K Street's Favorite Democrat (Page 2)

"We see the world in the same way he does," says Greg Mastel, a former chief of staff to Baucus who now works as a lobbyist for Miller & Chevalier, representing clients like Home Depot and Eastman Chemical. "To me, a moderate Democrat as chairman of the Finance Committee is a good thing."

In recent years Baucus has not been shy about reaching out to K Street for campaign contributions. In February 2005 he asked fifty lobbyists to raise $100,000 each for his 2008 re-election campaign. Two lobbyists who attended told CNN that they "have never gotten such an aggressive pitch from a senator." In 2006, as the Abramoff scandal heated up, Baucus removed lobbyist William Oldaker as treasurer of his PAC. But his longtime fundraiser, Shannon Finley, recently left to join other former Finance Committee staffers at a new firm, Capitol Counsel, which principal John Raffaelli said will give corporations "the best opportunity to present their case."

Since becoming chairman, Baucus has sent out three invitations to upcoming big-ticket ($2,000 per person, $5,000 per PAC) fundraisers for his Glacier PAC, including "skiing and snowmobiling in Big Sky" and fly fishing and horseback riding at "Camp Baucus" in August. Baucus says that raising money from lobbyists at such gatherings "has no effect, none whatsoever, on my thinking."

Pat Williams, a liberal Congressman from Montana from 1979 to 1997, says his former colleague "is hardworking and puts Montana first." But, adds Williams, Baucus doesn't take the clear stands on difficult issues that would keep lobbyists away. "He is simply bombarded by interests trying to persuade him," says Williams. "He's like a tin plate on the ocean being pulled this way and that."

Baucus is off to an inauspicious start as chairman, beginning with his handling of minimum-wage legislation. On the day the House of Representatives passed a federal wage increase by a vote of 315 to 116, Baucus held a hearing on Tax Incentives for Businesses in Response to a Minimum Wage Increase. Of the five testifying witnesses, only one expert, Jared Bernstein, senior economist at the Economic Policy Institute, advocated a "clean" bill without the tax breaks. "I've been on minimum wage panels for years," says Bernstein, "and this was no better than the ones during the Republican era." The Finance Committee subsequently attached $8.3 billion in tax breaks for small business to the legislation. "People like to vote for tax cuts," Baucus told me afterward.

Baucus's Democratic colleagues were furious that he didn't even try to advance a clean bill. "Maybe he doesn't have a strong feel for the depth of support that this bill has," House Ways and Means chair Charles Rangel, Baucus's House counterpart, told the Wall Street Journal. In a private caucus meeting, Ted Kennedy, the leading advocate for a clean bill, personally assailed Baucus. "He got railed in there," one observer said later. A provision in the bill, reportedly slipped in by Grassley, that encourages employers to contract with staff leasing companies, making it harder to unionize temporary human resources employees, particularly angered the coalition of labor groups that supported the House version. "The Finance Committee operates like there's been no election," says one labor leader. (The House passed a much smaller package of tax cuts on February 16 and is currently reconciling its version with the Senate's.)

But lobbyists for the tax breaks were overjoyed. "We wholeheartedly supported the way they approached that," says Chris Walters, a tax lobbyist for the National Federation of Independent Business, one of Washington's most potent business groups. Added Walters colleague Amanda Austin, "He'll be a good advocate for us going forward."

Baucus has rarely seen a tax cut he didn't like. Unlike many Democrats, he wants to extend Bush's 2001 tax cuts. And he's still seeking a compromise on the estate tax, whose repeal he supported last summer. Would he still like to find a way to reform the tax? "Oh, yeah," he says. "Senator Baucus has been interested in it before and could be in the future," says Dorothy Coleman, vice president of tax and economic policy at the National Association of Manufacturers, another powerful DC business group lobbying for "death tax" repeal.

Taxes are not the only issue on which Baucus parts from the majority of his colleagues. In early January he wrote an editorial in the Wall Street Journal calling on Democrats to renew Bush's fast-track authority for international trade deals. Given that most Democrats elected in 2006 campaigned against agreements like NAFTA and CAFTA, the editorial was a provocative move. Byron Dorgan, chair of the Senate Democratic Policy Committee, took the unusual step of rebuking Baucus in a letter to the Journal. "There is, indeed, a growing Democratic consensus on trade--but in the opposite direction," Dorgan wrote. The chairman of the taxation committee in the Montana Senate went further, passing almost unanimously a resolution urging Baucus to oppose fast-track authority. Under growing pressure from his colleagues, Baucus has since called for attaching tough, enforceable environmental and labor standards to any fast-track accord and restoring a measure of Congressional oversight. But he remains a committed proponent of economic neoliberalism. "We can't be protectionist, or other countries are going to pass us by," Baucus says.

On Medicare, too, Baucus has failed to address the deep flaws in policy he helped write. The House Democrats' "100-hour plan" included a provision instructing the government to negotiate lower drug prices under Medicare. Baucus had voted against such amendments in the past and after the election refused to show his hand. Eventually, he agreed to support the repeal of the "noninterference clause" in the law but declined to require the Secretary of Health and Human Services to negotiate, thereby taking any teeth out of the bill. And he couched his statement in supply-side rhetoric. "I see nothing that warrants heavy-handed intervention in this market," he said in a statement. "We should proceed cautiously with any legislation." PhRMA has blanketed newspapers and television screens with ads praising the Medicare law and opposes plans circulated by many Democrats to create a government-run drug benefit--the only step, experts contend, that will significantly lower prices. Baucus is close to the organization. His new health counsel, Michelle Easton, came to his office after a stint at PhRMA.

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