Tim Dickinson - Rolling Stone

The Senate Caves

Democrats regained control of Congress by promising to stand up to Bush. So why does the Senate leadership keep rolling over without a fight?

TIM DICKINSON

Posted Jun 12, 2008

Every Democrat in the Senate likes to imagine himself as a friend of the middle class. But few take the delusion to the extremes of Chuck Schumer. In his book Positively American, the senator from New York writes in eerie detail of his decades-long, entirely imaginary friendship with Joe and Eileen Bailey, a nonexistent middle-class couple from Long Island who struggle to get by on $75,000 a year. So committed is Schumer to his phantom friends that he has even introduced them to Majority Leader Harry Reid, confessing that he speaks to them daily and would be consulting them on every decision he makes as chair of the Democratic Senatorial Campaign Committee.

"Chuck," Reid told him, "I wouldn't want it any other way."

But Schumer's love of his made-up friends in the middle class didn't stop him from championing one of the biggest tax breaks for billionaires in the history of the republic. Last year, Democrats in the House fought to close a loophole that levies a tax rate of only 15 percent — barely half what real-life versions of the Baileys pay — on hedge-fund managers who make as much as $3.7 billion a year. But when the debate reached the Senate, Schumer broke with his fellow Democrats and sided with Wall Street — inspiring the hedge-fund industry to hail him as its "guardian."

"America's middle class have been forgotten," says Rep. Charles Rangel, who led the hedge-fund tax in the House. "It seems that those with the money have the power."

In a recent interview with Reid in his opulently chandeliered suite in the Capitol, I ask why the Democrats had not used their majority in the Senate to close the hedge-fund loophole. He greets the question with dead silence. When he finally speaks, he tells me something I never thought I would hear from a Democrat: that it would be wrong to single out the nation's wealthiest investors simply because they are bilking the treasury out of billions.

"The only difference between hedge-fund operators and other folks similarly situated," Reid argues, "is that they make more money." He and Schumer would be "totally in favor" of taxing them, he adds — so long as the same tax rates were brought to bear on thousands of far less profitable business partnerships whose activities the tax break was intended to boost. The "fairness" stance appears reasonable, until you consider that Reid and Schumer used it to transform a modest tax reform — one co-sponsored by the ranking Republican on the Senate Finance Committee — into a far more sweeping measure that was easily blocked by the GOP minority in the Senate.

What Reid also failed to mention is that the real difference between hedge-fund billionaires and others "so situated" is that they are the ones underwriting efforts by the Democratic Senatorial Campaign Committee run by Schumer. According to campaign-finance records, seven of the country's 10 richest hedge-fund managers contributed an average of $24,400 to the DSCC last year. "Schumer didn't want to turn the spigot off," says Bob McIntyre, director of the nonpartisan Citizens for Tax Justice. All told, the hedge-fund and private-equity sectors have showered the Democrats with more than $14 million this year — double what they have given Republicans.

Schumer did not return repeated calls seeking comment from the Baileys.

As the hedge-fund fiasco demonstrates, Democrats have turned the Senate into the chamber where good legislation goes to die. Since regaining the majority in 2006, the Democrats have granted the Bush administration and big telephone companies immunity for illegal wiretapping, declared a branch of the Iranian military a terrorist organization and stuffed the recent Foreclosure Prevention Act with far more goodies for big lenders than for struggling homeowners. They also confirmed Attorney General Michael Mukasey despite his refusal to disavow torture — a move engineered by Schumer. "You really want to like the Democrats," says Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington. "Then they go and do shit like this."

Under Reid's leadership, the approval rating of Congress has plunged to a record low — 18 percent. The problem, according to the majority leader, is that Democrats hold only a one-vote majority — and Senate rules give the GOP minority the right to a "silent filibuster" unless he can come up with a supermajority. "I can't do anything unless I get 60 votes," Reid tells me. The only solution, he insists, is to elect more Democrats this fall.

But Reid's allies in the House aren't buying that line. Rangel, chairman of the powerful Ways and Means Committee, is livid that the Senate caves in every time Republicans state their intention to block a key piece of legislation — including lower drug prices for Medicare patients.

"We've lost the power to negotiate if Democrats use the 60 votes as a reason to tell us they can't take opposition to a bill," Rangel says. "It's important for us as a party to demand that Republicans use the filibuster. I want to see the heart of the Democratic Party in the Senate." The message from Senate Democrats, he says, should be simple: "Damn it to hell, we stand for something. The Republicans are not going to hold us back." Rangel even goes so far as to accuse Democrats in the Senate of having fallen prey to Stockholm syndrome — emerging from their years in the minority with sympathy for their Republican captors. "They have an extremely cooperative working relationship," Rangel says.

