Conservatives are urging Sen. Mitch McConnell to appoint one of their own to the Senate Finance Committee, hoping to counter Sen. Chuck Grassley’s (R-Iowa) tendency to compromise with Democrats.

Far-right voices in the party, on and off Capitol Hill, fear Grassley, the highest-ranking Republican on Finance, is prone to strike deals not to their liking on an array of issues.

Finance is considered the most powerful domestic policy-setting committee in the Senate, with jurisdiction over taxes, trade, healthcare and Social Security.

President-elect Obama and Sen. Max Baucus (D-Mont.), the committee chairman, would like to pass landmark healthcare reform and Grassley, one of the chamber’s foremost experts on healthcare, has a history of working with Baucus.

“There need to be conservative members of our caucus on that committee, there’s no question,” said Sen. Tom Coburn (R-Okla.), who cited upcoming debates on healthcare and taxes. “If you look at Medicare and Medicaid and nationalizing healthcare you’re talking about 60 percent of our economy handled by one committee.”

Grassley proudly boasts of his ability to forge bipartisan compromise.

“Every bill that has gotten out of committee except for one when I was chairman was a bipartisan bill and every bill that got out of committee when Sen. Baucus was chairman was a bipartisan bill,” said Grassley in an interview. “So over an eight-year period of time all but one bill was a bipartisan bill.”

Centrists on the committee have long caused Republican leaders heartburn. When Republicans controlled the chamber, an effort by GOP leaders to attach an estate tax cut to pension-overhaul legislation stalled because of opposition from Sen. Olympia Snowe (R-Maine). Sen. Gordon Smith (R-Ore.) was another member of Finance prone to side with Democrats on crucial votes.

There are two vacancies on Finance because Smith and Sen. John Sununu (R-N.H.), another member of the panel, lost reelection. Democrats are expected to cut one of the GOP seats on Finance to reflect the expanded majority in the chamber.

DeMint is chairman of the Senate Republican Steering Committee, a group organized for the purpose of advocating conservative principles within the GOP conference.

“I think there is concern that Sen. Grassley is more predisposed to compromising with Democrats and Baucus on tax issues and healthcare and other issues that will be important,” said Brian Darling, director of Senate relations at the Heritage Foundation, a conservative think tank. “It’s important to balance that off with somebody on the committee who can push the debate to the right.”

Some supply-side economic conservatives were dismayed when Grassley introduced a 2007 bill with Baucus to boost taxes for publicly traded equity firms. The legislation would have taxed publicly traded partnerships at nearly double their current rate.

“Chuck Grassley’s compromise on taxation on carried interest was horrible last year,” said Andrew Roth, director of government affairs at the Club for Growth, in reference to a proposed tax increase on the income of private equity and hedge fund managers. The fiscally conservative group advocates for lower taxes.

“We need someone who can tie an anchor at the fiscal-conservative end of this committee and I think Jim DeMint is the guy,” said Roth.

“Senate Republicans as a caucus are not as conservative as House Republicans. All eyes are going to be on them and Grassley in particular when it comes to taxes.”

A Grassley aide said Roth mischaracterized the proposed tax increase on publicly traded equity firms, noting the legislation would have closed a loophole benefiting some hedge funds but would not have amounted to a broad change of tax policy such as raising taxes on carried-interest income.