Jumpin' Jiminy Jeffords

Until this morning, the only interest readers of TheStreet.com may have had in the career of Sen. James Jeffords of Vermont was purely trivial: Back when Adam Lashinsky was an infant journo, he was a tenant in the erstwhile Republican's Capitol Hill row house.

Today, however, Jeffords has burst into our consciousness the way Christina Aguilera burst on to the Top-40 charts. The question on investors' minds is, does this change everything?

Well, yes and no.

In the Senate, there are still 49 Republicans, most of whom are pretty hardcore, and there are still 50 fractious Democrats, several of who are given to siding with their Republican colleagues. And the Republicans continue to control the House of Representatives, the White House and executive branch. Jeffords' jump, for example, won't alter the hands-off posture the Ashcroft Justice Department seems to be taking toward Microsoft and Philip Morris.

With Jeffords having gone Independent, however, Democrats will now control Senate committees, the action on the Senate floor and, hence, the agenda. And that's the earth-shattering change here. In the Senate, the party that controls the process runs the show.

That doesn't mean that every Bush legislative initiative is dead. The year's most important bill, Bush's proposed tax cut, is in stable condition. Remember that 12 Democrats joined all 50 Senate Republicans (including Jeffords) in supporting the Senate's 11-year, $1.35 trillion tax cut yesterday. And the shift in control won't happen until after negotiations on the tax bill are wrapped up.

Once the tax bill is wrapped up, look for speed to decline to a glacial pace. Under the old regime, Democrats who wanted to stop legislation could use only the threat of a filibuster -- an undemocratic and unpopular move whereby a minority of 40 grinds the Senate to a halt. Now, however, Democrats in their committees will be able to silently deploy all sorts of neat tricks and parliamentary maneuvers to keep nominations, amendments and legislation bottled up.

So if you're making investments based on the swift appointment and confirmation of new judges or regulators who might make decisions that are friendly -- or unfriendly -- to certain stocks ... don't. Democrats are eager to wreak vengeance on the Republicans who stalled various Clinton appointments -- especially to the Judiciary.

Last week, energy stocks ramped up with the release of the Bush energy plan. I don't expect Halliburton or Fluor or Duke Energy to retrace their paths just because Democrats will control the Senate again. After all, a good deal of the Bush energy agenda relies not on Congressional action but on executive branch action, such as relaxing regulations that govern new plant construction. To be sure, the roughnecks at Anadarko Petroleum who are sharpening drill bits that can cut through the arctic tundra might want to consider taking a long weekend. But most observers have already written off the prospect of drilling in the Arctic National Wildlife Reserve.

Reliant Energy and Enron should also rest easy. Yes, the newly reconstituted Senate Energy and Natural Resources Committee, under the chairmanship of Sen. Jeff Bingaman, D-N.M., might haul in corporate executives for some uncomfortable made-for-TV hearings on the California energy crisis. But even if Senate Democrats can ram through a measure calling for price caps on electricity for the western U.S., they don't have a veto-proof majority. And the Bushies are nothing if not loyal. The administration will not abandon its staunchest backers in their time of need.

Other legislation with an ability to affect companies adversely might have an easier path now. Ted Kennedy's, D.-Mass., Health, Education, Labor and Pensions Committee is far more likely to push through a patient's bill of rights that offends the sensibilities of both President Bush and the top executives at Aetna and UnitedHealth Group. And Bush, who thus far has avoided personal confrontation the way he has avoided New York City, is unlikely to brandish the veto pen for such a popular measure.

Finally, investors shouldn't look for any of President Bush's other pet proposals -- say privatizing Social Security or getting fast-track trade-negotiating authority -- to come to the floor anytime soon. As a tactician, Sen. Majority Leader Trent Lott, R.-Miss., was no Robert E. Lee. But he was a loyal soldier who was willing and able to shepherd Bush's agenda through the hazardous shoals of the amendment process. With Democrats at the helm, it will take a huge amount of finesse and negotiating for Bush just to get a piece of legislation reported out of a lowly subcommittee, let alone to the floor.

For the first several months of his presidency, President Bush seemed utterly unfazed by the way in which he won the election. Losing the popular vote, winning Florida in the courts and seeing the Republican majorities in Congress shrink simply didn't seem to alter his style or substance.

With Jeffords in no-man's land, that's got to change. And Bush may finally be learning that the only thing more excruciating than losing an extraordinarily close election is winning one.