John Mc Cain: In His Own Feisty Words

On the trail, the Presidential hopeful remains iconoclastic

On a chilly Sunday, Senator John McCain is zigzagging across New Hampshire like a cruise missile with a faulty guidance system. His motorcade--one minivan with a couple of McCain's former POW pals along for the ride--is on a mission, though: to boost the Arizonan's GOP Presidential bid by trumpeting his call for U.S. ground troops in Kosovo. "He knows it's a tough sell," says aide Howard Opinsky. "But it takes political will to stand up while other Republicans are hiding."

McCain's lonely stance is in keeping with his iconoclastic career. A feisty maverick, he has battled his own party over tobacco regulation, campaign-finance reform, and pork-barrel spending. Still, there's a method to McCain's maneuvers. He knows that if his visibility on the Balkan war gains him a hard look from voters, he could vault from long shot to contender.

Washington Bureau Chief Lee Walczak tagged along with McCain during his Apr. 18 sortie:

NOTE: What follows is an extended, online-only version of the Q&A that appears in the May 3, 1999, issue of Business Week.

Q: Isn't it ironic that in the short run, both Bill Clinton and John McCain, one of his foremost foreign-policy critics, are getting a public boost from the war in Kosovo?

A: In the short term both of us may have profited. But if he comes a cropper on this thing, the repercussions are serious. And in my case, I have not, honest-to-God, considered the political ramifications. If I do, I'm just like they are, gauging public opinion rather than what I think is right.

My role model is Harry Truman in June, 1952, not Bill Clinton in April, 1999. When I urge the President to consider ground troops, I take some responsibility for their losses. I don't take that lightly. And it's not clear what this [exposure] will do for John McCain in the long run, because this thing could be settled in two months -- and you know what the American people feel about foreign policy issues. I hope when Americans look at me they will look at my other positions as well. A lot of my spinners say "This is hot now." But in two months, people may not care any more than they care about Somalia.

Q: Your position on use of ground troops in Kosovo is still murky -- are you saying the troops should go in now, or later?

A: We not only have to do the planning, we have to be ready to have the armor and personnel and the support to move in. I'm willing to give the bombing another week or two. In Operation Desert Storm they bombed for 44 days...

Q: Is the President really foreclosing use of troops, or merely waiting to make sure there's public support before he moves?

A: It takes six weeks to two months to mass the forces, so you pay a huge price for dragging it out. Even if he says "O.K., you convinced me, the dog ate my homework" -- you've still got this delay.

Q: Let's talk about your domestic issues a bit. What has your tenure as Commerce Committee Chairman taught you about business?

A: The biggest thing I've grappled with is telecommunications issues -- they now dominate most of my thinking because they are so critical to the future. My first impulse is always the Hippocratic Oath: First do no harm. So I've tried my best to keep government out of it, to keep bureaucracies like the Federal Communications Commission -- which is geared to the 1930s -- from interfering. And I've tried to expedite the deregulation of the industry.

There's not one segment of the industry that I haven't angered over the last 10 years. Their job is to consolidate and monopolize. And my job is to see that there's as much competition as possible. Because I've been totally consistent as a deregulator, I've at least earned their respect.

Q: You weren't thrilled with the original telecom reform bill, and there is growing disappointment over the measure's inability to generate competition. Can anything be done about that?

A: The market and technology will take care of it over time. But at the same time, the special interests still rule in Washington, so we couldn't change in the bill. The people that wrote it are the ones resisting fundamental changes.

Q: Meaning the Baby Bells?

A: Actually, the Baby Bells have suffered the most from it due to their inability to get into long distance, whereas other segments of the industry have bought and merged into areas where they were prohibited from entering. That's the major impetus behind some of these mergers.

Q: You criticize high cable rates, but what would you do about the problem?

A: I want satellites to be competitive. The Satellite Home Viewers Act would allow satellites to broadcast local news, sports, and weather, and they've sort of acquiesced to that.

Q: But no price reregulation?

A: No. Price controls don't work. While they were regulated, their rates went up 18%. Give me a break.

Q: What do you want to accomplish this year at Commerce?

