Senate Minority Leader Harry Reid (D-Nev.) has decided to entrust Sen. Max Baucus (Mont.) with the role of lead Democratic negotiator on any bill to revamp Social Security, despite the sometimes testy relationship between the Montana Democrat and Reid’s predecessor.

In a meeting two weeks ago between the two, Reid secured a commitment from Baucus to work more closely with the Democratic Caucus than he has in the past on issues which Democrats have traditionally enjoyed an advantage on but many in the party fear President Bush is seeking to co-opt, according to several Senate Democratic sources.

Though Baucus might be regarded as the natural point man on Social Security given the fact that he is the ranking member on the Senate Finance Committee, he often sparred with former Senate Minority Leader Tom Daschle (D-S.D.) over Finance Committee matters, and Daschle often tried to prevent him from making deals with Republicans on taxes and entitlement programs. (Daschle lost his 2004 re-election bid and was succeeded in the leader position by Reid.)

In addition, Baucus often ran afoul of the broader Democratic Caucus, particularly when he defied his colleagues by working with Republicans in 2003 on a Medicare prescription drug bill, while other, more liberal Democrats were barred from negotiations.

Senate Democratic sources said the agreement between the two was easily reached because Reid and Baucus have always had a friendly relationship, as opposed to the sometimes confrontational relationship Baucus shared with Daschle. Some of those sources noted that Reid’s strength as a leader is in mending broken fences.

“There’s no doubt that Reid knows how to handle Baucus,” said one knowledgeable former Senate Democratic aide, adding that Baucus and Daschle “have a personal dislike for each other. … I don’t think [Baucus] started out trying to screw Tom Daschle, but ultimately, he was always against him.”

But when it comes to the so-called third rail of American politics — the country’s government-sponsored retirement system — even Reid wanted to make sure that Baucus would not wander too far off the reservation in working with the Bush administration and Congressional Republicans, sources said.

“It’s safe to say there’s an expectation that won’t happen this time,” said a senior Senate Democratic aide. “Members have expressed their desire for him to work closely with the caucus.”

Another Democratic source indicated that if Baucus does move too far into the Republican camp during negotiations, his high-profile role could be taken over by Reid or others in the Senate Democratic leadership, such as new Senate Minority Whip Dick Durbin (D-Ill.).

Still, Baucus said he doesn’t feel like his leadership or his Caucus has put him on a short leash, and he added that he’s pleased with Reid’s confidence in him.

“He believes in the committee system, and he wants ranking members to lead on issues under their jurisdiction,” Baucus said of the meeting.

Reid’s office declined to characterize the meeting.

On Social Security, Democrats may already feel more comfortable with Baucus than on other issues because of his stated opposition to what appears to be the central tenet of any Bush proposal — allowing workers to invest a portion of their Social Security funds in the stock market, which Democrats refer to as privatization.

“He’s not a big fan of private accounts. He’s not a big fan of benefit cuts,” explained one Baucus aide.

Baucus’ positions largely echo the sentiments of most other Democrats, such as Sen. Debbie Stabenow (D-Mich.).

“In this debate, our goal is to keep the security in Social Security, which means no privatization,” said Stabenow, who will take the lead in crafting the Democratic message efforts on Social Security.

But Baucus does differ in his overall strategy from the bulk of Democrats. He and other Democratic moderates are quietly signaling that they don’t necessarily agree with the rest of the Caucus on waiting for the White House to roll out a specific plan before Democrats decide whether to respond with their own legislative proposal.

In fact, the Baucus aide said the Montana Democrat would “spend the next month or so trying to get agreement and consensus” on another plan to shore up the Social Security trust fund. He’ll do that, the aide said, by working with the Senate Democratic Caucus “in small groups and individually” to come up with guiding principles.

Baucus has already responded to Republican entreaties on Social Security, though he doesn’t seem to be biting at their proposals just yet. Last Thursday, he joined a bipartisan group organized by Sen. Lindsey Graham (R-S.C.) to discuss Social Security proposals. The group included Senate Finance Chairman Chuck Grassley (R-Iowa) and moderate Democratic Sens. Blanche Lincoln (Ark.), Joe Lieberman (Conn.) and Ben Nelson (Neb.).

It is that willingness to reach across the aisle that has always bothered more liberal and partisan Senate Democrats, who have viewed Baucus as helping Republicans, and Bush in particular, to polish their traditionally poor public image on issues such as Social Security and Medicare.

But Baucus may not be the only moderate Democrat to cause some consternation among more liberal Democrats, who argue that Social Security does not yet need to be changed because the Congressional Budget Office projects it will remain solvent until at least 2052.

Sen. Tom Carper (D-Del.), for example, “is keeping an open mind about privatization,” said his spokesman Bill Ghent. Carper is working with the moderate Democratic group, The Third Way, on developing a proposal or a set of principles moderate Democrats should stick to during upcoming debate, Ghent said.

Similarly, Nelson said he doesn’t want to reject the president’s proposal outright.

“From my standpoint, I’m prepared to listen, and I don’t think that should cause anybody heartburn,” Nelson said.

Over in the House, moderate Rep. Earl Pomeroy (D-N.D.) said that Democrats are united in opposing anything that cuts benefits to retirees or other beneficiaries and that adds to the deficit. But he said they are not necessarily in agreement on whether to engage the administration on the debate.

“There are probably some [Democrats] who don’t want to work with this administration on anything. But most of us, I don’t think, are in that camp.”

Indeed, Bush administration officials are looking at moderate Democrats such as Pomeroy, Nelson and Carper, as the means to create at least the appearance of bipartisanship, especially since many Republicans already have expressed a reluctance to vote for a partisan Social Security overhaul because it could come back to haunt them in the 2006 midterm elections.

“The times require bipartisan action,” said Treasury Secretary John Snow, while underscoring that private accounts remain a critical “principle” for the president.

The potential for defections from moderates caused House Democrats to tap Rep. Sander Levin (D-Mich.) to replace the late Rep. Robert Matsui (D-Calif.) as ranking member on the House Ways and Means subcommittee on Social Security.

Key Democratic sources said House Minority Leader Nancy Pelosi (D-Calif.) last week spoke privately with Levin to urge him to take the slot. Those same sources said Levin, now ranking member on the trade subcommittee, was at first reluctant but later told Pelosi he would handle the job.

Leadership aides said Pelosi and several other prominent Democrats wanted to replace Matsui with a liberal standard-bearer who would hold fast to the party’s position on Social Security. The Minority Leader feared another more moderate ranking member — such as Rep. Ben Cardin (Md.), who is outranked on the panel by Levin — would be too willing to negotiate with Republicans and cede some ground to the majority.

Erin Billings and Ethan Wallison contributed to this report.