Elected: 1978, term expires 2014, 6th term.
Born: December 11, 1941, Helena
Education: Stanford U., B.A. 1964, LL.B. 1967
Professional Career: Staff atty., Civil Aeronautics Bd., 1967–69; Legal asst., Securities & Exchange Comm., 1969–71; Practicing atty., 1971–74.
Family: married (Melodee Hanes ) , 1 children
Democrat Max Baucus, first elected in 1978, chairs the Senate Finance Committee and has served on that panel longer than anyone in history. He is one of Congress’ most influential members, although his habit of working closely with Republicans arouses suspicion among fellow Democrats and his connections with lobbyists irritate watchdog groups. He is serving his sixth and final term in the Senate after announcing in April 2013 that he wouldn’t seek reelection in 2014.
Baucus hails 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 Stanford University and its law school. He then worked four years at the now-abolished Civil Aeronautics Board and at the Securities and Exchange Commission in Washington. Baucus returned to Montana in 1971 and 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 U.S. House 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 election. In 1978, Democratic Sen. Lee Metcalf, first elected in 1960, died in office. Gov. Thomas Judge appointed state Supreme Court Justice Paul Hatfield to succeed Metcalf, but Baucus ran in the Democratic primary and beat Hatfield 65%-19%; he won the general election 56%-44% in a state where no Republican had won a Senate race since 1946. He has won reelection every six years since; his closest race was in 1996, when he beat back a challenge from Republican Denny Rehberg, later the state’s lone representative, 50%-45%. In March 2005, he became the longest-serving senator in Montana history.
In preparation of a tough 2014 fight, he had just under $3.6 million in the bank at the start of 2013. But Montana's growing conservatism led Baucus to conclude that it wasn't worth the enormous campaign effort that would have been involved. His decision enabled him to spend his time concentrating on his legislative priorities, such as tax reform.
Baucus got a seat on the Finance Committee early in his Senate career, at age 36. After Democratic Sen. Daniel Patrick Moynihan of New York retired in 2000, Baucus became the ranking minority member on Finance. Then, in June 2001, when Vermont Sen. Jim Jeffords’ party switch gave Democrats the majority, Baucus rose to chairman. Finance has jurisdiction over tax, trade, and Social Security, Medicare, and Medicaid, making it one of the most important committees in Congress. Under longtime Finance Chairman Russell Long of Louisiana, a senator from 1948 to 1987, and Long’s successors, the committee has tended to operate in bipartisan fashion, on the assumption that it must have a consensus to ultimately get the full Senate to go along.
Baucus has continued that tradition. When Republicans regained control of the House in the 112th Congress (2011-12), he formed an alliance with House Ways and Means Committee Chairman Dave Camp, R-Mich. The two men share a fierce interest in comprehensively overhauling the tax code and began talking at least once a week when Congress is in session. Their committees held three joint hearings on tax reform; the last time the two tax-writing panels did something similar was 70 years ago. Baucus and Camp also worked to pass trade agreements and an extension of the payroll tax holiday. “We compare notes,” Baucus told National Journal in August 2012. “I have a high regard for Chairman Camp, and I think he’s very amenable to what we’re trying to do.”
Baucus also worked with Finance’s ranking Republican, Utah’s Orrin Hatch, on a package of bills that extended billions of dollars in business and personal tax breaks that the committee passed in August 2012. Hatch played up his conservative side while facing a tough reelection fight that year, but after winning the race, he was expected to return to his old deal-making ways. Baucus was active on the compromise that passed on New Year’s Day 2013 and was aimed at averting the so-called “fiscal cliff.” It included many of those extensions, although he had to cede final negotiation authority to Vice President Joe Biden.
But Baucus also faced stinging criticism from conservatives and liberals because the final package contained tax breaks to benefit corporations employing lobbyists who had once worked for the Finance chairman. One of the breaks went to pharmaceutical giant Amgen to block Medicare from regulating the price the company’s dialysis drug for two more years at a cost to the program of roughly $500 million. Baucus denied any favoritism was involved. “Frankly, I’ve got to be proud of myself,” he told Montana reporters in January 2013. “Congress was basically totally dysfunctional on this general subject, so I got the committee together and said, ‘OK, everybody here, Republicans and Democrats, let’s work together on this question.’”
He enjoyed an even closer relationship with Hatch’s predecessor on Finance, Charles Grassley of rural Iowa. Baucus and Grassley unveiled a $1.3 trillion tax cut package in 2001 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). The final version passed by Congress was much like their bill, and the first domestic priority of the George W. Bush administration was passed into law. Then-Senate Democratic Leader Tom Daschle was reportedly furious that Baucus refused to consult with the Democratic Caucus before the final drafting of the tax bill, and in October, pressure from Daschle may have reined in Baucus when he introduced a $70 billion economic stimulus bill. Although Republicans wanted him to negotiate a compromise with Grassley, Baucus instead called on Bush to step in. Similarly, Baucus was unable to come up with a united Democratic position on welfare that year.
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 make other concessions. In 2005, Grassley and Baucus could not find a way to similarly work out a deal on Bush’s proposal for private retirement accounts in Social Security, which Baucus viewed as a threat to achieving Social Security solvency.
