Republican Brown wins Massachusetts Senate race

By Robert Schroeder

WASHINGTON — In a victory that complicates President Barack Obama’s proposed overhaul of the… WASHINGTON — In a victory that complicates President Barack Obama’s proposed overhaul of the U.S. health-care system, Republican Scott Brown won Tuesday’s special Senate election in Massachusetts, defeating the state’s attorney general Martha Coakley.

The win by Brown, a previously obscure state senator, ends the Democrats’ 60-seat supermajority in the Senate and spells trouble for easy passage of a health-care bill, Obama’s top domestic priority.

The Associated Press projected Brown as the winner nearly an hour and a half after polling stations closed at 8 p.m. Eastern time.

Obama campaigned for Coakley in Massachusetts on Sunday, underscoring the White House’s intense interest in the race for the seat long held by Sen. Edward Kennedy.

Brown pulled ahead of Coakley in polls in recent days, setting Democrats’ nerves on edge and forcing leaders in Obama’s party to come up with alternative ways to push the health bill through Congress. A party needs 60 Senate seats to overcome filibusters and thus easily pass legislation.

Health-care legislation has passed the House and Senate, but a compromise bill has yet to make it through either chamber.

Aetna and other large insurance companies’ stocks rose along with the broader market Tuesday, as investors weighed the special Senate race.

Democrats vowed to press ahead with the legislation, no matter the outcome of the Massachusetts race. On Monday, House Speaker Nancy Pelosi, D-Calif., told reporters in San Francisco that “there is no ‘back to the drawing board.’ ” She said there will be a final bill “one way or the other.”

Congress could still pass the health-care bill and send it to President Obama. The House could simply approve the language of the bill that was approved 60-39 in the Senate, thus negating the need to have another vote in the Senate, where Brown — who publicly vowed to block the bill — would wield the decisive vote. Many House liberals, however, believe their version of the bill is superior.

On Tuesday, House Majority Leader Steny Hoyer said that the Senate’s health-care bill would be better than none at all. “The Senate bill clearly is better than nothing,” he told reporters. “I will make that point.”

Democrats could also attempt to pass the bill through a special process known as reconciliation that prohibits filibusters and only requires but a simple majority in the Senate.

There is even some talk of changing the filibuster rules.

Both the White House and labor unions poured money and political capital into the race, hoping to buoy Coakley’s chances and hang on to the Democrats’ power in the upper chamber.

The Service Employees International Union, meanwhile, put 300 volunteers into the field and spent $685,000 on a TV ad attacking Brown, according to The Wall Street Journal.

The special election to replace the late Ted Kennedy comes as Obama marks his first year in office. It also comes as the American public remains skeptical of the president’s proposed health-care overhaul. A new Washington Post-ABC News poll found that 44 percent of Americans support the proposed changes to the health-care system, but 51 percent oppose them.

Pollsters believe that Democrats are in danger of losing at least one Senate seat in November’s mid-term congressional elections, as well as several more seats in the House.

Voters are now evenly split over which party they hope will run Congress after the November elections, according to a new Wall Street Journal/NBC News poll released Tuesday.

Brown’s victory could also have an impact on proposed financial legislation. Brown has criticized the Obama administration’s so-called financial-crisis responsibility fee, which would be a charge on big banks with $50 billion or more in capital.

The fee, which would need congressional approval, would be used to cover the remaining costs of the $700 billion bank-bailout package as well as help reduce the deficit. Brown argues that the tax would be passed onto consumers in the form of higher fees.

“If Brown wins, we think one of the interpretations will be that opposition to the bank tax is not politically fatal,” said Keefe, Bruyette & Woods analyst Brian Gardner before the race was called. “If Coakley wins, then we think that the bank tax will be seen as politically popular.”

Brown’s win could also put additional pressure on Senate Banking Committee Chairman Christopher Dodd, D-Conn., to compromise with Republicans and produce a bipartisan piece of legislation.

Dodd is working with Sen. Richard Shelby, R-Ala., the panel’s ranking member, to release bipartisan legislation on bank reform. The two senators are debating whether to include an independent Consumer Financial Protection Agency to oversee mortgage and credit-card products.

Dodd would like to create such an agency, but he may be open to a compromise on it.


(MarketWatch’s Ronald D. Orol contributed to this report.)