The powerful Senate Finance Chairman Max Baucus (D-MT) announced yesterday he will retire from the Senate in 2014. While it was well known that Baucus faced a tough re-election in the moderate state of Montana, the announcement came as a surprise to many. According to the New York Times, Baucus has $5 million in his war chest. The Senator also broke with his party last week to vote against gun control legislation, a move that seemed to indicate an appeal for support from conservative voters in his state. Baucus and his staff had previously stated as recently as Friday that he would run for re-election.

With Baucus and House Ways and Means Committee Chairman Dave Camp (R-MI) leading tax reform in Congress, this announcement will affect potential reform in some way. Baucus may have increased freedom to reform the code without worrying about keeping support from Wall Street or at home. Due to term limits, Chairman Camp is also in his final two years as the leader of the Ways and Means Committee. These limitations may give Baucus and Camp the flexibility to focus all efforts on reform.

On the other hand, Baucus has limited pull in his own caucus. “Baucus versus the Caucus” was a catchphrase used throughout the years as the senator worked with republicans to pass the Bush-era tax cuts, along with other pieces of conservative legislation. He also has been a vocal critic of the Affordable Care Act, despite the major role he had in crafting the legislation. The Washington Post reported yesterday that Baucus has been at odds with Majority Leader Harry Reid (D-NV) and Charles Schumer (D-NY) over tax reform. The Post wrote, “Baucus has been willing to proceed with a plan that would eliminate loopholes and deductions to use that additional revenue for a broad-based lowering of corporate and personal tax rates.” Reid and Schumer favor using revenue to reduce the deficit.

The Hill reported this morning that Republican senators and lobbyists are more optimistic about tax reform after the Baucus announcement. The Senator himself said yesterday in light of the news, “I’ll have a lot more time and energy to do it since I don’t have to campaign.