Trade issues are important to Baucus and his exporting state. Like other Democrats, he has called for stronger labor and environmental standards in trade agreements but has generally been more favorable to lowering trade barriers. He was a leading advocate of normal trade relations with China but, in recent years, has been increasingly critical of China for undervaluing its currency. And he has supported an end to the trade embargo on Cuba. After Japan banned U.S. beef in 2003, Baucus negotiated directly with the Japanese to reopen their market, which Japan later did. He also tangled with the White House in 2011 over a pending South Korea free trade agreement because he sought—and eventually got—the ability to expand access for U.S. beef there.
As Finance chairman again in 2007, after Democrats regained a narrow majority in the 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 said. With solid Democratic backing, they won Senate approval in 2007 to expand the State Children’s Health Insurance Program, and the Senate voted 68-31 vote to override Bush’s veto. The two cooperated on the annual fixes to the alternative minimum tax in 2007 and 2008. Also in 2008, Baucus led the committee on the final deal on the farm bill, insisting on additional billions of dollars for disaster assistance, plus tax benefits for biofuels and conservation. Baucus added $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. Four years later, he was again a player on the Senate-passed farm bill, adding $100 million for the U.S. Forest Service for combating bark-beetle outbreaks in Montana and elsewhere, plus another $350 million a year for cooperative forestry programs.
Health care legislation was a top priority for Baucus and the committee after the election of Barack Obama as president in 2008. In the spring and summer of 2009, Baucus held extended negotiations with Grassley and Republican moderate Olympia Snowe of Maine to come up with a bill that could get bipartisan support. Liberal Democrats chafed, and Grassley charged later that they might have reached agreement except for their resistance. The White House, with 60 Democratic senators after Al Franken of Minnesota was seated in July, insisted Baucus move ahead on a Democratic version.
That was the course he took. Baucus’ bill did not include the public option allowing for the creation of a government-run health insurance plan, which also did not make it into the final law. Other features were an excise tax on high-cost health insurance plans and creation of exchanges in each state to run insurance programs in lieu of giving control to the U.S. Health and Human Services Department.
As with the later fiscal cliff deal, Baucus had to fend off questions about his ties to health care and insurance lobbyists. The Sunlight Foundation in 2009 identified five former Baucus staffers in those fields who represented 27 different corporations and associations. His chief health counsel, Liz Fowler, in 2010 became a deputy director at the Health and Human Services Department to help implement the law; she later became a lobbyist for Johnson & Johnson.
Baucus has had a sometimes strained relationship with Senate Majority Leader Harry Reid and the rest of the Democratic leadership. Montana is a major coal producer, and in October 2009, he criticized the Democratic bill creating a cap-and-trade system of reducing carbon emissions, with the aim of a 20% reduction by 2020. When Baucus and Grassley announced a jobs bill in February 2010, with an extension of the 2009 Build America Bonds and a one-year extension of the highway bill, Reid immediately killed it, saying it was too favorable to Republican positions. After the 2010 election, Baucus and Grassley, along with their House counterparts Camp and Democrat Sander Levin, backed an alternative minimum tax fix, which was passed. Baucus had tried unsuccessfully to move a bill extending the Bush-era tax cuts except for high income earners, and he initially came out against the deal negotiated by Obama with Republicans to reauthorize the 2001 and 2003 tax cuts for all taxpayers. Citing jobs, Baucus ended up voting for it.
Baucus was one of the six senators on Obama’s fiscal commission, headed by Erskine Bowles, a former Clinton White House chief of staff, and former Republican Sen. Alan Simpson of Wyoming. But he voted against its recommendations, even as the other five senators, including Democrats Richard Durbin of Illinois and Kent Conrad of North Dakota, voted for them. Baucus said the proposals would paint “a big red target on rural America” by cutting farm programs, military pensions, and Social Security and Medicare.
Baucus’ close call in the 1996 election was not repeated in 2002 or 2008. A Senate Finance Committee chairman can raise enormous sums of campaign cash. In 2002, Baucus attacked his Republican opponent Mike Taylor, owner of a cosmetology school, with an ad slyly suggesting 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 said the ad played on stereotypes and that his wife had made paperwork errors on their taxes. Baucus spent more than $6 million, while Taylor spent $1 million in personal funds, and won 63%-32%, carrying all but two small counties. In 2008, Baucus’ opponent was a former Green Party nominee for governor, and he won easily, 73%-27%, winning all 56 counties even as John McCain was carrying the state.
Over the years, Baucus has stayed in excellent physical shape and has made a point of hiking, biking, and running in Montana. But he 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. His personal life attracted some unfavorable press coverage in March 2009, when his nominee for U.S. attorney for Montana, Melodee Hanes, withdrew her candidacy, and it was later revealed that the two were romantically involved. Both were separated from their spouses. Hanes had been a top Baucus staffer, his state director, and senior counsel, and in 2008, he raised her salary by over $13,000. After withdrawing her nomination, she got a position in the Justice Department, and the two married in July 2011.