The Senate’s victory

The Senate often deserves its reputation as a detached debating club; its occupants and procedures can lack the common touch.

But sometimes the upper chamber gets it right when the House makes a terrible mess, as it did in sending the financial sector bailout bill down to crushing defeat on Monday.

Perhaps the bill deserved defeat; admiration for the Senate does not depend, in this case, on thinking the legislation is perfect. Far from it. It is the Senate’s timing and political perception that stand out.

The defeat of the legislation in the House crushed stock prices, and suddenly what had been represented for days, particularly in the House, as taxpayer largesse for fat cats was revealed to have ramifications wider than the confines of Wall Street. Investors all over the country — indeed, all over the world — saw their savings shrivel like snowballs on a grill.

Suddenly, the bailout was revealed in its true colors, as a necessary though imperfect prop to the entire economy and to consumer and national self-confidence. The beneficiaries were not all striped-pants plutocrats. Public sentiment turned, and the Senate, not the “people’s House,” recognized it. The foul-up handed the Senate a golden opportunity.

They could look like the statesmen they claim to be, plus get their way in an end-of-the-session fight with the House by adding a massive package of tax breaks to the bailout.

The bill approved by the Senate includes a one-year patch of the Alternative Minimum Tax, which would otherwise be imposed and hit 24 million middle-class Americans with higher taxes. That addition makes it more difficult for House lawmakers to oppose the bill when they vote on it Friday, since they would be voting for a middle-class tax hike — not an attractive idea one month before an election.

House Majority Leader Steny Hoyer (D-Md.) wanted the tax bill to be offset, but he and other conservative Blue Dog Democrats now seem likely to knuckle under.

The bill even includes tax credits targeted toward solar and wind energy that were a priority of Senate Majority Leader Harry Reid (D-Nev.). “Harry Reid’s got the last laugh,” a former Democratic aide told The Hill.

Hoyer was clearly not happy about this on Wednesday and Thursday, but his public comments suggested he understood his defeat. While the Senate was using “blunt force” to get its way, he said, the upper chamber’s bill may be the best thing out there.

This isn’t the first time in this Congress that the House has had to bend to the Senate. Much of the story of the 110th is of a Democratic House unable to push its priorities through a Senate that Democrats control by just one vote.

This week, the story shifted a bit. On the bailout bill, Senate Democrats and Republicans joined as one to make the House look weaker both inside and outside the Beltway.