Sen. Max Baucus (D)

Max Baucus of Montana has been the senior Democrat on the Senate Finance Committee since Sen. Daniel Patrick Moynihan of New York retired in 2000, Baucus. He was the chairman from June 2001 to January 2003 and got the post back when Democrats regained control of the Senate in January 2007. As chairman, Baucus is President Barack Obama’s most important Senate ally on economic policy. This became apparent early in the administration when Obama brought a massive economic stimulus bill to Congress as his first major initiative as president. Baucus is also Obama’s Senate point man on health care policy, and is at the center of the current efforts to draft a bipartisan reform bill that can satisfy a majority in both parties and pass Congress.

Baucus is from a well-known Montana ranching family. In 1897, his great-grandfather Henry Sieben started the huge Sieben Ranch, including the land in the book and film A River Runs Through It. Baucus grew up on the 125,000-acre (195 square miles) ranch near Helena and graduated from college and law school at Stanford University. He then worked four years at the now-abolished Civil Aeronautics Board and the Securities and Exchange Commission in Washington. Baucus returned to Montana in 1971, and he was executive director of the state constitutional convention in 1972. Two years later, at age 32, he won the western House seat (Montana had two seats until 1992) by walking 600 miles along highways through the district. He defeated three past or future holders: Democrats Pat Williams and Arnold Olsen in the primary and Republican Richard Shoup in the general. Baucus won his Senate seat in 1978 by easily beating an appointed senator in the primary and a conservative Republican in the general. In March 2005, he became the longest-serving senator in Montana history.

Chairing the Finance Committee is a big job that comes with competing pressures. The panel has jurisdiction over tax, trade, and Medicare issues—all controversial in this decade—and the Senate Democratic leadership has sought a chairman loyal to party positions. But passing a bill in the Senate often requires 60 votes (to overcome potential filibusters), and they are easier to obtain when Baucus works out an agreement with his Republican counterpart, Charles Grassley of Iowa. This has been a tradition on Finance, adhered to by Moynihan and Republican William Roth of Delaware in the 1990s and Kansas Republican Bob Dole and Louisiana Democrat Russell Long in the 1980s. Also, as a Democratic senator from a generally Republican state—although one that has seemed less so since the victories of Gov. Brian Schweitzer in 2004 and Sen. Jon Tester in 2006 and the narrow loss by presidential candidate Obama in 2008—Baucus has political incentives to take a moderate course on some issues.

In 2001, Baucus, starting off in the minority, partnered with Grassley to unveil a $1.3 trillion tax cut package with specific provisions tailored to moderate Republicans and Democrats on the committee. The bill passed the committee 14-6 and the Senate 62-38 (with 12 Democrats, including Baucus, voting in favor). Key members of the coalition Baucus and Grassley assembled insisted that they would not accept major changes from the Senate bill, so something similar to the original came out of the House-Senate conference committee, and the first domestic priority of the Bush administration was passed into law. Around that same time, Sen. Jim Jeffords of Vermont was in the process of leaving the Republican Party to become an independent, handing effective control of the narrowly divided Senate to the Democrats. Tom Daschle of South Dakota, who became majority leader in June as a result of Jeffords’s flip, was reportedly furious that Baucus refused to consult with the Democratic Caucus before the final drafting of the tax bill; he presumably wanted to hold out for a more Democratic tax cut. In October 2001, pressure from Daschle may have reined in Baucus when he introduced a $70 billion economic stimulus bill and Republicans urged him to negotiate a compromise with Grassley. Baucus instead called on President Bush to step in. A smaller Baucus plan passed the committee 11-10 in November (with Jeffords as the swing vote). Similarly, on welfare, Baucus was unable to come up with a united Democratic position, so the 1996 law was not reauthorized until 2006. In September 2002, Baucus summoned all Finance members and told them that Daschle would allow no prescription drug bill to come out of committee and, according to some reports that Baucus denied, said that Daschle would strip him of his chairmanship if he drafted one. Instead, Daschle brought his own bill to the floor.

After Republicans won the Senate majority in November 2002, Baucus began working closely again with Grassley on major legislation. The two came up with a corporate tax bill that passed the Senate 92-5 in 2004. Baucus also worked with Grassley in 2003 to draw up a bill creating a prescription drug benefit in the Medicare program, which won a majority in the Finance Committee and in the Senate. Baucus supported provisions, sought mostly by Republicans, for private health insurance to play a larger role in Medicare. However, he got Republicans to drop provisions that would allow greater prescription drug coverage in private plans than in Medicare.

