Down-Home Grassley May Upend Bush Plan

Sen. Charles E. Grassley (R-Iowa) is an improbable powerbroker. He farms corn and soybeans in his spare time. He speaks with a Midwestern drawl and wears off-the-rack suits. He is so frugal that he refuses the food at lunch meetings of Senate Republicans because he thinks it is too pricey.

But behind the down-home exterior is a shrewd politician who, as chairman of the Senate Finance Committee, wields more clout over the fate of President Bush’s domestic policy agenda than just about any other member of Congress.

And to the dismay of some, Grassley has been splashing cold water on some of Bush’s biggest initiatives, most of which have to roll through his panel. Grassley backs Bush’s economic growth plan, but he has said its cornerstone -- eliminating dividend taxes -- cannot pass the Senate without change. He has objected to a key element of a Medicare overhaul that is in the works. He has been noncommittal on proposed Medicaid reform.

Last week, after meeting with Bush, Grassley seemed chastened about his bouts of candor. “I think I should have kept my mouth shut,” he said.

But whether he speaks up or keeps quiet, Grassley is emblematic of a broader challenge facing the administration as it seeks approval of its domestic policies. Doubts have been expressed about the Medicare and tax initiatives by an unusual array of senior Republicans.

That’s in part because much of Bush’s agenda has been formulated with scant consultation with such congressional heavyweights as Grassley. Many Republicans, for instance, were blindsided by the sweeping nature of Bush’s call to end dividend taxes, as well as his recent plan to vastly expand tax-free savings accounts. What’s more, GOP lawmakers are still in the dark on the details of Bush’s plan to change Medicare.

“If they come to talk to us a little sooner, we can keep them out of trouble,” Grassley said.

A senior aide to another Senate committee chairman says, “Grassley is a good indicator of a fairly widespread sentiment in the Republican caucus that a lot of the administration’s proposals were ill-considered.”

But if anyone can help right the ship, Republicans say, it’s Grassley. A pragmatist who managed to build a bipartisan coalition for Bush’s 2001 tax cut, Grassley is better equipped than more ideological Republicans to pull in the crucial Democratic votes that the White House will need for its new proposals.

And while Grassley can be candid about administration policies, he is a sturdy ally when push comes to shove. “He’s a straight shooter,” said a White House official. “He’s blunt. But he couldn’t be more reliable.”

That is a source of some frustration to Democrats who like to hear Grassley raise questions about Bush’s policies, but do not expect him to break with the president on any major issues.

For Grassley, it’s a delicate balancing act, juggling his role as administration supporter with a reputation for independence that is important back home.

Grassley, 69, is a standout in a world of blow-dried politicians and well-dressed tax lobbyists. A onetime factory worker and lifelong farm resident, he still works weekends on the 710-acre grain farm that he shares with his son.

He traces his legendary tightness to his Depression-era roots in rural America. Even now, he ducks into a meeting of the Judiciary Committee because he can grab a free snack. He has an awkward demeanor that belies the fact that he has spent most of his adult life in politics. He was elected to the Iowa House at age 24. He won a U.S. House seat against a strong political tide in 1974, a landslide year for Democrats. He defeated incumbent Democratic Sen. John Culver in 1980. Early in his career in the Senate, Grassley was dubbed one of its “least intelligent” members by Washingtonian magazine. But his colleagues quickly learned otherwise.

“He is a very smart man who does that Iowa-pig-farmer stuff because it clearly works to his advantage,” said Jade West, a lobbyist who was a GOP Senate leadership aide until recently. “He is always underestimated.”

He is a populist with an independent streak, and built most of his early career on probes of government waste. Some prize finds: the now infamous $7,600 coffee maker bought by the Air Force, and the Pentagon’s $1,868 toilet seat cover.

He is a hero among whistle-blowers, who jam his phone lines with tips. Such calls recently led to a probe that has rankled Bush’s Department of Health and Human Services: Grassley called for a General Accounting Office probe of the management practices of the department’s inspector general, Janet Rehnquist, the daughter of Chief Justice William H. Rehnquist.

Grassley’s knack for populist theatrics was on display again last week when he held a high-profile hearing on Enron. With characteristic tub-thumping flourish, Grassley convened the Finance Committee hearing to showcase a new report on tax shelters that the company used and abused. “The report reads like a conspiracy novel, with some of the nation’s finest banks, accounting firms and attorneys working together to prop up the biggest corporate farce of this century,” he said.

He first became chairman of the Senate Finance Committee in 2001. The panel’s vast jurisdiction -- including taxation, health, Social Security, trade and welfare -- posed a challenge for Grassley to produce legislation, not just splashy investigative findings.

The bipartisan coalition he built for Bush’s $1.35-trillion tax cut in 2001 turned on his close ties to the panel’s senior Democrat, Sen. Max Baucus of Montana. He considered it so important to get Baucus on board that Grassley went to pains to stay in touch. Worried at one point that he would miss a Baucus phone call while he was on his tractor, Grassley set his cell phone on “vibrate” and put it under his hat.

Grassley lost the Finance chairmanship in mid-2001, when the now independent Sen. James M. Jeffords of Vermont left the GOP, giving control of the Senate to the Democrats. Grassley’s back in charge as a result of the GOP gains in the 2002 elections.

He acknowledged that building bipartisan backing on major Bush initiatives will be harder than it was two years ago -- in part because of the bitter 2002 campaign that saw Bush campaigning hard against Democrats who voted for the 2001 tax cut. “I prefer bipartisanship,” Grassley said, “but I think this time it’s a little more difficult.”

He will also have to resolve divisions within his own party -- and between the Senate and the House, where his tax-writing counterpart is House Ways and Means Chairman Bill Thomas (R-Bakersfield), a notoriously prickly and quick-tempered man. “He tolerates me,” Thomas said of Grassley.

Grassley’s role will be especially crucial in guiding Bush’s agenda because, while the House is typically disciplined about passing GOP proposals, the Senate is more narrowly split and freewheeling.

“Sen. Grassley plays an extremely important role, because he understands the reality of trying to get something through the Senate,” said Sen. Susan Collins (R-Maine), one of those who could stray on tax cuts. It was such Republicans as Collins that Grassley had in mind when he said Bush’s plan to eliminate the tax on dividends would not pass intact. He had already heard from enough GOP skeptics that it was clear to him the plan would have to be scaled back.

Still, he said after last week’s meeting with Bush that he did not mean to suggest he personally did not support the idea. “The dividend tax cut is good policy,” Grassley said. But he cautioned, “The Senate’s closely divided, so it’s a tough sell.”

He was restrained when Bush proposed revising Medicaid, the health-care program for the needy, by giving states more flexibility to set benefit and eligibility standards. “I’ll reserve judgment ... until I’ve had time to study it,” Grassley said.

He was more pointed when news leaked that Bush was planning an overhaul of Medicare that would make a new prescription-drug benefit available only to seniors who abandoned the program’s traditional “fee for service” system for a private managed-care plan. Grassley made it clear that any plan that did not provide drug benefits for people in the traditional program as well was a nonstarter.

“I won’t draw lines on drug coverage,” he said. “All seniors should have access to affordable prescription drug coverage.”