Reid’s Gamble Dislodges Bill

Posted October 1, 2008 at 6:58pm

Majority Leader Harry Reid’s (D-Nev.) hasty decision this week to force a Senate vote on a stalled Wall Street rescue package might have single-handedly renewed confidence in his leadership and written a new epilogue to an otherwise unremarkable and highly partisan 110th Congress.

Strategically, Reid took a gamble in bringing the $700 billion measure to the floor so quickly after Monday’s surprising House defeat of a similar bill. But with help from Senate Minority Leader Mitch McConnell (R-Ky.), he was able give it new life and rebrand it as a prospective panacea for the economy. Additionally, Reid’s decision to attach the bill to a Senate-passed tax-extender package could have the side benefit of disposing of the tax issue that has stalled because of House-Senate disagreements.

Senators praised Reid’s decision to take over the process, saying that despite political jitters in the chamber, they needed to take the lead to ensure that near-frozen credit markets could begin to recover. And, they said, they couldn’t afford to wait for the House to find a way to revisit the issue after the stunning outcome earlier in the week.

“I believe we had an obligation to go forward and try to show the votes are here and hopefully the votes will be there in the House,” said Sen. Kent Conrad (D-N.D.), who helped negotiate the initial bailout agreement rejected by the House. “It provides momentum behind passage of something I believe is needed.”

Similarly, Sen. Bob Corker (R-Tenn.), an initial critic of the White House proposal, said he, too, believed Senate leaders did the right thing, having no choice after the legislation stalled across the Dome. Corker said he now feels “things are thawing” in the House, and that the Senate’s decision should help that process.

“I got e-mails from House Members suggesting that that’s what needs to occur,” he said.

Ultimately, though he didn’t operate in a vacuum, Reid might end up receiving much of the credit. If the House accepts the Senate bill Friday, the Majority Leader will have successfully put the measure back on track, with his version of the tax-extender package and a popular increase in the federal insurance cap on bank deposits. Plus, Reid, along with a bipartisan group of Senators, will probably be recognized for helping to redefine the bailout package as a rescue plan for Main Street rather than a golden parachute for Wall Street.

The Senate was poised to pass the bill at press time.

Caught in the hall Wednesday afternoon, Reid brushed aside any suggestion that he played the hand that forced Congressional passage of a financial plan: “I don’t talk about myself. I was trying to help get us in a position that was absolutely necessary. We couldn’t wait until next week.”

But it’s clear Reid expects that House Democratic leaders will be able to follow his lead and push the measure through with the votes of additional Republicans and Democrats. Earlier in the day, Reid said, “I would not have moved forward on this if I didn’t think the chance in the House was good.”

Reid’s decision hasn’t come without detractors, however. House Democrats in particular felt blindsided when the Senate decided to move forward before they could give the bill another try. Some of those Democrats — especially conservative and moderate Blue Dogs — were unnerved since Reid’s proposal requires them to accept the tax-extender provisions without offsets, an idea they have firmly opposed for the bulk of this year.

But by midday Wednesday, House Democratic leaders appeared cautiously optimistic that if the Senate passed the new package, they might be able to as well.

House Majority Leader Steny Hoyer (D-Md.) said that even though he was personally disappointed that the Senate added the tax extenders, he would try to pass the Senate package on Friday. Hoyer acknowledged that some Democrats would be upset either at the inclusion or exclusion of other economic stimulus items.

The Senate leadership’s strategic play this week came under a cloak of secrecy, put in place over several hours on Tuesday, and ultimately executed without advance warning. Few in Reid’s or McConnell’s inner circles even knew they had decided to make the move until moments before Reid went to the floor to hurriedly announce the deal.

A senior GOP leadership aide said the two Senators understood they had to work under the radar so as to not disrupt fragile negotiations. Reid and McConnell feared that by waiting any longer, Senators in their respective caucuses would want to add sweeteners to the newly crafted package, or that House leaders would ask for more time to overcome hurdles in their camps.

“The longer you keep the store open, the more people want to add something — it only decreases the odds of passage,” this aide explained.

It didn’t hurt that voter outrage over the House’s defeat was percolating up all day Tuesday as offices began hearing from newly irate constituents. What’s more, the finger-pointing had hit a fever pitch, further igniting a distressed public.

Reid’s determination to move forward was made in consultation with, but not the actual agreement of Speaker Nancy Pelosi (Calif.) and Hoyer, who according to House and Senate aides gave no assurances that they could move the number of votes needed for passage in that chamber. At least a dozen votes must be switched for the Senate version to best the House bill’s outcome.

Senate Majority Whip Dick Durbin (D-Ill.) put it mildly: “There were conversations with the House leaders and mixed feelings about our approach, but we just felt that we had to move forward.”

Key to Reid’s decision was that he had McConnell’s backing as well as the support of most of his rank and file. He and Durbin spent much of the early part of Tuesday calling Democratic Senators to gauge reaction to the plan. Those calls were both a whip operation on the fundamental bailout proposal and a barometer of what Senators would be willing to support in advance of the House.

Sen. Ben Nelson (D-Neb.) said Reid put it this way: “Here’s what we’re going to do. What do you think?” Nelson said he believed the Democratic leader came up with a way to push forward that “improves a bad bill,” and that by taking it up in the Senate first pursued the best option to get the process moving again.

“I’d prefer to go second because we’d like to see what the House would do, but we can’t do that,” Nelson said.

The decision marked a dramatic turning point for the Senate, which for much of the 110th Congress has been marked by partisanship and showdowns. Rarely have the two parties come together in overwhelming numbers to approve significant legislation, and when they have, it has been because one side capitulated.

In this case, Democrats and Republicans agreed to take the chance together. “The risk/ reward for us is pretty even,” one Republican Senate aide said.

Even President Bush, who has rarely had kind words for a man who called him a “liar” and a “loser,” praised Reid’s maneuver on Wednesday: “I appreciate Sen. Harry Reid’s leadership in the United States Senate when it comes to the financial rescue plan. … The bill has been improved.”

Reid’s lift might have been the most workable and possibly the only option for the Democratic majority.

Early on — even as partisanship shadowed the bailout proposal in the halls — Reid and McConnell worked on forging a deal whereby an equal number of Senators from each of their conferences would stand together and back whatever bill resulted. On Monday, at least 30 Republicans and 30 Democrats were on board — a number that ensured neither side would be blamed if the measure didn’t spark an economic recovery.

The reconfigured package might have negated the need for an all-for-one approach — even its freshest supporters have acknowledged its imperfections. As Senate Finance Chairman Max Baucus (D-Mont.) put it Wednesday: “The calculation is that there is no other choice. … None of us can have everything.”

John Stanton and Steven T. Dennis contributed to this report.