After talking with loads of economic conservatives in recent days about the prospects of John McCain as the GOP nominee, I have concluded that in the end many will actually support him with a moderate degree of enthusiasm. (Steve Forbes, by the way, already has voiced his support.) Here are the reasons:
1) The Bush tax cuts. The 2001 and 2003 reductions will expire at the end of 2010, and McCain has personally promised several top conservatives that he will go all out to get them extended.
2) Earmark reform. McCain has a vendetta against earmarks. While pork projects are not a huge part of the $3 trillion federal budget, maybe $25 billion to $30 billion, they act as a "force multiplier" of sorts to boost spending throughout the budget. A member of Congress who objects to some new spending plan might not get the project or perhaps will be "persuaded" to go along with a spending bill by getting pork shoveled his or her way.
3) Spending. One supply-sider suggested to me that maybe it's best to view McCain as part of a Bush-McCain continuum. Bush cut taxes but didn't do much about spending, and now McCain will cut spending and hold the line on tax increases. Together, McBush makes a good conservative president.
4) Phil Gramm. If McCain is elected president, the former U.S. senator from Texas will almost assuredly be the new treasury secretary—a big step up, in the view of many conservatives, from Bush's picks.
5) Trade. McCain is a free trader, and open global trade is the bedrock fundamental underlying the amazing global economic expansion.
6) Healthcare. Although even close allies will readily admit McCain is no policy wonk, his healthcare plan—if McCain can fully grasp and explain it—is one with loads of appeal to free-market conservatives.
7) Hillarycare, Obamacare. On the other hand, conservatives are coming around to the view that a Democratic president with a Democratic Congress will create a massive, government-run healthcare system that will differ from what we see in Canada and the European Union only in minor detail. And once this new, expensive entitlement is in place, conservatives worry they will never get rid of it or even substantially modify it. More than one person told me about fearing that nationalized healthcare will end up transforming the Republican Party into an American version of today's left-slouching Tory Party in Britain.
Of course, economic conservatives still have big concerns. McCain is no supply-sider. In fact, he seems to have bought into Rubinomics, which sees lower deficits, not lower taxes, as the key to growth. Another big worry is that McCain will agree to a tax increase as part of a Democratic plan to reform Social Security. They also worry about McCain's love of a cap-and-trade climate emissions plan, which is, basically, an energy tax. And even though McCain seems to realize tax increases can hurt economic growth, he has so far been unable to forcefully articulate why tax cuts are good for economic growth. At least, that is the perception.