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Why Mitch McConnell Really Matters

March 20, 2014, 2:59 PM UTC
Illustration: HelloVon

Let’s get this out of the way now: As far as big deals coming out of Washington, this year is already junked. With the midterm elections in view for jittery lawmakers, chances for a breakthrough on an immigration overhaul, a rewrite of the tax code, or a major jobs package have all but vanished. (Take a bow, partisans.) But we could wake up Nov. 5 with a very different political order. President Obama, at that point, would still have two years in the Oval Office to seal his legacy.

Certainly the President himself will help shape that future. Beyond that, however, Obama’s record is likely to depend on Republicans even more than on members of his own party. And that means that what the federal government regulates, taxes, and spends over the next several years could in large part hinge on the actions of just one 72-year-old Southerner: Mitch McConnell. Assuming he’s still in office.

Which brings us squarely to the right now.

Tantalizingly close to achieving his career ambition of seizing control of the Senate, the Kentucky Republican is also as close as he’s been during five terms in the chamber to being sent packing. The Senate minority leader faces battles on both flanks: on the right, with a primary challenge from multimillionaire investor Matt Bevin; on the left, with a general-election cage match that’s already neck and jowl. (As of presstime, Democratic frontrunner Alison Lundergan Grimes, Kentucky’s 35-year-old secretary of state, was slightly ahead in the polls.) Handicappers expect that the candidates and outside groups will spend more than $100 million on the race, much of it coming from outside the state.

McConnell, for his part, declines to discuss the current election in any detail. “I tend not to advertise campaign strategy,” he tells Fortune. “I’d rather surprise my opponents than inform them in advance.”

The battle royal would be heady enough for any politician. But the stakes, in this case, are larger than they may seem: The future of the Republican Party could well be settled in the bargain. The same goes, as we said, for what legislation emerges from the federal government in the remaining years of the Obama presidency. That is what makes the next seven months so critical, and it’s why so many lobbyists, politicos, and business leaders are nervously eyeing an electoral mudfest in the tiny Bluegrass State.

If McConnell can fend off his conservative challenger on May 20, guide four of his fellow incumbents through a thicket of Tea Party primary challenges, and survive the November election — a difficult hat trick — he is likely to emerge as the one Washington Republican who can return the Grand Old Party to the grand old political center and put an end to Tea Party extremism.

“Anybody around town who’d like to have a more pro-business, pro-free enterprise government, the only thing they can do about that between now and 2016 is change the Senate,” McConnell says. “Because the one thing virtually every Republican has in common from Maine to Texas is that we are essentially the party of the private sector.”

To hear the McConnell camp tell it, victory would give the senator the chance to forge a new Republican vision — to finally offer those much-promised legislative proposals for economic growth and reform that the party has so far been unwilling or unable to unite around. Defeat, on the other hand, would extend the muddle of the GOP’s internal squabbling and diminish its presidential hopes in 2016 and beyond.

The fact — how do we put this? — that McConnell is not naturally groomed for human contact makes this battle for the soul of the Republican Party all the harder to win. He is better suited for cloakroom fencing than campaign glad-handing and soaring rhetoric. And he’s awkward on the stump, shrugging off the retail exertions most voters expect of their pols. Says one Kentucky Republican operative: “He doesn’t kiss babies.” (Literally.) Nor, for that matter, is he adept at the political stunt: When McConnell stood onstage at the annual Conservative Political Action Conference (CPAC) meeting in March waving a flintlock musket over his head as a show of his support for gun rights, the senator was roundly mocked. His hometown newspaper likened the move to Michael Dukakis’s infamous, campaign-crushing ride in a tank in 1988. Following that came an ill-thought campaign video that features a wordless, smiling McConnell — which The Daily Show’s Jon Stewart rapidly transformed into an Internet meme he dubbed McConnelling. (The 2½ minutes of gauzy footage fits, uncannily, with any musical accompaniment, from rap to opera.) Throw in a couple of Kentucky polls showing that some 60% of McConnell’s own constituents disapprove of the job he’s doing, and the senator looks yet more vulnerable.

Of all the people who think McConnell can pull off a win, though, no one is more of a true believer than McConnell himself. As he once told an associate, “It’s amazing what you can do when your back’s against the wall.”