On Social Security, Baucus joined Grassley and other moderates in 2004 to discuss changes in the system. But in spring 2005, Baucus stuck with Minority Leader Harry Reid and the party line by rejecting personal retirement accounts in the program. “Privatization has to be off the table because it exacerbates or makes more difficult [achieving] Social Security solvency,” he said. He refused to discuss any proposal that included personal investment accounts and pressed other Democratic senators to do likewise. In 2005, he told AARP, an advocacy group for older Americans: “I’m the lead guy on this end, the person in charge of preventing privatization, and I love it. I’ve never had so much fun fighting for something that’s right.”

Trade issues are important to Baucus and his exporting state. Although he, like other Democrats, called for stronger labor and environmental standards in trade agreements, he has generally been more favorable to lowering trade barriers than most congressional Democrats. He was a leading advocate of normal trade relations with China, a potentially huge market for Montana wheat. He also supported an end to the trade embargo on Cuba. After Japan banned U.S. beef in December 2003, Baucus negotiated directly with the Japanese to reopen their market, which Japan later did. In 2007, Baucus called for renewing a measure that gives the president broad authority to negotiate free trade agreements, but said he would insist on stronger labor and environmental provisions.

As chairman again in 2007, with a narrowly divided Senate, Baucus continued to work closely with Grassley. “I care about results, and to get results, you have to work together and truly compromise,” he says. With solid Democratic backing, they won Senate approval in October 2007 to expand the State Children’s Health Insurance Program and also garnered a 68-31 vote to override Bush’s veto. (But the House lacked the two-thirds support necessary for an override.) Baucus and Grassley also cooperated on a $60 billion fix of the alternative minimum tax in 2007 to reduce its impact on middle-income taxpayers, and on a similar one in 2008. The latter bill included long-term extensions of tax credits for renewable fuels. Another recent pursuit was a bill closing the “tax gap” of $370 billion between what is legally owed to the IRS annually and what is actually collected. They also sought legislation imposing a 25% tax on Internet pornography sites and creating a .xxx domain for pornography. In 2008, Baucus led committee members in cutting a final deal on that years’ farm bill, with Baucus insisting on additional billions of dollars for disaster assistance, plus tax benefits for biofuels and conservation. For his state, Baucus added to the bill $500 million in tax credit bonds for the conservation of large tracts of land purchased by the government from Plum Creek Timber, Montana’s largest land owner. Critics called it a tax giveaway to Plum Creek.

When Baucus was first elected in 1978, Montana had been represented exclusively by Democrats in the Senate since 1952. As the state trended Republican in the 1980s and 1990s, he was re-elected nonetheless, but was pressed in 1996 when challenged by Dennis Rehberg, then the Republican lieutenant governor and now the state’s at-large House member. Baucus beat Rehberg by a slim margin, 50%-45%. Resentment over Clinton administration environment programs and George W. Bush’s big victory here in 2000 suggested that he might have a serious challenge in 2002. One Republican who might have beaten him was Marc Racicot, who had high job ratings as governor from 1992 to 2000. But Racicot, having been the lowest-salaried governor in the nation, wanted to make money and refused to run despite pleas from President Bush. The Republican nomination was left to state Sen. Mike Taylor, a wealthy owner of a cosmetology school who eventually spent $1 million of his own money on the campaign.

But Baucus had much deeper pockets. As Finance chairman, his fundraising capacity was enormous, and in all, he spent over $6 million—almost four times as much as Taylor. In the fall, Montana Democrats ran an ad that slyly suggested Taylor was gay. It showed 1980s footage of Taylor massaging a man’s face while applying facial cream and asserted that Taylor had failed to refund student-loan money when his cosmetology students dropped out. Taylor claimed that his wife made paperwork errors, and a Taylor aide said, “They’re playing off the old stereotype of men who work in the hair-care profession.” In any case, the race was probably already over. Taylor had only raised $658,000, he was still far behind Baucus in public polls, and national Republicans had decided it was not a priority race. Baucus won 63%-32%, carrying all but two small counties.

In 2008, after Racicot and Rehberg said they would not run, Baucus’s re-election was all but a done deal. Running against Butte attorney and former Green Party nominee for governor, Bob Kelleher, who spent less than 1% of Baucus’s total, Baucus hired more than 70 campaign staffers and took nothing for granted. He won 73%-27%, and this time took all 56 counties.

An avid runner, Baucus took a bad fall in a 50-mile race in Maryland in 2003 and two months later had surgery to relieve pressure on his brain. In June 2004 he had a pacemaker installed and the following month sustained minor injuries in a motorcycle crash in Montana. He suffered a tragic personal loss in July 2006 when his nephew, Cpl. Phillip Baucus, was killed in Iraq. The senator held the funeral at the Baucus family ranch in Montana.