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Baucus-Grassley Alliance Tested From All Sides

Although a renowned bipartisan relationship in the Senate seemed to be on the rocks last week, it appears that Finance Chairman Max Baucus (D-Mont.) and ranking member Chuck Grassley (R-Iowa) fell victim to the partisan pull of the rest of the chamber.

The two rarely oppose each other on legislation, and both have been criticized by Members of their own parties for compromising too much with each other. So, it was notable last week when Baucus and Grassley went separate ways on two must-pass pieces of legislation — a bill to extend expiring tax provisions and a measure intended to avert a pay cut for doctors who treat Medicare patients.

“That’s not his or my fault,” said Grassley, who explained that the pull of the liberals in the Democratic Conference on Baucus and the White House’s influence on himself largely led to the breaks.

Grassley added, “I’ve got the same considerations he’s got. In other words, Baucus and Grassley are not a majority in the Senate.”

Sen. Olympia Snowe (R-Maine), who co-chairs the Senate’s Common Ground Coalition, said election-year pressures on Grassley and Baucus have taken a toll on the legislative process in the Senate, where last week Democratic versions of the bills were blocked by Republicans from coming to the floor.

“I think there’s enormous mutual respect, and I can see that on the Medicare bill,” said Snowe, who also sits on the Finance panel. “I think it’s unfortunate that we’re in a political state of being here that has basically paralyzed the process.”

Even with most measures stopped dead in their tracks on the Senate floor these days, Baucus and Grassley have predicted that they will reach an accord on the tax extenders and Medicare legislation in the next few weeks. A compromise on tax extenders could be in the offing today when the Senate votes again on a procedural motion that could lead to full debate of the measure.

On the tax bill, Grassley drew a line in the sand in April when he orchestrated a push to get 41 GOP Senators — enough to block legislation — to sign a letter warning Baucus that they did not believe extensions of current tax law needed to be offset with revenue raisers. Offsets are required by Democratic-instituted pay-as-you-go budget rules for any new mandatory spending or tax cuts.

Republicans Senators made good on their filibuster threat last week by blocking Baucus’ partially offset tax bill from coming to the floor. It was unclear where the compromise would end up.

“In the case of taxes, it’s a difference between the philosophy of the two parties,” Grassley said. “Democrats have PAYGO, and we think PAYGO is a tax-and-spend policy. … But we’ll get together eventually. We’ll have to.”

Baucus struck a similar tone last week and expressed confidence that the two would work out their differences on both bills.

Most Senators and aides said last week’s partisan-tinged vote on Medicare appeared to be more about making political points than real attempts at legislating.

“On [Baucus’] left, he had people who thought we ought to do a lot more” on the Medicare bill, Grassley said. “When that came along a month ago, it kind of was like a grenade [in negotiations.] So we’re in a Kabuki dance.”

The Democratic bill would expand Medicare benefits for low-income seniors, a move opposed by Republicans and the White House.

Senate Minority Whip Jon Kyl (R-Ariz.) expressed frustration about having to go through the motions of voting on partisan bills, but he said he did not doubt Baucus’ willingness to negotiate.

Baucus “has to prove to his side that the Democrats can’t roll the Republicans, and once he demonstrates that to them, then I think he and Chuck will get back to negotiating,” Kyl said. He added, “Baucus can go back [to the Democrats] and say, ‘I told you we need to do it in a bipartisan way.’”

With Baucus being pulled by the left, Grassley said he had been grappling with the White House.

“On Medicare … if the White House had not been involved in it, I don’t think I would have had much problems on my side getting an agreement,” Grassley said. “But the White House has to sign a bill. So the reality is I’ve got to take that into consideration.”

Baucus agreed that the White House’s hard-line stance on the Medicare doctor’s bill in particular was a problem.

“The White House has put so much pressure on Republicans, and Sen. Grassley, as a very good ranking member of the Finance Committee, has to pay very close attention to his rank and file,” Baucus said.

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