Baucus Gets His Shot at Stimulus

Anxious Eyes Watch Senate

Posted January 25, 2008 at 6:31pm

After having been shut out of last week’s negotiations on an economic stimulus measure, Senate Finance Chairman Max Baucus (D-Mont.) will attempt to fashion his own plan this week even as time constraints and the political realities of the House’s delicate compromise work against him.

Indeed, Senate Majority Leader Harry Reid (D-Nev.) decided, with the consent of Senate Minority Leader Mitch McConnell (R-Ky.), to remove his chamber from the primary negotiating table with the House and the Bush administration in part because he feared that the cacophony of Senators’ individual proposals would imperil any shot at a compromise before Reid’s self-imposed Feb. 15 deadline, several Congressional aides said.

As chairman of the tax-writing committee, Baucus in particular loomed as a potential obstacle for Reid, given what many Democrats see as Baucus’ penchant for giving in to too many GOP demands on some bipartisan deals, those aides said.

“The Senate didn’t involve itself in the negotiation because this gave Reid more flexibility to deal with Baucus once a deal had been struck” between the House and Treasury Secretary Henry Paulson, said one Democratic aide familiar with the process. “Now, Baucus is in the position of being on the outside of the negotiation trying to impose some changes.”

Even Reid appeared to hint last week that he was loath to deal with his committee chairmen on the stimulus bill, given the outpouring of legislative proposals from all corners of the Senate.

“We have our committee chairs that we have to deal with. And it’s not easy. But we’re going to have to get it done as quickly as possible,” Reid said last week.

When asked Friday why he ceded negotiating authority to the House only to reassert the Senate’s prerogatives later, Reid said giving the House the first stab helped speed up the process. But, he said, “we’re going to stick to the House package as much as we can.”

Similarly, McConnell said in an interview last week that viewpoints among Republicans range from those who don’t want to do anything at all to those who want to increase the size of the package.

“Reid and I almost simultaneously said the same thing: ‘We’re going to step back and see what you guys can come up with in the House,’” McConnell said, explaining the rationale for the decision to give the House lead negotiating authority with the administration.

Meanwhile, House Democrats said they believed they were designated as chief negotiators precisely to help facilitate swift passage in the Senate.

“House leaders are operating under the impression that they were negotiating with Republicans and the White House, which would help give Reid the leverage to move it quickly through the Senate,” said one House Democratic leadership aide.

But with Baucus and other Senate Democrats on a glide path to crafting their own measure, Senate Democrats said they would try to make the best of it, particularly since Baucus is hardly alone in the party in wanting to beef up assistance to lower-income Americans.

“It’s hard to say what will pass, but we’re not going to blow this process up,” said one senior Senate Democratic aide.

Echoed another senior Senate Democratic aide, “While we think [the House deal] is a generally good package, the Senate doesn’t need to unilaterally disarm on what we think are good ideas.”

Now that House Democrats and Republicans have struck a deal with the White House on a bill to provide tax rebates to poor and middle-income working Americans, President Bush is sending signals that he’s not keen on reopening talks for the Senate to weigh in.

“I understand the desire to add provisions from both the right and left,” Bush said Friday. “I strongly believe it would be a mistake to delay or derail this bill.”

Still, Reid has made it clear publicly that, even though the House-White House deal has been struck, he not only expects Baucus to mark up his own version, but also expects Senate Health, Education, Labor and Pensions Chairman Edward Kennedy (D-Mass.) and Senate Banking, Housing and Urban Affairs Chairman Chris Dodd (D-Conn.) to take a whack at it.

Both Baucus and Kennedy have said they want to add an extension of unemployment benefits along with extra money for food stamps, while Baucus also has dangled the prospect of including additional small business tax breaks in the bill along with expanding the rebate to include all workers. Dodd has focused on addressing issues related to the housing crisis.

Baucus’ office responded by pointing to the chairman’s comments last week. In a Jan. 24 statement, Baucus said that he was committed to moving quickly and that his panel’s actions would not hold up the bill.

“Americans want Congress to pass economic stimulus fast, but they also want us to get it right,” Baucus said. “I am confident that Finance Committee action can help Congress consider an agreement that can quickly pass both chambers and be signed by the president.”

The House-brokered agreement would provide tax rebates along with some targeted small-business tax incentives — and tinkering with that compromise has some Democrats nervous.

“Unless this is handled with a lot of skill and a lot of delicacy, this has the potential to sink the whole economic stimulus package,” said the Democratic aide familiar with the process.

Even Reid appeared to question whether the Senate would change much — despite well-known efforts by his fellow Democrats to add billions more in spending.

“It’s going to come to the Senate, and we’re going to take a look at whether and how we should change it,” he said following a speech at the National Press Club on Friday.

Plus, Speaker Nancy Pelosi (D-Calif.) has strongly hinted that Democrats should pass another bill later on that would add extensions of unemployment insurance and an expansion of food stamp benefits — two Baucus priorities. Asked Friday why she acceded to GOP demands to jettison food stamp benefits from the final stimulus package, Pelosi pointed to upcoming debate on a farm bill that would increase spending on that program. Barring that bill becoming law, she suggested separate legislation just dealing with food stamps, but she did not mention the Senate’s expected attempts to add it to the stimulus measure.

“Do we want them to pass our bill and get it to the president quickly? Yes,” said the House Democratic leadership aide. “But that doesn’t preclude us from doing some of these other things later.”

Senate Republicans also questioned the wisdom of attempting to alter the House- negotiated compromise, particularly when leaders in both parties have put a premium on getting the bill to the president as quickly as possible.

“The easiest way in terms of getting done quickly is to simply accept” the House package, said Senate Minority Whip Jon Kyl (R-Ariz.). “The hard way would be to add billions more to it and then expect the president to just stand by and say, ‘Gee, that’s OK with me to add that much more to the deficit.’”

Though they acknowledge their chances of getting the White House to make more concessions is slim, Senate Democratic aides said Members feel strongly that they should have their bite at the apple.

“The worst-case scenario is that those extra items don’t get included in the package, but they get highlighted as Democratic ideas,” said one senior Senate Democratic aide.

Another senior Senate Democratic aide said, “I think Senate Democrats would be skewered for not trying.”