Obama to Nominate Baucus as Next Ambassador to China

December 18, 2013 01:32 PM

via a special arrangement with Informa Economics, Inc.

Change could significantly impact timing of tax reform; timing of any extension to tax incentives like biodiesel

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

Sen. Max Baucus (D-Mont.) will be named by President Barack Obama to be the next ambassador to China, succeeding outgoing U.S. Ambassador Gary Locke.

Baucus, 72, has been working for more than 20 years to deepen the relationship between U.S. and China, and has visited China eight times. Baucus also has hosted Chinese diplomats in Washington and Montana for several trade delegations, including meetings with current President Xi Jinping, former Premier Wen Jiabao, former Vice Premier Wu Yi and the current Chinese Ambassador to the US Cui Tiankai. Sen. Orrin Hatch (R-Utah), the top Republican on the Finance Committee, said he understood that tapping Baucus for the key diplomatic post was a "done deal."

Baucus was a key architect of President Obama’s signature healthcare law and a champion of tax reform. He announced earlier this year that he would not seek a seventh term in 2014.

By leaving the Senate early, it allows Montana Gov. Brian Schweitzer (D) to fill the seat ahead of a difficult election fight in the conservative-leaning state. Montana’s current lieutenant governor, John Walsh (D), is expected to be appointed to Baucus's seat once the confirmation process is complete. That would allow Walsh, who was already seeking Baucus’s seat, to run as an incumbent.

Rep. Steve Daines (R-Mont.) had been leading Walsh in polls and is considered a strong candidate for the GOP.

Baucus has been the top Democrat on Finance, the committee that oversees trade issues, for a dozen years and has been on the panel since 1979. He helped to normalize trade relations with China and has been a frequent visitor to the country, but he has recently focus on and has been critical of Beijing’s currency policies.

As for the Finance Committee, Sen. Jay Rockefeller (D-W.Va.), currently chairing the Commerce Committee, is next in line to take over the Finance panel. But Rockefeller has said he will not run for reelection in 2014, and he has shown little interest in taking over the powerful committee. If so, that would give Sen. Ron Wyden (D-Ore.), currently the Energy and Natural Resources chairman, the chance to take the gavel. Under that scenario, Sen. Mary Landrieu (D-La.), a top GOP election target in 2014, could become chairwoman of the Energy panel. Wyden has shown interest in Finance panel-related issues, including tax reform and Medicare.

Importantly, Baucus’s exit would be a significant hurdle to his efforts with Camp to push comprehensive tax reform across the finish line. Hatch said, "The odds against getting tax reform done are pretty high right now. I don't think Senate Democrats want it and I'm not so sure the people in the House want to go through that right now," he said.

Baucus' early exit from Congress could also impact any extension of some expiring tax incentives, including the biodiesel tax incentive. Sen. Chuck Grassley (R-Iowa), who recently called to extend the biodiesel tax credit, has worked very closely with Baucus in the past, and will obviously miss Baucus' leadership and clout.

In the new farm bill debate, Baucus has worked closely with Senate Ag Chairwoman Debbie Stabenow (D-Mich.) in getting a farm-based revenue assistance program included in the measure.

Baucus would easily be approved by the Senate, and likely on an accelerated basis.

Comments: This development, as noted above, has a lot of implications for important topics -- the 2014 election; the powerful Finance Committee chairmanship; follow-on impact for who would lead the Energy panel; timing of tax reform and tax extenders; and the loss of still another lawmaker who at least showed he could compromise with the opposing party.


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.






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