For the past five years the Senate’s top Republican has been against the wall more than he’s been on top of it. In November 2008, an election year that swept a barrier-breaking dynamo of the opposite party into the White House and pumped Democratic numbers in the chamber to 59 (and soon after, a filibuster-proof 60), McConnell barely eked out a win. In the closing weeks of the campaign, some in his own campaign thought he would surely lose.

When his shell-shocked Republican troops returned to Washington, the question wasn’t whether they would fold but in what manner and how soon. McConnell’s instinct was to brawl. That month, before the health care reform that would become Obama’s signature domestic achievement had even taken draft form, the Kentuckian began plotting the Republican response. He convened the first of what became weekly Wednesday afternoon huddles in the walnut-paneled Mansfield Room, steps from the Senate floor, to rally his ranks. His message to members: “We have strength in numbers, and the only way we’re going to make it through this debate is if we hang together.”

A Senate conference is not an easy thing to command, but McConnell knew how to work a soft touch. By then he had spent the better part of four decades mastering the rarefied institution, first as an aide, then as a senator — a victory he’d pulled off in the 1984 election, thanks in part to the help of Roger Ailes, the future Fox News chief, who had run the campaign’s media strategy. McConnell had grown over the years into a canny operator, someone who knew what each colleague wanted, needed more of, and feared the most. And he had a rich cadre of politically savvy people in his inner circle. McConnell’s wife, Elaine Chao, the daughter of a Chinese-born shipping magnate, had served in George W. Bush’s cabinet as labor secretary and by 2009 was ensconced at the Heritage Foundation, an influential conservative think tank.

McConnell began by getting members up to speed on the substance of health care reform, a subject that historically favored Democrats by a wide margin. While the debate unfolded, McConnell sought to drag it out, betting that the longer the legislative process took, the more public support would sour. Meanwhile, the weekly meetings helped bring back into the fold the handful of Republicans who seemed willing, initially, to negotiate across the aisle. McConnell, meanwhile, kept a constant watch on his members, following a disciplined vote-counting practice he developed in his first campaign, when as a candidate for president of his high school student body he deputized a kid in each clique (the cheerleaders, the basketball team, etc.) to tally and rally support among their friends.

The strategy worked. When the bill came up for a vote on Dec. 24, 2009, not a single Senate Republican backed it.

That this speaks as well to McConnell’s (and many of his fellow Republicans’) obstructionism is hard to miss. After all, it appears that the effort to kill the bill began before there even was one. Megan Hauck, then McConnell’s health policy adviser, explains that her boss “knew from the beginning that, personally, the Democrats in the Senate and the administration weren’t going to propose something he was going to be comfortable with.”

McConnell disputes that he did anything other than convene his members and prepare them for the looming debate. “We weren’t quite sure what the Obamacare proposal was going to be in November 2008,” he says. “My job is to get our members together and discuss the way forward. It was a pretty grim election, and our ability to affect policy was going to be quite minimal for the next two years.”

But the episode also speaks to why McConnell’s Republican colleagues are so eager for him to win reelection. Outside the corridors of Capitol Hill, McConnell can seem an uneasy campaigner. Inside them, McConnell is a seasoned political warrior, a wily tactician — the Sun Tzu of the Senate.

It’s not yet clear what judgment voters will render on Obamacare in the midterm elections in November, but for now McConnell’s strategy seems to have paid off. (One early sign: The Republican House win in the Florida special election in March was due in part to concerns over the health care law.) In denying Democrats even a jot of Republican co-authorship, the GOP has thrust the law wholly into the Democrats’ hands, and that includes Healthcare.gov’s embarrassing rollout, a fiasco damaging enough to undo the wounds Republicans self-inflicted in the government shutdown.

With Republicans deeply in the minority, McConnell likewise couldn’t muster the numbers to block the Dodd-Frank reforms of Wall Street. But he could use his mastery of the chamber’s byways, honed during his chairmanship of the Senate Rules Committee and years of running floor operations as his party’s whip, to work the margins. As the Senate debate neared in late 2009, McConnell attended a fundraising dinner in New York with a clutch of financial services executives. There, Robert Henrikson, then CEO of MetLife, told the senator of his concerns about a provision in the proposed bill that would prohibit a hedging strategy important to the firm.