Take the recent foreclosure bill, which Senate Democrats larded with $25 billion in corporate welfare, compared with just $9 billion for homeowners struggling to keep their homes. Sen. Debbie Stabenow, a Democrat from Michigan, sided with Sen. George Voinovich, a Republican from Ohio, to insert a massive tax break for Detroit automakers and U.S. airlines. Worse, the Senate handed billions in tax breaks to speculative home builders who helped create the disastrous housing bubble in the first place. Sen. Chris Dodd, the bill's original sponsor, took to the floor to berate his colleagues for piling on the goodies. "This is a housing bill!" he said. "This isn't a Christmas tree!"

The most vital protection for homeowners, meanwhile, was stripped without a fight. Sen. Dick Durbin, a Democrat from Illinois, gave up when he was unable to find 60 votes for a provision that would have allowed troubled homeowners to renegotiate the terms of their mortgages, a benefit that the wealthy already enjoy for their vacation homes. Reid — who makes much in his bio of his past as a boxer — even praised Durbin for ducking the fight. "He did that in an effort to move this along," Reid declared. "I want the record to be read with the fact that this is a fine legislator, a good human being." When I ask Reid about the bill, he shrugs. "We had to take what we could get," he says.

The bitter truth in the Senate is that it's not Republicans who are betraying the Democratic agenda — it's Democrats themselves. "It's not the Congress that's ineffective," says Rangel. "It's not the promises that Nancy Pelosi made. We have passed the courageous bills — but for what? To be told what's 'acceptable' by the Senate." These days, he adds bitterly, "We don't need no House of Representatives. All we need to do is go over and ask the Senate, 'What have you Democrats and Republicans agreed to?'"

Harry Reid has a hangdog face and eyes that droop behind his wire-rimmed spectacles. He sits across from me in front of a giant portrait of Samuel Clemens. Ask him about Mark Twain, and he's got the genial affect of a shopkeep at a general store. But when the conversation turns from 19th-century riverboating to 21st-century governance, Reid takes on a wearied slouch. He seems troubled by the responsibility of majority rule. After all, nobody really thought that the Senate Democrats were actually going to win in 2006. "The House was expected to get the majority, and we weren't," he says. "Surprised everyone."

Reid is not a "leader" in any traditional sense of the word. As speaker of the House, Nancy Pelosi can bend Democrats to her will — including the likes of Rep. John Dingell, the lifelong champion of automakers whom Pelosi has muzzled in the debate over global warming. She has even been able to bring conservative "blue dog" Democrats to heel, repeatedly garnering their support for a timeline for withdrawal from Iraq.

Reid, by contrast, is an enabler for Senate committee chairmen, whom he grants free rein over their fiefdoms. Indeed, he recently took to the Senate floor to criticize Pelosi for her "iron hand." His real strength, Reid says, is as the master of the Senate's arcane parliamentary protocols. "One reason I am the majority leader is people respect how I understand the procedures in the Senate," he says. "I don't mean to be boastful at all, but I know the rules really well." Which is perhaps why he is so adept at using them to shield himself from accountability for the Senate's failings.

Take the warrantless wiretap bill passed by Reid and Co. In the House, Pelosi defied the president — and the Senate — by refusing to hold a vote on the measure, which would have allowed the White House to spy on U.S. citizens without court approval. "The bill the Senate passed is really a disaster," Pelosi says. "With all due respect for my friends over there, it is a terrible bill." How then did it emerge from a Senate controlled by her own party? "You're going to have to ask them about it," she says.

The bill was terrible from its birth, the spawn of negotiations between Dick Cheney and Sen. Jay Rockefeller, chairman of the Senate Intelligence Committee. Reid insists that he bitterly opposed the bill, so I press him on why it ever made it to the floor of the Senate — especially given that the Judiciary Committee had introduced a competing measure that didn't bypass the courts. Reid's answer suggests that he values his precious Senate protocols over the Constitution. "Because of our rules," he says, "primary jurisdiction of this bill belonged to the Intelligence Committee." But couldn't Reid have used his discretionary powers as majority leader to call a vote on the alternate bill — particularly given that the rights of Americans were at stake? "I couldn't do that because it was wrong," Reid says. Besides, he adds, "the committee chairs would have been upset."

A look back at the Senate debate over the bill, however, reveals that Reid is not always the stickler for the rules he claims to be. Dodd, who made his opposition to the measure a centerpiece of his presidential bid, had placed a "hold" on the Rockefeller-Cheney bill — a parliamentary procedure that lets a single senator block debate. Reid, who routinely honors the holds used by archconservative Sen. Tom Coburn to block funding for breast cancer research and other bills, refused to honor Dodd's move. "A 'hold' is a word that's meaningless," he tells me.

Even some Republicans are bewildered by the failure of Senate Democrats to stand up to the White House. "When you see a headline like 'In The Senate, A White House Victory On Eavesdropping,' something is wrong," says Lincoln Chafee, a moderate Republican from Rhode Island who was ousted from the Senate in 2006 by voters who believed a Democratic majority would take on the Bush administration. "We threw out all these incumbents for a reason. But there's been no discernible change in direction."

Instead, Chafee says, Senate Democrats caved to Bush on wiretapping because they're still "skittish" about being tagged as soft on terror. Reid and the Democrats, he says, need to "draw a line on what's more sacred: short-term thinking about a possible terrorist attack, or the long-term ramifications of undoing our Constitution."

