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Max Baucus Holds the Cards on Healthcare Reform (and most everything else)

By Carol Eisenberg
May 22, 2009

Published by Muckety.com.

 By all accounts, Sen. Max Baucus is a quiet, unassuming guy not given to speechifying or hogging the spotlight like most politicians. Nonetheless, the Montana Democrat has emerged as an unlikely kingpin.

Virtually all the legislation that President Obama hopes to sign into law this year--from health care reform to new car emissions standards--needs Baucus' blessing as the chairman of the powerful Senate Finance Committee.

[See this interactive map detailing Baucus' healthcare reform relationships.] 

Staffers like to say the finance committee is responsible for all the money the government raises and half of what it spends--an exaggeration, but not too far off, given its jurisdiction over tax, trade, Medicare and Social Security issues.

The Montana centrist is said to have had a ‘come to Jesus moment’ on healthcare reform. He surprised many of his colleagues by releasing an 89-page white paper just eight days after the presidential election that went further than what Obama had proposed--adding a requirement that those not covered by employers’ health plans must purchase their own.

But he has hardly been a reliable Democratic player in the past.

When Democrats were in the minority, Baucus brokered the passage of two of George W. Bush’s signature first-term achievements: his massive 2001 tax cuts and his 2003 pharmaceutical-industry-friendly Medicare prescription-drug bill--earning the nickname “Bad Max” from the American Prospect and “K Street’s favorite Democrat” from the left-leaning Nation.

To be sure, Baucus has also carried water for the party. In 2005, Majority Leader Harry Reid put Baucus in charge of the Democratic effort to block Social Security privatization. Baucus made sure that it never came up for a vote.

And he has consistently championed the State Children’s Health Insurance Program, teaming up with his close friend, Chuck Grassley, the committee’s ranking Republican, to try to expand the program over Bush’s veto.

But given Baucus’ unpredictability and his ties to many of the major stakeholders in the healthcare industry, some continue to worry which Max Baucus may show up for the fight looming ahead.

Baucus has been one of the biggest Senate beneficiaries of campaign contributions from the pharmaceutical and health insurance industries.

From 2003 to 2008, he received about $3 million from the health sector, including $852,813 from pharmaceutical companies, $851,141 from health professionals, $784,185 from the insurance industry and $465,750 from HMOs/health services, according to the Center for Responsive Politics.

(The only senators who received more than him in that period were Barack Obama, Hillary Clinton and John McCain.)

Moreover, a number of ex-staffers with whom he is still close, among them, former chief of staff, David Castagnetti, are now working for the pharmaceutical and health insurance industries.

Castagnetti co-founded the lobbying firm of Mehlman Vogel Castagnetti, which represents America’s Health Insurance Plans Inc., the national trade group of health insurance companies, the Medicare Cost Contractors Alliance, as well as Amgen, AstraZeneca PLC and Merck & Co.

Another former chief of staff, Jeff Forbes, went on to open his own lobbying shop and to represent the Pharmaceutical Research and Manufacturers of America and the Advanced Medical Technology Association, among other groups.

On the other hand, Baucus’ relationship with Senate Majority Leader Harry Reid is said to be warm--in sharp contrast to the enmity that existed between him and Former Leader Tom Daschle (who would have been leading the White House charge for healthcare reform were it not for his tax problems).

And another former staffer who remains close to him is Jim Messina, now Obama’s deputy chief of staff. Messina served as Baucus’ chief of staff from 2005 to 2008.

“He is obsessed” about healthcare reform, Messina recently told Politico. “He has a bee in his bonnet.”

Some close to him suggest that a spate recent health crises, from a motorcycle crash in Helena to the installation of a pacemaker in his heart, brought home the importance of the issue.

A fifth-generation heir to a Montana ranching fortune, Baucus is an unlikely leader of the cause. He is the great grandson of Henry Sieben whose huge ranch was the location of the movie, A River Runs Through It. He grew up on a 125,000-acre ranch near Helena, graduated from college and law school at Stanford, being winning a close congressional race in 1974. Four years later, he was elected to the Senate.

He still keeps a sign on the desk in his Senate office that declares “Montana Comes First,” and Baucus’ concern for holding on to his seat in a once traditionally Republican state helps explain why he has so often broken from his party.

“Sen. Baucus really understands the historic significance of this issue,” Richard Kirsch, campaign manager for Health Care for America Now, a coalition of liberal organizations, told Politico. “At the same time, he has an orientation toward doing bipartisan work. And at some point, those two different tendencies are going to collide. Because in order to change the health care system, we have to make the big changes that do not lend themselves to bipartisanship if Republicans are going to take traditional ideological or industry-centered views.”

Ezra Klein posed the question more baldly in a profile in the American Prospect.

“Over the next two years, Max Baucus could prove a progressive legislative giant. Or he could be Bad Max.”

© 2009 Muckety.com