Will Max Baucus undermine Democrats on taxes?

April 9, 2013

Here's what you need to know about tax reform in the U.S. Senate: Montana went for Mitt Romney by 13 points in the 2012 presidential election.

Max Baucus. (Haraz N. Ghanbari — Associated Press)
Max Baucus. (Haraz N. Ghanbari — Associated Press)

If that doesn't sound like an important tax reform fact to you, then you're not paying close enough attention. In the Senate, taxes are controlled by the Finance Committee. The chairman of the Finance Committee is Max Baucus. Max Baucus is from Montana. Max Baucus is up for reelection in Montana in 2014. And he knows that 2014, a midterm election, is going to be a tougher year for Democrats in Montana than 2012 was -- and even in 2012, Barack Obama lost Montana by double-digits.

Perhaps none of this would matter if Max Baucus was a bulletproof political force in Montana. But he's not. He's a seven-term incumbent with a 45 percent approval rating. His history of success makes him a favorite, sure. But those numbers don't make him a sure bet by any means.

Lori Montgomery's profile of Baucus nicely captures the possible implications for tax reform. She notes that Baucus "was one of only four Democrats who voted against the Senate budget, telling reporters that its '$1 trillion in tax increases is too much.'” She quotes Baucus saying, “Everyone wants to get rid of these loopholes. The question is what to do with the revenue. Republicans want to use it for rate reduction. Democrats want debt reduction...Let’s postpone a decision on that and work through the code and see how much this base-broadening actually gets us.’”

Rep. Dave Camp, chairman of the tax-writing committee in the House, believes that he and Baucus are on the same page. “We both agree that comprehensive, revenue-neutral tax reform is the right thing now," he said. In a joint op-ed the two men wrote for the Wall Street Journal this week, the word "revenues" is literally never mentioned.

To state the obvious, that's a lot of caginess on revenues from the Democrat in charge of tax reform.

But Baucus has also had his moments of, if not political brilliance, grinding effectiveness on behalf of Democratic causes. Many Democrats now think he was right to push the Medicare prescription drug benefit over the finish line in 2003. He spearheaded the Democrats' successful assault on President George W. Bush's Social Security reforms in 2005. And while he raised Democratic hackles while leading the health reform push in 2009, the fact is he got it done -- and liberal Senate insiders think that much of what he did was necessary to get it done. “He’s one of the heroes of health reform," John McDonough, a former aide to Sen. Ted Kennedy, tells Montgomery. "And you can quote me on that.”

Baucus also has a close relationship with Senate Majority Leader Harry Reid. When I profiled Baucus in 2008, insiders spoke frequently of his frosty relationship with former Senate Minority Leader Tom Daschle. But relations between Reid and Baucus, they said, were warm -- a judgment Baucus happily echoed. Reid's an "excellent leader" and "one of my best friends," Baucus told me.

It's unlikely that Baucus would move tax-reform legislation Reid loathes. After all, where would the effort get him? The bill would just die on the floor -- if indeed it ever made it to the floor -- and all Baucus's work would be for naught.

But it's a lot harder to predict where Baucus will end up than it would be if the Finance Committee were led by a Democrat in a safer seat. Some might say there are political advantages in that for the Democrats. Where House Republicans are being dragged rightward by their budget chairman, Senate Democrats are kept closer to the center by their finance chairman. But where House Republicans can trust that their representative in the tax talks will stick to the party line, Senate Democrats can't.

 

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