A: We're going to do Y2K [liability protection for business]. It's on the floor next week. We'll get the satellite act done, [data] encryption, perhaps an Internet regulatory prohibition.

Q:You mean the Internet tax moratorium? Who's pushing that?

A: Me.

Q: Isn't the Y2K liability bill in trouble?

A: We've reached an agreement. The overriding interest of small and medium-size business is going to prevail here. Whether we'll be able to get 60 votes is not clear.

Q: Any faint glimmerings of hope for a campaign-finance reform bill?

A: House Democrats have started a petition drive, and if they get enough votes, they'll force it out.

Q: You won't embrace a flat tax now, citing the need to first clean up the campaign-finance system and the loopholes it spawns. Does this view mask deeper reservations about the flat tax?

A: If you have just one flat tax for all of America, that obviously does not get off the ground. If you had a vastly simplified code, that's different. Do you still keep exemptions for charitable donations? I say yes. Same for the home-mortgage deduction. And you have the same problem with a [national] sales tax. If you have it, people say "Well, what about food?" That's got to be exempt, and pretty soon you're [just] putting taxes on Mercedes Benzes and yachts.

Q: So what are you for on the tax front?

A: I'm for a simplified tax code. I am not wedded to any particular one. And you'd probably have to have more than one bracket, maybe even more than two. I'm also for ending inheritance taxes, the marriage penalty, and easing the Social Security earnings test.

Q: These last items, I assume, would be phased out rather than killed overnight?

A: I'd cut 'em tomorrow, because I don't agree with [official] accounting. They are driven by budgetary numbers, but when we first reduced the earnings test, the Congressional Budget Office forecast a loss of revenue. Guess what? There has been an increase, because more seniors work. So I don't really pay much attention to a CBO forecast that I know is totally bogus.

Q: So are you a devotee of supply-side economics?

A: You could certainly say that I believe a reduction in taxes in a reasonable fashion historically is proven way to generate a greater degree of revenue. Is that extreme? I also believe it depends a lot on the kinds of taxes you cut.

Q: What do you think of House Speaker Denny Hastert's idea of smaller, phased-in tax cuts vs. an across-the-board reduction?

A: I'm for targeted tax cuts. Why? Certain groups of Americans need relief more than others. I wouldn't be averse to across-the-board cuts later on.

Q: Why are Republicans having so much difficulty shaping a coherent tax policy?

A: Why should you be surprised? Last year we couldn't even agree on a budget. There are different branches of our party, and only a six-vote majority in the House. If a few guys drop off, you've got problems.

Q: When you say you want to free up funds for tax cuts by closing corporate loopholes, what are you talking about?

A: There are billions there. Billions. For example, in the appropriations bill last fall, there was $23 billion [in] added spending. Practically every bit of it was pork. Look at sugar subsidies, at ethanol subsidies. If something is a benefit to the overall economy, I'm not so upset. But I am if it's tailored for a special interest. Last year, I proposed a commission on corporate welfare. It didn't get through the House. That would have identified these programs, and with the legitimacy of a national commission I would have pushed for elimination of these things.

Q: What's your take on the Administration's decision to delay seeking China's entry into the World Trade Organization?

A: They bollixed it up. At the 11th hour, Clinton went wobbly because of opposition in his own party.

Q: But if the President had come out for WTO entry just days after news accounts that China may have stolen neutron bomb secrets, wouldn't Republicans have whacked him?

A: Oh, sure he would have gotten whacked. He deserves to be whacked. The question is whether China deserves to be in the WTO.

Q: And what's the answer?

A: I did not see enough details in the agreement. If they were in compliance with what every other nation has to do to get into the WTO, I probably would have supported it. But it wasn't clear to me they had done enough. [Still], he turned it down for the wrong reasons.

Q: Where were you on the issue of restoring the President's fast-track trade negotiating authority?

A: I've been in favor of fast-track. The greatest successes of the Clinton Administration have been [on the trade front]. Their greatest failure was not to pursue fast-track the following year.

Q: Are you concerned about waning support for free trade in the GOP?

