Competitive Johnson defies political currents

Undefeated.

That’s a point Sen. Tim Johnson makes more than once about his career, a stretch spanning more than three decades in state and federal politics. Republicans have tried to knock him off and failed. Not even John Thune – the “giant killer” – could vanquish Johnson.

“I must have done something right to have not been defeated over my 36 years that it will be at the end of my term,” he said.

That 36th year comes in 2014. It’s the next time Johnson will have an opportunity to take his undefeated record to voters. The question is, will he?

Johnson recently reflected on his past, present and future from his office in Washington, D.C. He has time to decide.

Johnson, who will turn 65 this year, could be entering the twilight of his career. Although the political climate can change rapidly these days, several signs point to the end of a political era – either through retirement or at the hands of voters.

Regardless, Johnson now is at the peak of his power, overseeing the Senate Committee on Banking, Housing and Urban Affairs as it ushers in sweeping new regulations on the banking industry – at a time of economic distress. The only other South Dakotan to head that committee was Peter Norbeck. Coincidentally, he was chairman at the onset of the Great Depression.

Norbeck, a two-term governor and three-term senator, is a dominant figure in the state’s political history. That he is even compared to Norbeck says much about Johnson’s career. Quietly, he has climbed the ladder to heights obtained by only a few in South Dakota history: Norbeck, Tom Daschle, George McGovern, Karl Mundt and Bill Janklow.

Ben Nesselhuf, the state Democratic chairman, offers a blunt assessment: Johnson is the most successful politician in state history.

Much has changed since Johnson won his first statewide campaign in 1986, claiming South Dakota’s seat in the House. For two decades, Johnson was a member of a Democratic circle that dominated federal politics in both South Dakota and North Dakota. Democrats routinely controlled five of the six federal offices in the Dakotas and, for a brief period in 2004, all six.

Now, with next year’s election, there’s a good chance that Johnson could be the last Democrat standing in the Dakotas. Voters rejected Reps. Stephanie Herseth Sandlin and Earl Pomeroy of North Dakota last year. North Dakota’s two longtime senators announced their retirements – Byron Dorgan last year, Kent Conrad next year.

“We were never destined to be there forever,” Dorgan said last week. “These things move on.”

The delegation of Dakota Democrats was tight – especially among the senators. They were united by issues – agriculture and highway funding among them – upon which the delegations collaborated. The senators and their spouses sometimes would dine together, Dorgan said.

Voters in the Dakotas always have had a conservative streak, Dorgan said. But they also are fiercely independent, willing to split their votes. Dorgan points out that he won his Senate seat in 1980, the same year Ronald Reagan won.

The emergence of fiscal hawks in the Dakotas – Thune, Rep. Kristi Noem in South Dakota and Sen. John Hoeven and Rep. Rick Berg in North Dakota – is troubling to Johnson. But the potential for Republican overreach also exists. Both states have aging populations, vast highway systems and dependence on agriculture – three areas where federal dollars play an important role.

“Both states have a lot at stake with respect to the federal government,” Dorgan said.

Johnson would be seeking a fourth term in the Senate. South Dakota voters have blessed only one person with four terms: Mundt. More frequently, political careers end wrecked on a fourth-term campaign: McGovern, Daschle and Larry Pressler.

‘Always … a real serious competitor’
Johnson acknowledges that the political culture is different now: “The pendulum swings back and forth,” he said. But there’s also an edge of defiance, or competitiveness in his tone. It’s the kind of mind-set that could lead him to run again.

That doesn’t surprise Dan Christopherson, who has known Johnson since grade school.

“He’s always been what I would call a real serious competitor,” said Christopherson, who served as Vermillion’s mayor from 2004-2010. “He’s been competitive in sports as well as academically all the years I’ve known him.”

During football scrimmages in high school, Johnson, a halfback, always played hard and was difficult to bring down, Christopherson said. In grade school, Johnson worked hard to accumulate an outstanding baseball card collection.

“He always had the better collection,” Christopherson said. “Not just better than mine, but better than most kids in our peer group. He really worked hard at it.”

Money may portend another Senate run
For now, Johnson appears to be preparing for re-election. He had $633,000 in cash on hand at the end of June. The Johnson, Heidepriem & Abdallah law firm is holding a fundraiser for him this week. Nesselhuf, who is attending the event, said he is operating under the premise that Johnson is running again.

“I think if Johnson decides to run, money won’t be an issue,” Nesselhuf said. “He’ll have everything he needs.”

His health also could be a factor. In his interview with two Argus Leader reporters recently, Johnson’s speech still was slurred, but it has improved over time since suffering a brain hemorrhage in late 2006. He did the interview without notes and easily answered questions on a range of topics.

Johnson overcame the health issue in 2008, winning easily in a year that was favorable to Democrats. But he also was limited in campaign appearances and leaned heavily on his reputation as a no-nonsense worker for South Dakota. Allies said he probably would be limited again if he runs in 2014.

Banking reform telling for Johnson
Johnson’s future also hinges on coming months in Washington. As banking chairman, Johnson is overseeing a vast Wall Street reform package, known as Dodd-Frank. The law was passed before Johnson became chairman, but much of its effect on the industry will be felt during the rule-making process, which he is overseeing.

It’s a process watched closely by the industry here. South Dakota has shed about 4,000 jobs in financial services, some of that a result of Dodd-Frank, some of it the result of the government takeover of the subsidized student loan program, and some of it because of the Card Act, which both Johnson and Thune voted against. It limits the fees credit card issuers can charge. Johnson agrees that Dodd-Frank led to some job losses in South Dakota, but he said the Card Act caused more.

“Don’t forget that we were under the worst economic downturn since the Great Depression,” he said. “It is the intention of the Wall Street reform bill to get things straightened out in terms of protecting the little guy.”

Curt Everson, president of the South Dakota Bankers Association, said Dodd-Frank adds another layer of regulation on banks, and the association has made its feelings known to Johnson, whom Everson described as “approachable.” Everson said he’s happy that Johnson is chairman. “We just don’t agree on everything all the time.”

To Everson, the main culprit in the downturn was the mortgage industry, and that industry hasn’t received the scrutiny that the banking industry has received. The government-backed mortgage giants Fannie Mae and Freddie Mac have had to be bailed out out by taxpayers – the largest bailout of any industry, and one that continues to worsen.

Johnson said his committee is moving to reform the mortgage industry but do so slowly for fear of upsetting the market. As banking reform takes shape, he said he’s looking out for the little guys in the industry.

“I’m sensitive mostly to the needs of community banks and credit unions and smaller entities,” he said. “I take a careful watch on them to see to it that small banks – which weren’t responsible for the downturn – aren’t treated so badly that they want to stay out of the banking business.”

Wary about changes to entitlements
Another major issue will be entitlement reform. It’s here that Johnson has drawn lines in the sand. The president has indicated a willingness to address entitlement spending as part of long-term plans to reduce deficits. Johnson has his own ideas about entitlement reform.

“I don’t know what the president means by entitlement reform,” he said. “The benefits of Social Security and Medicare and Medicaid ought to remain the same. If he means means testing, or efficiencies or waste, fraud and abuse, that is another story. But I’m not clear what the president wants to do.”

Johnson is willing to increase the amount of income subject to Social Security withholding, which is now capped at $110,000. Republicans argue that raising the cap is nothing more than a tax increase. It might leave Johnson vulnerable to charges that he raised taxes.

Johnson, the competitor, has a simple response: “So be it.”

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