BUSINESSWEEK ONLINE : FEBRUARY 14, 2000 ISSUE
NEWS: ANALYSIS & COMMENTARY

Can the Establishment Stop McCain?
Bush can't afford one false step in South Carolina

On Ground Hog Day, the political Establishment woke up to see an unwanted shadow across the future. Power brokers in both the Republican and Democratic parties had marshalled big money, armies of volunteers, and a raft of endorsements to cement the leads of front-runners George W. Bush and Al Gore. They hoped to snuff out the insurgencies of John McCain and Bill Bradley. Instead, McCain scored an upset, taking 49% of the vote, over Bush's 30%. And instead of dealing Bradley a death blow, Vice-President Gore pulled out a middling 52%-to-47% win. Now both upstarts will fight on, igniting a costly and divisive Presidential contest that leaves no room for stately coronations this summer.

Bush faces the worse problem. McCain has triggered a populist revolt that has the chance of stopping Bush's juggernaut. According to Granite State exit polls, the Arizona senator crushed the Texas governor among independents, 61% to 19%. But he also won majorities from GOP liberals, conservatives, and moderates, losing to Bush only among voters describing themselves as members of the Religious Right or as ''very conservative.''

If that dynamic plays out in primaries slated for Feb. 19 in South Carolina and Feb. 22 in Michigan, Bush could be in trouble. Conservative South Carolina will be critical, and the Bush campaign is expected to work overtime to convince voters that McCain is a closet liberal who flip-flops on abortion. ''Bush is going to go hard negative in South Carolina,'' says McCain campaign coordinator John Weaver. ''They'll throw everything they have at us.''

SWING VOTERS. The Bush camp is doing nothing to discourage this speculation. Aides say that in the Palmetto State and beyond, Bush will stress his ties to social conservatives. The game, says former Christian Coalition Executive Director Randy Tate, is ''to tag McCain as closer to Clinton and the Democrats'' than the GOP.

Just one hitch: The harder Bush tacks right, the more he irks GOP mainstreamers and independents. Indeed, the same nonaligned, reform-minded voters who gave McCain his surge in New Hampshire could loom large in South Carolina and elsewhere. The state's open primary permits indies and Democrats to cast ballots for Republicans. Michigan, despite the pro-Bush exertions of Republican Governor John Engler, gives McCain a decent chance to peel off legions of suburban swing voters and Reagan Democrats.

Other states where McCain's crossover dreams could be tested: Virginia (Feb. 29), an open-primary state with a big cadre of veterans and lots of moderates concentrated in the Northern suburbs; Connecticut; Rhode Island; Ohio; Minnesota; Vermont (Mar. 7)--all states with vibrant independent blocs--and Florida (Mar. 14), where ticket-splitting is practically a pastime. Wisconsin and New Jersey are also havens for switch-hitters, but come too late to offer much help. Insists top Bush strategist Karl Rove: ''McCain has little or no infrastructure in the states where he needs to compete.''

Indeed, despite his new momentum, McCain still has disadvantages--especially when it comes to money. While the Bush organization raised $69 million (and spent only $37 million) in 1999, McCain is abiding by spending limits and has only $6 million left. The folks who can raise money in a hurry happen to be the same Beltway power brokers that McCain campaigns against. But they don't seem to mind. Tickets for his Feb. 10 fund-raiser at Washington's Willard Hotel, at $500 and $1,000 per person are selling well. ''He'll raise a ton of money,'' says a top Capitol lobbyist. ''That populist stuff just rolls off our backs--it's what politicians have to say.''

COVER THEIR BETS? Indeed, while McCain pledges in his campaign speeches to ''break the grip of the special interests in Washington,'' enact campaign-finance reform, and attack $150 billion in ''corporate welfare,'' he is not seen as anti-business. He is the doggedly conservative chairman of the Senate Commerce Committee, and his stands on transportation, telecom reform, and Internet taxes fit with many Big Business agendas. ''He's definitely a maverick,'' says health-industry lobbyist Tom Scully. ''But I don't think he causes any great fear that he is going to turn the town upside down

Besides, scores of the industry reps who jumped on the Bush bandwagon may now be tempted to get off at the next junction and write a check to McCain. ''Some guys are going to start covering their bets,'' says a top small-business lobbyist. ''We're already seeing it in donations to House Democratic groups.''

In the end, McCain's success or failure probably won't rest as much on his South Carolina showdown as his ability to keep building momentum while juggling the competing interests of all the diverse voters rallying to his cause. But one thing is certain: The GOP kingmakers who tried to engineer a quick and bloodless Bush processional to the nomination have seen their scenario scrambled by a clever pol who is fusing liberal and conservative dogma into a powerful new formulation.

By Lee Walczak, with Dan Carney, in Washington and Richard S. Dunham in Merrimack, N.H.

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