Baucus-Grassley Bipartisan Partnership Frays Under Health Reform Pressures

For nearly a decade, the cross-aisle team of Democrat Max Baucus and Republican Charles Grassley has shaped dozens of tax cuts, trade measures and health bills on the Senate Finance Committee. That led many to predict that the partnership would be strong enough to broker bipartisan health care legislation this year.

But as Congress returns to work next week, the partnership has frayed around the edges, thanks in part to a stream of caustic and pessimistic remarks from Grassley as he toured Iowa during the congressional recess. He initially made no attempt to challenge charges that the House Democratic health care legislation included “death panels” and later called President Barack Obama and House Speaker Nancy Pelosi “intellectually dishonest” in using the controversy as a diversion from the problems with the Democratic approach.

Now the question is: Can this marriage be saved? Don’t bet on it, at least when it comes to health care reform.

“Would either Baucus or Grassley arrive at a compromise just because we’re friends?” Grassley said in a recent interview with Kaiser Health News. “No. Product is what we’re working on and bipartisanship doesn’t result just because we have a good working relationship. It works because we’re able to work things out.” He insisted that his relationship with Baucus was still intact, however, and that bipartisan talks on the issue would continue.

Baucus agreed, telling KHN yesterday: “We have a long history of working across party lines, and while we may not always agree on every issue, we always try to find a way to work together.”

Grassley’s problem, said David Yepsen, the former chief political reporter for the Des Moines Register, is that he’s caught “between different forces crushing in on him,” with Senate GOP leaders and conservatives back home adamantly opposed to a deal, and large numbers of Obama voters in Iowa supporting health care action.  

Contrasting Views on a Timetable

Grassley, a five-term lawmaker who is up for reelection next year, also said in his KHN interview that he wasn’t sure that bipartisan talks could produce a Finance Committee deal in September. And he declared that the soaring budget deficit-projected to total $9 trillion in the coming decade–“puts a stake in the heart” of many reform ideas. 

For his part, Baucus, the chairman of the committee, says he still believes that health care reform is “inevitable” this year. “I remain committed to getting health care reform done – done right and done this year – and a bipartisan bill is my first, second and third choice,” he said yesterday. “As always – I’m going to work with anyone who shares that goal.”

But with Grassley, the ranking Republican, seemingly inching away from the bargaining table, Baucus may be left with a couple of bad choices:

–   Drastically scaling back the far-ranging, $900 billion plan on the committee’s drawing boards to satisfy a few Republicans-a move certain to alienate large numbers of liberal Democrats.
–   Standing aside as Senate and House Democratic leaders use special budget rules to try to push through a major bill-which would likely include a controversial public insurance plan–with virtually no Republican support.

“I think as Democrats talk about, ‘Let’s do it ourselves,’ that makes it easier for Grassley to say, ‘Okay, I’m out of here,’ ” said Yepsen, now the director of the Paul Simon Public Policy Institute at Southern Illinois University.

Following the death of Massachusetts Sen. Edward M. Kennedy last week, the Democrats’ majority in the Senate shrank to 59 votes, including two independents who generally vote with the Democrats. In all likelihood, the Democrats will need 60 votes to overcome a Republican filibuster to pass virtually any legislation this year.

Besides Grassley and Baucus, the Finance Committee negotiators are Republicans Mike Enzi of Wyoming and Olympia J. Snowe of Maine and Democrats Kent Conrad of North Dakota and Jeff Bingaman of New Mexico. If Grassley and Enzi bail out of the so-called “Gang of Six” talks, the Democrats’ only hope is to hold on to Snowe, a moderate Republican.

Even if Snowe stays on board, however, the Democrats could have trouble preventing defections by a handful of moderate-to-conservative Democrats who are facing strong opposition to health care legislation from their constituents.

A Shared Sense of Values

Baucus, 67, the reticent Montana rancher, and Grassley, 75, the folksy Iowa farmer, hail from wide open rural areas and share many of the same economic and social values. Both are political mavericks who have angered their party leaders in the past by cutting deals with the other side that conflicted with their party’s agendas.

The two political mavericks first teamed up in 2001, when Grassley took the helm of the Finance Committee, and they have swapped roles as chairman three times since then. Bipartisan deals worked out by them smoothed the way for President George W. Bush’s major tax cuts, the 2002 fast-track trade agreement, and the 2003 Medicare prescription drug benefit.

While sensitive to their respective parties’ political imperative, Baucus and Grassley frequently have charted a middle course, as when Baucus enraged Senate and House Democratic leaders by privately negotiating a compromise with Republicans to pass the Bush administration’s Medicare prescription drug benefit plan. Grassley sided with the Democrats to help pass a $35 billion expansion of a health insurance program for children of low-income families, although Bush later vetoed it. When Obama and congressional Democrats revived the legislation but changed provisions of the bill regarding legal immigrant children, Grassley voted against the bill. It passed nonetheless, and Obama signed it into law

This time, with the political stakes so high over the fate of Obama’s signature health care initiative, Grassley and Baucus are finding it much more difficult to chart a course independent of their parties’ leadership.