McConnell, according to someone who witnessed the exchange, told Henrikson to take the problem to then-senator Ben Nelson, a conservative Democrat from Nebraska facing long odds of reelection. “Ben Nelson is under the illusion he can get reelected in 2012,” McConnell told Henrikson, adding that Nelson would have to act like a Republican in order to win — and that Senate Majority Leader Harry Reid (D-Nev.) would have to let him. Furthermore, as a former state insurance commissioner, Nelson would understand the issue and be able to sell it. McConnell’s only stipulation, according to the source: “Don’t let Nelson know I told you to go to him.”

As McConnell hustled to hold his squad together after the 2008 rout, a bigger force was gathering to tear Republicans apart. For all his tactical talent, McConnell was blind-sided by the Tea Party revolution that remade the political landscape in Kentucky and across America. The state party operation McConnell built from scratch (its headquarters in Frankfort, Ky., bear his name) proved deceptively vulnerable. And it took the shock of an insurgent’s come-from-nowhere victory in the Bluegrass State’s 2010 Republican Senate primary to deliver the message.

Heading into those elections, McConnell helped engineer the retirement of Republican Sen. Jim Bunning and cleared the way for Trey Grayson, an affable, Harvard-educated secretary of state. But Grayson drew a challenge from a newcomer, a country ophthalmologist named Rand Paul, who happened to be the son of libertarian hero and perennial presidential hopeful Ron Paul. Amid rising anti-incumbent rage, Rand keenly promoted his outsider status.

Paul also had the backing of a group called the Senate Conservatives Fund, founded by McConnell nemesis and former South Carolina Sen. Jim DeMint to promote maximally conservative candidates in Republican primaries. Two weeks before the election, McConnell appeared in a rare, direct-to-camera TV spot endorsing Grayson — an attempt to blunt Paul’s momentum. But nobody in his camp was prepared for the outcome: Turnout in the off-year primary was nearly double what the Grayson campaign anticipated, as Paul piled up an eye-popping 23-point margin across the state. “We didn’t ask the right questions,” Grayson says. “We didn’t do a good job peeling back the anger toward the establishment and Washington.”

Indeed, it wasn’t just the margin that should have braced McConnell. Paul had successfully co-opted the ancient us-vs.-them formula that McConnell had used against Democratic opponents, painting them as tools of East Coast elites. But in Paul’s version, the “them” included the entire moneyed establishment machine that had lifted McConnell up the leadership ladder in Washington.

McConnell had been through too many battles not to recognize a skilled political warrior when he saw one. In a congratulatory phone call the night of Paul’s primary victory, McConnell pledged his support to the newcomer for the general election campaign. Since then, the two have formed a solid working relationship — a partnership based on mutual need: Paul could use legislative heft in advance of a potential 2016 presidential bid, and McConnell needs some home-state cred with the new right wing.

Yet the force that brought Paul to Washington is the same one that McConnell must quash if he is to bring the Grand Old Party back to its business-cozy, noninflammatory comfort zone.

It won’t be easy. Paul and the new crop of hardliners have pushed the party’s center of gravity away from the middle. So far, the burden has been on McConnell to follow. Kentucky’s senior senator endorsed his junior colleague’s bid to legalize industrial hemp (seriously), joined his filibuster protesting the administration’s drone policy, and even embraced Ron and Rand Paul’s “Audit the Fed” campaign. More significant has been Paul’s and his fellow Tea Partiers’ demand that the party disown the practice of earmarking (tucking money for home-state projects into spending bills). The issue had been simmering since conservative deficit hawks began calling out the Republican profligacy of the Bush era. But the Tea Party wave forced it to a head.

As an appropriator from a poor state, McConnell for years had used his earmarks to demonstrate that he was delivering for Kentucky. He fought an outright ban on the practice but was forced to concede. Meanwhile, back home, McConnell has hired Jesse Benton — Paul’s once and likely future political chief, as well as his nephew by marriage — to run his reelection campaign. Benton is building a grass-roots structure for McConnell across the state that already includes nearly 3,000 precinct captains, a bid to ensure that the senator isn’t caught flatfooted again.

These sidesteps, large and small, have closed the ideological distance between McConnell and the insurgents, converting former foes into boosters of the Republican leader. One is Joe Ricketts, the billionaire founder of TD Ameritrade, who spent $1.3 million in the 2010 elections to publicly shame earmarking “hooligans” in Congress and honor the “heroes” fighting to zero them out. McConnell had made the list of “hooligans.” But the two met frequently to discuss the issue and developed a friendship that has strengthened into an alliance.

