House and Senate Democrats on Thursday assailed a bipartisan Senate effort to provide retroactive immunity for telephone companies that cooperated in the Bush administration’s warrantless wiretapping program, signaling a looming battle over domestic spying that could split the Democratic Caucus.

The strong reaction highlights the tightrope that Democrats are walking as they try to amend the 1978 Foreign Intelligence Surveillance Act (FISA). Their challenge is to update the eavesdropping legislation while avoiding another angry backlash from the left, which erupted after enough Democrats sided with the GOP to pass an interim bill in August that gave the administration sweeping new foreign-intelligence surveillance powers.

The deal, reached Wednesday by the leaders of the Intelligence panel and the Bush administration, would attempt to resolve one of the thorniest issues in the debate over the spying program. Telephone companies would face no penalty as long as they proved to courts that they were participating in the program lawfully. In return, Democrats would ensure that the secret FISA court would review the administration’s procedures for warrantless surveillance.

Republicans have argued that carriers should not be hit with lawsuits because they were carrying through with a national security request authorized by the government.

“Immunity for the telecom companies makes sense because they were just doing what they were asked,” said Sen. Lindsey Graham (R-S.C.), who sits on the Judiciary Committee.

But critics say that if the companies were truly acting within the law and had authorization from the Department of Justice, blanket immunity would not be needed.

More broadly, many Democrats in both chambers have said they will not consider immunity language until they see documents of the government’s surveillance program. The White House finally relinquished on Wednesday some of those papers to the Senate negotiators, Intelligence Chairman Jay Rockefeller (D-W.Va.) and Vice Chairman Kit Bond (R-Mo.).

When reports of the deal broke Thursday, liberal Democrats in both chambers promptly excoriated the plan.

Sen. Chris Dodd, the Democrat from Connecticut who is running for president, placed a hold on the bill over his objections to the immunity provision. He said he would prevent the measure from coming to the floor because of what he said was “amnesty” for telecommunications firms.

“I said that I would do everything I could to stop this bill from passing, and I have,” Dodd said in a statement to supporters of his candidacy.

Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) also condemned the deal, warning that the Intelligence Committee was “about to cave on this.”

His panel will take up the bill next week. The Intelligence Committee was expected to finish its closed-door markup of the bill after press time Thursday.

“[Administration officials] know that it was illegal conduct and that there is no saving grace for the president to say, ‘Well, I was acting with authority,’ ” said Leahy. “Otherwise, there wouldn’t be so much pressure on us to immunize illegal conduct by either people acting within our government or within the private industry.”

Leahy’s remarks came during the second day of confirmation hearings for Bush’s choice for the next attorney general, Michael Mukasey. Unlike the first hearing, Thursday’s session was contentious, as Democrats rebuked Mukasey’s views on executive power, torture methods and domestic spying.

Leahy said Mukasey’s interpretation of FISA had “a loophole big enough to drive a truck” through because the nominee indicated that Bush was not acting illegally by going beyond that statute in authorizing eavesdropping without court warrants.

Whether the president is acting illegally “would have to depend on whether what goes outside the statute nonetheless lies within the authority of the president to defend the country,” Mukasey said.

Still, Democrats signaled that Mukasey would almost certainly be confirmed.

For their part, Senate Democratic leaders were cautious about the Intelligence Committee’s deal. Majority Leader Harry Reid (D-Nev.) said he spoke with Rockefeller Wednesday night, but said he would withhold his support until seeing the White House documents that could explain why such immunity would be needed. Aside from the Senate Intelligence panel, no other lawmakers, including those in leadership or on the Judiciary panels, have seen the documents.

“I have to see what papers they’ve seen [to know whether] there may be justification for it — at this stage I don’t know what that would be,” Reid said.

Majority Whip Dick Durbin (D-Ill.) also said he would insist on seeing the documents before backing such a plan.
Sen. Arlen Specter (R-Pa.), the Judiciary Committee’s ranking member, echoed the leaders’ remarks: “I’m not in favor of [immunity] unless we find out what it was they did.”

Sen. Dianne Feinstein (D-Calif.), a swing vote on both the Judiciary and Intelligence committees, said it was “good news” that the bill was done in a bipartisan manner. But without offering details, she said she still had concerns. Likewise, Rhode Island Democrat Sheldon Whitehouse, who sits on both panels, said he wanted to make changes to the measure, but would not say what they were.

House Democrats reacted more strongly.

Rep. Jerrold Nadler (D-N.Y.), who chairs Judiciary’s Constitution subcommittee, said: “It would be irresponsible to grant retroactive immunity for a program we know so little about.”

Another House Judiciary Democrat, Rep. Sheila Jackson Lee of Texas, said she didn’t want “fear to be the cause of our action” and added it was the “wrong direction” to move toward retroactive immunity.

A Judiciary spokeswoman said Chairman John Conyers Jr. (D) of Michigan “has not seen any information about why retroactive immunity is needed — despite repeated requests for the information.”