Senate Republican Leader Mitch McConnell, R-Ky., made an early calculation last spring that defying Obama on health care reform posed less of a risk to Republicans than seemed apparent in the wake of Obama’s landslide election results, in which many Republicans and independents supported the new president.

Beginning in May, McConnell began declaring publicly that his party stood ready to work with the president to reform the health care system, while stressing that “it’s important to get it right” and avoid creation of a  government-run health care system that “could soon lead to government bureaucrats denying and delaying care.”

Democrats pushed their own versions of health care reform through the Senate Health, Education, Labor and Pensions Committee and three House committees – Ways and Means, Energy and Commerce, and Education and Labor. But Baucus and Grassley decided to take a different approach, creating a six-member negotiating team consisting of three Democrats and three Republicans to try to draft compromise legislation that could attract large numbers of votes from both sides of the aisle.

Close Ties to GOP Leaders

Grassley and the leadership have stayed in close touch, with weekly reviews of where the talks are going.  In an interview with National Journal published Aug. 1, Grassley said that Republican leaders asked him to block any Democratic moves to ration health services or implement a public insurance option, although he tentatively supports a public cooperative that is not government-run. “So, the two things that Republicans are most concerned about – the public option and rationing – ain’t going to be in it,” he said in the interview.

Eric Ueland, a lobbyist and former chief of staff to former Senate Republican Majority Leader Bill Frist, said in an interview that “as the summer unfolded, Sen. Grassley himself made crystal clear that while he’s negotiating in good faith, he’s not operating in a vacuum, and he’s communicating clearly with the [GOP] leadership and his colleagues on the tenor and tone of the negotiations.”
 
As the “Gang of Six” seemed to be inching toward an agreement, Republican criticism of the effort stepped up and Grassley came under increased pressure from GOP colleagues to slow down or sidetrack the bill. Freshman Sen. Jim DeMint, R-S.C., boasted that if the Republicans could bring down the bill, Obama would suffer “his Waterloo.” Over the recess, Sen. Jon Kyl, R-Ariz., told reporters that the Republican leadership not only was unalterably opposed to a public option, but also would not go along with the fallback proposal of insurance cooperatives.
   
“I think it’s an accurate picture to say that both parties would try to discourage us,” Grassley told Kaiser Health News last week. “But we have held the position since January that we’re affecting one-sixth of the economy and that we’re affecting life or death issues with every American that it ought to be done in a broad bipartisan way and that’s lots of Republicans and lots of Democrats — but not necessarily all Republicans and all Democrats.”

Asked whether he has been criticized by some in the Republican leadership for persisting in search of a bipartisan deal, Grassley replied: “Not to my face, but I think to my back I have been.”

Baucus told The Associated Press that he understands that criticism is weighing heavily on the minds of Republicans. “They are in their home states and they are hearing a lot of what I am hearing: concerns,” Baucus said. “In some ways it is easy in the short term to vote against it.”

When they shook hands and returned home for the August recess last month, Baucus and Grassley believed that a health care reform deal was within their grasp and that the final details could be wrapped up by a Sept. 15 deadline Baucus set to placate Senate Democratic leaders who had grown impatient with the slow progress of the talks. Media reports suggested that the Gang of Six had resolved virtually every major issue, including a decision to go with a nongovernment insurance cooperative instead of a government insurance option. An aide to Baucus told a reporter that the only thing missing now was “the political will” to move ahead with a bill.

Baucus aides became alarmed by some of Grassley’s town hall comments, particularly the way he waded into a controversy sparked by former Alaska governor Sarah Palin concerning a Democratic end-of-life counseling provision in the House bill, warning that it could lead to “pulling the plug on grandma.” Grassley also suggested that if the bipartisan talks collapsed, it would be because he was “pushed away from the table” by the Democrats.

“I found that last one particularly puzzling because we have been trying to embrace him and pull him in,” said a senior Democratic Senate aide. “The idea anyone of us on our side pushed him away is peculiar.”

Aides to Baucus conferred with Grassley’s staff to try to determine whether there had been a sudden rupture in their relationship, according to the senior Democratic staffer. And Baucus conferred with Grassley several times by phone during the August break, gently sounding him out about how his town meetings were going and his impressions of public sentiment – but not confronting him about any of his statements.

With so much uncertainty about the fate of health care legislation this fall, the only thing that can be said with certainty is that the Baucus-Grassley relationship will be put to its ultimate test. 

“Grassley is a legislator, and likes to respond to problems, and Baucus is the same way,” explained a veteran Senate GOP adviser. “They never wanted to be president. They know there’s a problem out there and believe they need a long-lasting plan. But it has to make sense from a substantive legislative standpoint, it has to be good policy, or they won’t do it.”

KHN’s Mary Agnes Carey and Andrew Villegas contributed to this report.