Months after the earmark ban took effect, Ricketts and his wife joined McConnell and his wife as their guests at the Kentucky Derby in 2011. A source close to Ricketts says the billionaire now sees reelecting McConnell, along with handing him control of the Senate, as a top priority for the roughly $4 million Ricketts plans to invest in 2014 races.

But while he has made room for Paul and made nice with Ricketts, McConnell’s accommodation has a limit. That threshold was reached, it seems, last summer, after a handful of outside groups boxed congressional Republicans into the disastrous government shutdown (ostensibly in an attempt to defund Obamacare).

After some two weeks of government shutdown, with Republican poll numbers crashing through the floor and with the GOP in danger of forfeiting its most significant win against the White House in the form of the McConnell-negotiated sequester spending cuts, the Kentuckian finally stepped in. He struck a deal with Majority Leader Reid to reopen the government.

The existential threat posed by an unchecked Tea Party became suddenly clear. “You could sort of see it happening in slow motion, notwithstanding efforts by leadership to try to deflect it or push it back,” says Steven Law, a former McConnell chief of staff who became a top U.S. Chamber of Commerce official before landing at American Crossroads, the Karl Rove-founded Super PAC, which now aims to usher more moderate Republican nominees into the midterms. “It’s almost like the fever had to run its course and then break.”

Within the Republican coalition, the disaster was an eye-opener. In the face of strident antigovernment activism, McConnell and many of his colleagues had largely assumed a defensive crouch. Tea Party freshmen led by Ted Cruz of Texas made the most of the void. Now McConnell would have to reclaim the leadership of his Senate conference. In a tense, closed-door meeting of Senate Republicans at the start of the shutdown, McConnell demanded that Cruz say whether he’d disassociate himself from the Senate Conservatives Fund, which had been accusing Republican senators of supporting the President on health care. Cruz, according to people present, said he would not. Swiftly, however, the momentum shifted: At a meeting shortly thereafter Cruz volunteered to his colleagues that he had told the group it could no longer send fundraising solicitations under his name. (A spokesperson for Sen. Cruz declined to comment.)

McConnell stayed on the attack, sending out word that the National Republican Senatorial Committee, the conference’s campaign arm, was effectively blacklisting an outside consulting firm that had done work for the SCF — a move designed to send a shock wave of fear through the party’s vendor class. Says McConnell’s longtime friend Bill Stone, who is a party regular in Louisville: “Mitch has always been a believer in knocking them out, and when they’re down, putting your foot on their throat and not letting them up. The word’s out, buddy. If you’re a totally uncooperative asshole, you’re going to get it both ways.”

SCF executive director Matt Hoskins says his group wants Republicans to control the Senate, but “it needs to be a conservative majority or things won’t change. If the Senate is filled with more spineless Republicans, the debt will continue to climb and Obamacare will never be repealed.”

McConnell is also effective playing hardball with allies whose deep pockets keep Republicans in power. His team built a fundraising strategy around that strength in the run-up to the last two elections. They invited Republican lobbyists to dinner with McConnell in a private room at Carmine’s, a family-style Italian restaurant in downtown Washington, with no apparent price of admission. But after spaghetti and meatballs, McConnell thanked everyone for coming, told them he needed them to contribute the maximum allowable in personal money ($30,800 in 2012) to the National Republican Senatorial Committee, and then sat back and waited. What followed was a long, pained silence, one of McConnell’s preferred negotiating tools. Then, one after another, attendees acquiesced. Organizers called these “the sandbag dinners.”

But if McConnell makes it through his electoral gauntlet this year (along with the six-seat gain the GOP needs to retake the chamber), he’s made it clear he’ll seek to govern by consensus. With a razor-thin majority, he wouldn’t have much of a choice. That fact is adding urgency to the task of electing cooperative Republicans — a need underscored last month when Cruz forced McConnell to scramble for votes on a deal to lift the debt limit. “We’re going to have to govern,” says Josh Holmes, a top McConnell strategist. “And whatever we do as a majority frames the entire party going into the 2016 election. We’re not interested in having a dysfunctional majority beholden to a group that wants to blame Republicans for everything wrong in the world.”