But what really made Chafee "drop my coffee" was the day Democrats led a 76-22 vote to declare the Iranian Revolutionary Guard — part of the Iranian government — a terrorist organization. "You have the new senators like Jim Webb warning Democrats that 'this is the last ticket we want to give Bush-Cheney' — an excuse to engage in Iran. And they did it anyway. Harry Reid was quoted as saying, 'We certainly don't want to be led down the path, slowly but surely, until we wind up with a situation like we have in Iraq. So I'm going to be very cautious.' And then votes 'aye'! He makes the exact linkage to Iraq, in which he voted 'aye' — and he does it again. That to me was beyond the pale."

If Reid nearly backed America into the disastrous wiretapping bill, Schumer is singularly responsible for the confirmation of Michael Mukasey as attorney general. A graduate of Harvard Law who has never held a job outside of elected office, Schumer was first elected to the Senate in 1998. Although he helped force Alberto Gonzales from office by hound-dogging the Bush administration on the U.S. attorney's scandal, he was quick to praise Mukasey as a "nominee who would put the rule of law first and show independence from the White House." (An odd claim considering that, as a judge, Mukasey sided with Bush on indefinitely detaining an American citizen as an "enemy combatant.") Schumer not only voted with the Republicans on the Judiciary Committee to bring Mukasey's nomination to the floor of the Senate, he voted against his own party to install Mukasey as attorney general. "But for Senator Schumer," says Chris Anders, legislative counsel for the ACLU, "Mukasey's nomination would have died."

Since taking office, Mukasey has steadfastly refused to initiate criminal investigations of those who justified or carried out torture. But his record as attorney general goes beyond covering up such abuses. In March, Mukasey disbanded the public-corruption office in Los Angeles in the midst of its investigation of Rep. Jerry Lewis, the former Republican appropriations chairman accused of doling out illicit pork to his cronies. Mukasey also denounced a call by the U.S. Sentencing Commission to reduce the inflated prison terms imposed on drug users, claiming it would flood America's streets with "the most serious and violent offenders in the federal system." Even more alarming, he has refused to say whether he has revoked a 2001 memo that suspended the Fourth Amendment, permitting the military to conduct unreasonable searches of American homes during wartime.

The Senate's mystifying refusal to stand and fight — even against the most unpopular lame-duck president of all time — has begun to spill over into the House. Nancy Pelosi may have become speaker of the House by promising an end to "blank checks" for Bush's war in Iraq, but she now says she has given up on her colleagues in the Senate. Although funding for the war is once again up for reauthorization, Pelosi is done asking her party to peg funding to a timeline for withdrawal.

"It's not going anyplace," she says sternly. "We know that. Every time we passed one of these bills with the conditions and the deadlines, the Senate did nothing. So I said to my members after the last time, 'I'm never going to ask you to vote for one of these bills again' — no matter how good it is."

Pelosi's surrender in the face of Reid's inaction means that President Bush will soon have another $170 billion to steer this war as he sees fit — perhaps even crashing it headlong into Iran — his course unchanged by a Democratic Congress that has meekly abdicated its constitutional responsibility to serve as a check on the executive branch. The simple truth is, the Senate's agenda is largely dictated by the Republican minority. Rather than force the GOP to go on record as opposing popular measures — such as revoking gratuitous tax breaks for Big Oil — the Democrats have backed down again and again without a fight.

Both Pelosi and Reid insist that the only hope for their rudderless majority is to bring more Democrats into the Senate. But the party isn't going to get a filibuster-proof majority in November, even if it is lucky enough to repeat its big gains from 2006. "Democrats are not going to get 60 votes," says Larry Sabato, a political scientist at the University of Virginia. "They're going to go up three, four, five, maybe six in the Senate — but they're not going to get 60 votes."

In reality, the Democrats have everything they need right now to assert their own agenda and put a stop to Bush's abuse of power — most important, the backing of a wide majority of Americans on issues ranging from the Iraq War to children's health care. But instead of scratching and fighting to make good on the promises that got them elected — or at the very least, turning up the heat of the obstructionism of the GOP minority — they continue to make excuses. Even Pelosi, who has pushed through a variety of bold measures, believes that change will have to wait for a new leader. At the end of my interview in the speaker's office, she tries to sell me on her vision for a "progressive consolidation" in Washington. It's a lovely future, full of funding for cancer research, alternative energy and investment in American infrastructure. But what she really needs, Pelosi says, is a friend in the White House. "Soon," she promises. "As we get a Democratic president, we have a very visionary, larger view of the world agenda."

But what if that day doesn't come? What if the Democrats fail to win the presidency in November? Will the majority in Congress continue to wimp out, giving the Republican minority free rein over America's future?

Sadly, the answer appears to be a resounding yes. With a slight wince, Pelosi offers up the scariest truth of all: an admission that her party has no Plan B.

"I don't know what I'm going to do," Pelosi says, "if we don't win the White House."