Why Harry Reid Yanked the Jobs Bill

Ever since Scott Brown's victory in the Massachusetts Senate race deprived Senate Democrats of their filibuster-proof majority, the White House has made no secret of its fervent desire that majority leader Harry Reid pass some kind of bipartisan legislation. So it was with a bit of fanfare that the White House welcomed Thursday a bipartisan Senate deal on $85 billion jobs legislation forged after weeks of negotiations between Senators Max Baucus, a Montana Democrat, and Chuck Grassley, an Iowa Republican. And it was to more than a bit of confusion that Reid hours later threw out the deal, replacing it with a stripped down $15 billion bill that would only provide scaled-back tax credits and help for small businesses, highway construction and state and local governments. "What happened?" gasped a collectively taken-aback Washington.

There are lots of conflicting answers to that question, from partisan rancor to internal Democratic politics to Reid's own electoral weakness. But the one thing everyone agrees upon is that Reid's announcement could have been handled better — so that the primary message coming out of the whiplash moves wasn't that Democrats are at odds with one another. "Maybe there should've been a better job reaching out to the White House," concedes Jim Manley, a senior adviser to Reid. Manley says Reid decided to pull the bill when he couldn't get an agreement from the Republican leadership to proceed despite the bipartisan backing of the bill. "Reid decided to simplify this process and put forth fully paid-for measures that have bipartisan support," Manley says.

The $15 billion bill would be the first in a series of smaller jobs measures Reid plans to roll out in the place of a single overarching one. The idea is to force Republicans to take a series of tough votes against generally popular measures like the tax cuts, extension of unemployment and health benefits, and popular business tax credits originally included in Baucus and Grassley's plan. To prevent GOP foot-dragging that has plagued Democratic measures all year, Reid prevented amendments from being filed to his stripped-down bill — a controversial move at a time when the White House is touting bipartisanship.

"It's an election year. This is to be expected," says a Republican Senate leadership aide. "Remember back in 2006 when [former majority leader] Bill Frist held all those votes where he didn't allow amendments on all those politically tough issues like gay marriage, the death tax and late-term abortion? A lot of good it did us — we lost the Senate. Democrats would do well to remember that example."

That's not the only historical parallel that Democrats are pondering these days. Reid is one of the most vulnerable incumbents up for re-election, and the last time a Democratic majority leader was staring down the barrel of incredibly bad poll numbers, South Dakota's Tom Daschle spent much of 2004 frozen like a deer in the headlights before losing. Reid, by contrast, has taken the lead on everything from health care to the jobs bill, but the scattershot processes he has overseen have only hurt his standing in his home state.

"This is definitely a problem for Reid in Nevada," says Eric Herzik, chair of the political-science department at the University of Nevada, Reno. "Reid was hurt when the health-insurance bill did not pass. He made several ugly deals to get it done which, polls show, were overwhelmingly disliked by Nevada voters. He made the deals and then ultimately didn't get the prize, something of a two-for-one loss. Now he has a jobs bill that rejects Republican input at a time when voters in the middle are fed up with the partisan gridlock in D.C." Though many of the provisions in the smaller bill are bipartisan — such as one that provided payroll tax breaks to companies with new hires co-authored by New York's Chuck Schumer, the No. 3 Senate Democrat, and Orrin Hatch, a Utah Republican — the process by which Reid yanked the bill made for a lot of bitter feelings. "To squander [the Baucus-Grassley bill] is partisan politics trumping everything else," Hatch told ABC News Friday.

While Reid's office says he pulled the Baucus-Grassley compromise because of opposition from GOP leaders, his left flank was also unhappy with the deal. Reid's No. 2, Senator Dick Durbin of Illinois, led a group of progressive Senators against the bill, saying it gave too much away to Republicans and focused too heavily on tax cuts that had little to do with job creation. "Durbin was just trying to curry favor with the liberals," says a senior Senate Democratic aide closely involved in the process. "Reid is hampered by Durbin and Schumer picking over his corpse right now — it's really ugly."

And though progressives welcomed the news, Reid's surprise was not exactly embraced by Dems across the board. House Speaker Nancy Pelosi reacted coolly, saying only that she "looks forward to reviewing the Senate proposal." The New York Times editorial board panned Reid's substitute bill as "pathetic" and "so puny as to be meaningless." Governors and mayors who were hoping for more money to ease their strained budgets were disappointed — even the Democratic ones. "It's a shock to us," Pennsylvania Governor Ed Rendell, a Democrat, told Fox News on Friday. "I mean, in the states we were all hoping to see a robust jobs bill, and we're confounded by this action, absolutely confounded." And fellow endangered incumbent, Senator Blanche Lincoln, an Arkansas Democrat, said in a press release that she hopes Reid "will reconsider. [The Baucus-Grassley] bill was carefully crafted to achieve significant bipartisan support."

Democrats still control the Senate by a historic margin, even if they're down a vote. But in an election year, their severely endangered leader risks going from a herder of cats to a cat in the herd — pushed and buffeted by too many competing forces. And nothing can pass the Senate — not a scaled-down $15 billion jobs bill or an $800-plus billion health care overhaul — by herd mentality.