Tea Party supporters, naturally, scoff at such a dismissive characterization. Some of these conservative rebels, they say, have brought not recklessness but rather new energy and policy innovation to a party that has long since lost the will (or courage) to champion fresh ideas. Utah’s Mike Lee, for example, is tackling tax reform, and Florida’s Marco Rubio is pushing far-reaching changes to social safety-net programs. Their confrontation with the ruling class of the party, moreover, is as much generational as it is ideological. McConnell, the 30-year incumbent, presides in a Senate that is the third-least experienced since 1955, with 46 members serving in their first term. The newcomers see no virtue in honoring the institution’s hidebound folkways; that’s what got us into this mess in the first place.

By that stark analysis, it is McConnell and his cohort, not the Tea Party, who are on the wrong side of the trend line — and possibly the wrong side of history. After a half-century in Kentucky politics, McConnell has just months now to prove that isn’t true.

It’s a dismal, rainy morning in the eastern Kentucky coal town of Pikeville when McConnell turns up for a pair of events billed as listening sessions. The first is in the town’s state-of-the-art medical school, built into the sheer mountainside that frames the western edge of town. In a room normally used for dissecting cadavers, McConnell convenes a meeting highlighting what he says is the Obama administration’s “war on coal.” On the way in, a rep for the U.S. Chamber of Commerce hands out fliers flogging the Environmental Protection Agency for staging its own hearings on power-plant carbon emissions everywhere but coal country.

McConnell’s message through two hours of testimony is clear: The Obama administration is singularly responsible for snuffing out the region’s livelihood. It’s a charge freighted with emotional power in an area the senator accurately describes as suffering a depression. Unemployment in some neighboring counties is as high as 30%. Though competition from a gusher of cheap natural gas has contributed heavily, at this event Washington Democrats own the blame. As he wraps up, McConnell makes the solution explicit: “Things can change in our country — that’s why we have elections,” he tells the crowd. “Winners of elections make policy. Losers of elections go home. So there is a recourse here, and the recourse is at the ballot box.”

After a lunch in the school cafeteria, McConnell heads across town to the Pikeville Medical Center. It’s an imposing black monolith that would look like a giant chunk of coal hewn from the curtain of mountain behind it if it weren’t for its rain-slicked obsidian sheen. The senator is here to conduct a “hospital town hall” event — his 58th in a series aimed at cataloguing the havoc he says Obamacare will wreak on health care providers across the state. Standing before two dozen hospital staff, he circles back to the argument he deployed earlier in the day, that “if the Senate did change, we could at least confront the President with some difficult choices.”

This is, in a nutshell, McConnell’s case for reelection: that as Kentucky’s heavyweight in Washington, he’ll thwart the assault liberals are waging not just on the health care system and the coal industry but, more broadly, on the state’s way of life. The companion to that rationale is that McConnell’s position allows him to get things done when the moment demands, as he demonstrated by negotiating with Democrats to reach agreements ending the four big budget standoffs.

It’s no secret to McConnell staffers, of course, that his greatest campaign asset — his incumbency — is also his greatest vulnerability. A December survey by Public Policy Polling, a Democratic firm, found that McConnell is the least popular senator in the country, with his approval rating underwater by 30 points. (Lately, even Obama, wildly unpopular in Kentucky, polls better.) McConnell strategists say this campaign will be mostly upbeat, but they acknowledge that that strategy doesn’t extend to rolling out what one derisively called a “10-point plan to save America.” “Campaigns are not races about ideas,” this insider said. “In a way that’s a shame, but you have to accept the reality of it.”

Instead, the Republican playbook is the same one the party used in the last two elections — running against Obama’s health care reform and economic program. The strategy brought them striking success in 2010 and vastly diminished returns in 2012.

Some Republican senators have been agitating for their conference to forge consensus on a legislative alternative to Obamacare as a testament to their seriousness of purpose. McConnell, interviewed in his leadership office inside the Capitol in December, dismisses the notion of a unified agenda, at least during the run-up to the 2014 elections. He says it’s enough for Republican Senate candidates, individually, to outline what they’d do in office. “This is not a presidential election,” he says. “This is a bunch of elections in different states.”

As to the question of when he and his party will develop a broad and substantive legislative platform to tackle the critical challenges America faces, McConnell has a ready answer as well: “If we’re in the majority,” he says, “we’ll be sitting down, intensely, a year from now on the very issue you’ve raised.”

This story is from the April 7, 2014 issue of Fortune.