Specter Switch Raises Hopes for Card Check

Sen. Arlen Specter (D-PA) on Apr. 28, 2009. Specter announced that he is switching parties and will now be a Democrat. Chip Somodevilla/Getty Images

The AFL-CIO welcomed the Apr. 28 announcement that Senator Arlen Specter, the Republican moderate from Pennsylvania, would be crossing the aisle and joining the Democrats. But union supporters who hope that Specter's move would push ahead so-called card check legislation that would make it easier to hold union votes in the workplace may not be ready to celebrate yet.

That legislation—formally known at the Employee Free Choice Act—would replace secret ballots in union elections with the ability for workers to opt for union representation simply by signing a card. Card check is facing tough-going in the Senate, and Specter, who had supported an earlier version of the legislation, had been one of the Republicans targeted as a possible convert for the bill.

Now Specter's party switch—coupled with the apparent victory of Minnesota Democrat Al Franken in that state's contested Senate election—would give the Democrats the necessary 60-vote supermajority needed to impose cloture and end Senate filibusters. However, on Apr. 28, Specter reiterated that he would retain his independent streak, especially as regards card check.

"My change in party affiliation does not mean that I will be a party-line voter any more for the Democrats than I have been for the Republicans…," Specter said in the statement announcing his move to the Democrats. "I will not be an automatic 60th vote for cloture. For example, my position on Employee Free Choice [card check] will not change."

Secret Ballot May Survive

Still, observers say that a compromise on card check is more likely—perhaps by retaining a secret ballot but requiring companies to hold an election for a union shortly after workers indicate interest in one or increasing penalties for companies that delay union elections. While Specter has argued in the past that he's not ready for compromise, he comes from a pro-union state and he co-authored a law journal article exploring alternatives similar to some now on the table.

AFL-CIO Legislative Affairs Director Bill Samuel, in a statement posted on the organization's Web site, said: "We look forward to continuing an open and honest debate with Senator Specter about the issues that are important to Pennsylvania and America. We move forward with the understanding that America's workers support elected officials based on their positions on issues that matter to working people, not political affiliations."

Anne Mathias, director of research at Concept Capital's Washington Research Group, said Specter's switch "makes compromise on card check more likely. Labor has already backed down. What they want is easier unionization. It's not that they want the end to the secret elections. It's that they don't want employers to stall for six months, harass and intimidate the workers in the meantime."

Specter is moving to the Democrats because he is facing an extremely tough challenge in next year's GOP primary from a conservative opponent, and his moderate positions were increasingly at odds with the rightward drift of the party. Specter was one of just three Senate Republicans who in February voted for President Barack Obama's $838 billion stimulus plan, which narrowly passed. The three Republicans—Specter and Maine Senators Olympia Snowe and Susan Collins—were vilified by the Republican right following that vote.

The Mortgage Modification Issue

Another area that industry will be watching, given Specter's new political stripes, will be cramdown, or the measure that would let judges modify mortgage terms in bankruptcy court. Hotly opposed by most of the financial services industry, the bill has been languishing in the Senate for weeks as supporters have sought to hammer out a deal with several big banks.

Early on in Senate negotiations over the bill, Specter was one of a handful of moderate Republicans taking part. Since then, the talks have shrunk to several key Democrats. But a Senate staffer close to the talks says the Republicans—or former Republican, in Specter's case—remain key to actually getting to the 60 votes supporters will need. The measure's supporters hope Specter will have to worry less about the GOP base when considering the topic, but that's not a given.

"He's the kind of guy where you never know," the staffer says. "But he's clearly a guy who we would absolutely be reaching out to."

Brian Gardner, an analyst at Keefe, Bruyette & Woods (KBW), said in a report that expectations for major change in Washington may be overdone. "We do not think that Senator Specter's party switch alters the political landscape all that much, although there will undoubtedly be some concern among investors that this makes it easier for the Obama Administration to push more aggressively for a host of proposals," Gardner said. "The bottom line is that Senator Specter already voted with Democrats on many issues and we do not think that his voting pattern will change significantly."

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