Baucus helps Smith, defying his leadership

Sen. Max Baucus (D-Mont.) has defied his leadership’s orders not to work with vulnerable Republicans facing reelection.

Baucus, the sometimes-maverick chairman of the Senate Finance Committee, used a bill sponsored by Republican Sen. Gordon Smith, who is facing a tough reelection battle in Oregon, as the basis of an Iran sanctions plan his committee passed last week.

{mosads}Smith believes Baucus used his bill and gave him credit for it at a Senate Finance Committee markup because the chairman felt bad about shutting Smith out from legislation to prevent cuts to Medicare physician payments.

“He was very sheepish about it when he told me I couldn’t be the lead,” said Smith, recounting his conversation with Baucus about Medicare legislation. “My sense is that Max is very anxious to take on healthcare for seniors but he has tremendous pressure on him from above to toe the line.”

Baucus’s actions suggest Democratic senators will sometimes work to retain good relationships with their GOP counterparts despite the edict from leadership not to help Republicans in danger of losing election bids.

In the case of the Iran bill, Baucus gave a lift to Smith and irritated business groups, since the legislation could prevent a nuclear agreement between the U.S. and Russia from being implemented, potentially costing General Electric and other companies billions of dollars.

A senior Democratic aide said he was not aware of leadership forbidding chairmen and rank-and-file Democrats from cooperating with vulnerable Republicans on popular legislation, but GOP senators said they have no doubt such a prohibition exists.

“I have seen that,” said Sen. Chuck Grassley (Iowa), senior Republican on the Finance Committee, when asked if Democrats have refused to work with endangered Republicans.

“There was ample evidence of it in a meeting I had this morning,” he said, but declined to reveal details of private meetings out of respect for his colleagues.

Smith noted that, with the exception of Baucus, other Finance Democrats were careful not to mention his name as they considered the Iran Sanctions Act of 2008, which was modeled after Smith’s bill.

“I thought it was nice of him to mention that he used my bill,” Smith said of Baucus. “He and I have a great working relationship, and I don’t think he wants to see that compromised and neither do I.”

After Finance approved an Iran sanctions bill based on Smith’s Iran Counter-Proliferation Act of 2007, Smith blasted out a news release touting the victory. Smith’s bill had gathered 72 co-sponsors, including Baucus and more than 30 Democrats, since March of last year.

{mospagebreak}The bill would prohibit almost all imports and exports to Iran except for supplies to help humanitarian missions. It would urge the United Nations to take steps to decrease investment in Iran’s energy industry. It would also prohibit action leading to a preferential trade agreement with Iran or Iran’s entry into the World Trade Organization (WTO).

The bill is sparking opposition from business groups because it includes language from Smith’s bill that would prevent the “123” nuclear cooperation agreement between the U.S. and Russia from going into effect.

{mosads}It would do so by requiring the president first to certify that Russia is providing no nuclear assistance to Iran, or to certify that Iran has completely and irreversibly dismantled its nuclear enrichment and reprocessing programs. Since the first requirement would cover civilian nuclear assistance, business sources said neither is likely to be met.

“We believe that the United States must certainly seek greater Russian cooperation on Iran, but [the bill] is counterproductive in terms of achieving that cooperation,” the National Foreign Trade Council wrote in a letter to Grassley that referenced Smith’s bill.

General Electric and other U.S. companies want to work with Russia on civilian nuclear power, a growth industry given the fact that dozens of countries are talking about moving to nuclear power in the decade ahead.

If the deal is not implemented, U.S. businesses might lose out to countries such as France, a nuclear industry source said.

“I think we are looking at tens of billions in opportunities for U.S. industries,” one nuclear industry source said. He said it would be “extremely disappointing” for U.S. firms to miss out on the opportunity.

“The U.S., from a business and a technical point of view, has at least as much to gain from this as Russia,” said John Wolfstahl, a senior fellow at the Center for Strategic and International Studies who works on nuclear policy.

Baucus’s defiance of leaders’ orders not to cooperate with Republicans such as Smith shows a rebellious streak that once earned him the moniker: Max Baucus, the one-man caucus.

Most notably, Baucus defied then-Democratic leader Tom Daschle’s (S.D.) orders not to strike a quick deal with Republicans on President Bush’s proposed tax cuts in 2001. But Baucus surprised his leader and paved the way for a $1.3 trillion tax cut package by forging a deal with Grassley, who then chaired the Senate Finance Committee.

Baucus, who represents a state where Bush won nearly 60 percent of the vote in 2004, prides himself on his ability to work with Republicans to pass significant legislation. He has clashed with liberals such as Sen. Jay Rockefeller (W.Va.), the second-ranking Democrat on Finance, by at times supporting Republican-favored policies.

In a brief interview with The Hill, Baucus said the “Smith bill was the basis” of the Finance panel’s bill. But he noted that the committee modified Smith’s bill because it failed to comply with WTO regulations.

Baucus said he did not have to use Smith’s bill as the base but declined to say why he chose legislation sponsored by a Republican whom Democratic political strategists are trying to discredit.

He only said, “What we passed out of committee is a good bill.”

Ian Swanson contributed to this article.