Elizabeth Garvey Accounting Steven DeBuhr Todd Thurman Nicholas Zahn Jessica Kline Vern McHargue JB Horton HERITAGE ACTION FOR Heritage Associate and Center for Paul Larkin Jr. Keith Capp DeEtte Chatterton Jones AMERICA Legacy Society Member International Charles Stimson James Gabele Richard McAdams Michael Needham Hans von Spakovsky Alyson Miller Sandy Mikilia George R. Brown (left) Trade and Timothy Chapman Economics AMERICAN STUDIES Sandra Noone Jay Rinehart Jessica Anderson has a word with Sen. Terry Miller Matthew Spalding Michele Pecora Leah Sammons Tripp Baird Charlotte Espinoza Mark Schreiber Doug Stamps Dustin Carmack Kelly Ayotte, R-N.H., Simon Center for Anthony Kim Edward Sharrer Jeffrey Trimbath Dwayne Carson after a President’s Principles and Politics Bryan Riley Daniel Holler David Azerrad Administration Heritage Legacy Society Club panel Oct. 13 also James Roberts Erin Kanoy Leslie Grimard Eric Korsvall Michael Barvick featuring economist Lisa Castellana Anna DeJarnette Jessica Martin

raphics: John Fleming Inc. G raphics: Graphics, rinting: Chroma Margaret Thatcher Michael Kelsey Joshua Robbins John Blundell (seated) Center for Freedom Emily Dunham Roxana Laing Julia Shaw Ashley Schow Nile Gardiner Kevin Germany Lori McNicoll and Kate O’Beirne Ashley Varndell Russ Vought

Photo: Chas Geer Chas Photo: Theodore Bromund Dorothy Hodo (background), President Research Editors Membership Programs & Nathanael Yellis Steven Groves Ebony Hunter Richard Odermatt Grant Development of the National Review Rep. Sean Duffy, R-Wis., and his wife, Rachel, flank Young President’s Sally McNamara Antonio Machenguer John Fleming Carsten Walter Institute. Erica Munkwitz Oscar Mendez-Cedillos Club members Brian and Chelsea Blackbird at a YPC breakfast Oct. 13. James Kidd Erin Bender (List current as of Brett Schaefer Maria Mendoza Amy Payne Gabriel Conger Dec. 31, 2011)

40 the heritage foundation 2011 ANNUAL REPORT P Flerlage D esign: Fred