Is John McCain Good for Business?

As the Arizona Senator closes in on the GOP nomination, backers of Mitt Romney's pure pro-business stance may have to bet on a different horse

John McCain "will be a leader on economic issues the same way he has been on foreign policy issues," a senior campaign adviser says. Ben Sklar/Getty Images

by Eamon Javers

How will corporate America react if John McCain lands the Republican nomination? For business, Senator McCain (R-Ariz.) is a candidate of contradictions. He initially opposed President Bush's tax cuts, but now supports making them permanent. He has crusaded against the influence of corporate lobbyists, yet has more K Street fixers raising money for his campaign than any other Presidential candidate. And he says he's a full-bore, free-enterprise capitalist even as he admits that he hasn't understood economics as well as he should. "He doesn't fit neatly into a box," says GOP pollster Whit Ayres, who is unaffiliated with a Presidential candidate.

McCain posted strong progress Feb. 5 in his quest for the nomination, winning a string of key states including Arizona, New York, New Jersey, Connecticut, Delaware, Illinois, and Oklahoma. If corporate leaders do fall in line behind McCain's candidacy after Super Tuesday voting it will be somewhat grudgingly. In 2007, business tilted its support heavily toward McCain's last remaining rival for the GOP Presidential nomination, former Massachusetts Governor Mitt Romney. Romney is certainly a more natural cultural fit for business: As a founder of the investment firm Bain Capital, he's had a successful career in the private sector, which he speaks of repeatedly on the campaign trail, telling audiences he has the economy in his DNA. As voters were going to the polls Feb. 5, Romney warned that the nation's fragile economy needs an experienced leader: "We see our economy getting weaker. People wonder how they are going to pay their bills, gas bills, heating bills," he said.

Anti-Corporate Record

In contrast to Romney, McCain has joked that he's reading Alan Greenspan's book to learn about the economy. And he has a long history of tangling with a broad range of industries and even individual companies when he thinks they're getting a sweetheart deal in Washington or hurting American consumers. That record could give business representatives pause. "McCain will cause a few corporate government relations offices to sit up straight now that he is all but the GOP nominee," says Republican lobbyist and McCain supporter Scott Reed.

Some business executives worry that McCain's votes against President Bush's 2001 and 2003 tax cuts—which he said were irresponsible since they weren't offset by spending cuts—signal that he is something other than an anti-tax hawk. But on the campaign trail he now argues that allowing them to expire would amount to an unacceptable tax hike. In 2004 and 2005, McCain famously led the Senate's investigation into the wrongdoing of GOP lobbyist Jack Abramoff, to the embarrassment of some of his colleagues who had dealings with the now-jailed influence peddler. At the time he denounced the tight relationships between some lobbyists and members of Congress. But the watchdog group Public Citizen reported that McCain's 2008 presidential campaign has 59 lobbyists raising money, more than any other candidate.

As a candidate, McCain said he is one of the "great enemies of the pharmaceutical companies in Washington." He voted against the 2003 Medicare prescription drug bill, which was avidly pushed by the pharmaceutical industry and provided for billions of dollars of new spending on drugs. McCain said he wanted the government to be able to negotiate lower drug prices and import cheaper drugs from Canada, both ideas that were adamantly opposed by industry lobbyists, and which ultimately failed.

Opposing Energy, Tobacco, and HMO Interests

McCain has been active on global warming, proposing a carbon trading system that was opposed by some in the oil and gas industries. McCain was also an early supporter of increasing so-called CAFE standards for automobile emissions. Says one lobbyist who represents oil and gas clients: "If McCain becomes the nominee, our choices aren't very good."

On tobacco, McCain proposed sweeping anti-smoking legislation in the late 1990s that would have raised taxes on cigarettes, restricted the industry's ability to advertise, and given the Food & Drug Administration broad new authority over tobacco companies. He estimated that it would cost the industry more than half a billion dollars over 25 years. The tobacco industry fought it to a standstill in the Senate.