For 23 years, Montana Senator Max S. Baucus has cultivated an image as a low-profile, behind-the-scenes lawmaker who zealously guards the interests of his state's farmers and ranchers. His record as a fiscal moderate and free trader has won him friends in the business community, just as his support for spending on social programs has won him plaudits from the Left. But when it matters most, the top Democrat on the powerful Senate Finance Committee has generally been true-blue to his party.
Not anymore. Baucus, 59, irritated the Democratic leadership when he worked hand-in-glove with Finance Committee Chairman Charles E. Grassley (R-Iowa) to produce a plan to cut taxes by $1.35 trillion over 11 years while dropping the 39.6% top marginal rate to 36%, up from President Bush's proposed 33%. The deal would focus most of this year's short-term relief on the middle class and give the wealthiest 1% slightly less cash down the road than Bush's initial plan. The compromise survived a series of Democratic assaults in committee on May 15. If it holds together on the Senate floor, Baucus could prove to be a big-time player on the biggest issue in town.
TARGETS. A frustrated Senate Minority Leader Thomas A. Daschle (D-S.D.) called the agreement "difficult to accept, impossible to explain." But the White House cheered--for more reasons than one. Bush sees Democratic Senators up for reelection in 2002, or whose states supported him last year, as possible crossover votes on key issues. Next, Bush will try to peel off Louisiana's Mary L. Landrieu, whose term expires in 2002, on energy legislation. Likewise, New Jersey's Robert G. Torricelli and Georgia's Max Cleland, both of whom face voters next year, are in Bush's sights. Another target: Ben Nelson of Nebraska, a state Bush carried handily.
Revolts such as Baucus' undercut Democratic leaders at a time when they're trying to present a united front against the GOP. By working with Grassley, Baucus deprives Democrats of their favorite argument against the tax cut: that it was rammed through by Republicans to benefit their rich donors.
So what made Max do it? As a Democrat in a conservative and increasingly Republican state, he is one of the GOP's top targets in the 2002 election. By embracing a big tax cut, Baucus carves out a position that's independent of his leadership and more moderate than the national Democratic Party. "There's no question what's motivating Max Baucus: November, 2002," says Stephen Moore, president of the Club for Growth, a supply-side lobby group. "Montana is a very conservative, pro-tax-cut state. This is the kind of deal that can save Baucus' seat."
FARM TEAM. Baucus has been working with Grassley ever since the 2000 election elevated them to the top of the influential tax-writing committee. Baucus says he called his Iowa colleague right after the election and offered to work with him on a tax bill. "One is much more likely to get something accomplished by being at the table than not," says Baucus.
Each week, Grassley and Baucus take time to talk policy and politics, alternating their visits between offices. They share passions ranging from pension reform to agriculture: Grassley is an Iowa pig farmer, and Baucus is from an old Montana ranching family. The two are likely to team up on the next big issue facing their panel: Bush's request for broad authority to negotiate trade deals.
Given Baucus' dicey political outlook in Montana, most Democrats seem willing to forgive him. True, they may grumble for a while. But with the Senate split 50-50, every vote counts. And if the time ever comes that Daschle gets a shot at Senate Majority Leader, he knows Baucus will do the right thing. Even as his panel completes work on a massive $1.35 trillion tax cut, Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) is looking ahead to a prescription-drug plan for seniors. Grassley is already working to pull together a deal on the contentious issue and says he hopes to have a compromise plan ready for committee action by August. The big sticking point: Republicans want Medicare reform as part of the package, while most Dems just want the drug benefit. The Securities & Exchange Commission plans to step up scrutiny of foreign companies doing business in Cuba, Sudan, and other countries subject to U.S. sanctions. Responding to Representative Frank R. Wolf (R-Va.), the agency said it will review offerings of shares in the U.S. to ensure that these companies are fully disclosing their business practices and political risks. Wolf says investors should know if a foreign company has aided or abetted terrorism, slavery, or religious persecution. President Bush may have backed away from a campaign promise to curb CO2 to combat global warming, but Administration officials are quietly considering a proposal from five major utilities to include CO2 in a comprehensive approach to tackling pollution. Utilities such as Wisconsin Electric Power figure limits are inevitable and want to design a flexible, reasonable strategy now. "We're working to convince them that it's O.K. to do something on CO2," says a utility lobbyist.