A: I'm extremely concerned. Periodically in our party, you see the rise of protectionism. There's going to be an economic downturn at some point, and that's when I'll really be nervous. I was against the steel [quota] thing, the banana [duty] thing, against anything that's retaliatory.

Q: In 2000, how do Republicans counter the fact that most Americans are happy with the Administration's economic policies?

A: I have no problems giving Clinton credit for the economy, just like Ronald Reagan got credit. But I'm running on my mission for the future, not the situation in the present.

Q: So if Vice-President Al Gore is the inheritor of Clintonomics, how can you argue for a change in existing policy?

A: I wouldn't change existing economic policy, except that I would beat back the forces of protectionism, free up the telecommunications industry more rapidly, encourage innovation, do a better job on education, and I would reduce taxes and the regulatory burden even more. It would be damned foolishness to say that the economy is bad, and it's Gore's fault.

Q: You say education is issue one for America. What's your program?

A: Choice, vouchers, more money to state and local authorities. I'd give incredible attention to this transition to the Internet so that all Americans could take part in it. Wherever you've got programs working in the states, adopt 'em. Charter schools are working in Arizona. Vouchers should be tested. And we need better incentives for teachers. Why shouldn't teachers be paid better?

Q: What's your view on abortion? Is it the emerging GOP line that claims: "I'm against it, but if you're not, it's O.K.?"

A: We should be an inclusive party and [need to] look at the platform language as it was in 1980 when Ronald Reagan was elected. It said there's still room in the party for people who disagree on specific issues. What's good enough for Reagan should be good enough for me.

Q: Will Republicans' post-impeachment image of intolerance continue to dog the party?

A: What [Senate Majority Leader] Trent Lott and [House Speaker] Denny Hastert are trying to do is come up with a positive agenda for education, tax reductions, health, and show the American people that a Republican Congress can be effective.

Q: How do you respond to critics who say your maverick stance mainly involves tilting at windmills -- that what you're really adept at is failing upward? For instance, you failed to enact tobacco legislation, or pass campaign-finance reforms, yet you're unabashed...

A: I was responsible for the repeal of catastrophic health insurance, passage of the line-item veto, passage of the Internet tax moratorium, passage of at least 10 major pieces of legislation that went through the Commerce Committee last year. And I did tobacco because it passes through the Commerce Committee. We did the [lawmakers'] gift ban, the lobbying ban. And we'll succeed on campaign-finance reform. We've had a lot of successes.

Q: You consciously model yourself on Ronald Reagan, but your speeches can be rather apocalyptic. Do you have his innate optimism?

A: I have that. America is still the leader of the world and the role model. I don't think there's a more exciting time to be alive than today because of the changes in information technology. So I'm very optimistic.

Q: How do you fight the George W. Bush boomlet -- the sense that Republicans don't want a divisive primary this year, they just want this thing over?

A: I've spent enough time here [in New Hampshire] and in South Carolina to know they want a campaign, they're eager for a campaign. That's the red blood of the party. I think there's going to be a campaign here.

Q: Some of your campaign contributions obviously stem from your role as Commerce Committee Chairman. Any worries about potential conflicts?

A: My answer is: Find any instance where I have done a special favor or supported any legislation that favored one industry over another. My record is to deregulate and promote competition. I've received money from the cable industry. I am vociferously critical of them. The Commerce Committee oversees almost everything that moves. If I ruled out taking money [from those companies], that rules out about three-quarters of the industries in America.

Q: If the fight for the GOP nomination comes down to you and Bush, what would you consider the key differences?

A: I don't know what his positions are. I think in every election it comes down to vision.

Q: But what about Bush's well-known advocacy of inclusion, of compassionate conservatism, of investing in education?

A: Those were my positions before I ever knew of Governor Bush. In fact, those were my positions when he was still general manager of the Texas Rangers.

Q: So unlike some Republicans, you don't object to the "compassionate conservative" handle?

A: Oh no. Two of the words I'd want on my tombstone are "compassion" and "patriot." If it hadn't have been for some guys who showed compassion to me, I wouldn't be alive.

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