Republican Victory May Rest Once Again With McCain, This Time on Taxes - The New York Times
Author: Alan Rappeport
Description: After sinking his party’s hopes of repealing the Affordable Care Act earlier this year, the Republican from Arizona may hold the fate of a tax overhaul in his hands.
Keywords: Federal Taxes (US),Corporate Taxes,Law and Legislation,Tax Credits Deductions and Exemptions

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# Republican Victory May Rest Once Again With McCain, This Time on Taxes

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Senator John McCain of Arizona arrived for a vote at the Capitol on Monday. While he has praised the process of the Senate tax bill, some believe he could still vote against it. Credit J. Scott Applewhite/Associated Press

Once again, it could all come down to Senator John McCain.

After sinking his party’s hopes of repealing the Affordable Care Act this year with a dramatic thumbs-down, the fate of a tax overhaul may now sit in the hands of the Republican from Arizona. In recent days, Mr. McCain has been fairly tight-lipped about his views on the tax proposal speeding through the Senate, saying he sees some problems with the existing bill but is waiting for a final plan before making a decision.

Asked about what concerned him about the Senate tax bill this week, Mr. McCain replied tersely: “A lot of things.”

Even those who know Mr. McCain best are unsure how he will vote, but if history is any guide, Republicans have reason to worry.

Mr. McCain has voted against big tax cuts before, including two that passed under another Republican president: George W. Bush. In that case, he bucked the majority of his party on the grounds that the 2001 and 2003 cuts overwhelmingly benefited the rich — a widespread criticism of the current Senate legislation and the bill that has already passed the House. Mr. McCain is also a deficit hawk and could find it hard to swallow a tax cut that will add around $1.5 trillion to the federal debt over 10 years.

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With their slim majority in the Senate, Republicans can lose no more than two votes, and several others are on the fence.

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“I don’t know,” Douglas Holtz-Eakin, policy adviser to Mr. McCain’s 2008 presidential campaign, said when asked how his former boss would vote on the tax overhaul. “For most people there are going to be things in there they don’t like and the question is what is preferable, the status quo or the bill.”

In 2001, as Republicans forged ahead with a $1.35 trillion tax cut, Mr. McCain became one of two Republican senators to vote against the bill’s passage. He said he could not accept that changes to the bill lowered the top individual tax rate to 35 percent and delayed tax relief for married couples.

“We had an opportunity to provide much more tax relief to millions of hard-working Americans,” Mr. McCain said in a speech on the Senate floor. “But I cannot in good conscience support a tax cut in which so many of the benefits go to the most fortunate among us, at the expense of middle-class Americans who most need tax relief.”

Two years later, Mr. McCain voted against another round of tax cuts. In his remarks in 2003, Mr. McCain again cast doubt on the need to use “billions of federal dollars to cut taxes for our nation’s wealthiest.” The deal breaker that time was that his fellow lawmakers would pass such cuts while rejecting legislation that would have allowed members of the military to get tax breaks on profits from selling their homes.

“Politics ruled the day,” he said ruefully.

But Mr. McCain had been a tax cut skeptic well before those votes. After Republicans swept control of Congress in 1994, he was fretting about being fiscally responsible and urged his fellow lawmakers to heed the lessons of President Ronald Reagan.

“I think we would be making a terrible mistake to go back to the ’80s, where we cut all of those taxes and all of a sudden now we’ve got a debt that we’ve got to pay on an annual basis that is bigger than the amount that we spend on defense,” Mr. McCain said.

During his first run for president, Mr. McCain was the candidate of fiscal responsibility rather than tax relief. When debating George W. Bush during the 2000 Republican primary, it was clear that Mr. McCain did not think that the budget surplus should be spent on tax cuts.

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## Which Republican Senators Might Oppose the Tax Bill, and Why

Senate leaders would need to win over several Republican senators to pass a tax overhaul.

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“We ought to pay down the debt, and we also ought to make Social Security solvent,” he said.

More recently, Mr. McCain has been toeing the party line on taxes.

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In 2006, Mr. McCain supported extending the Bush tax cuts on the basis that letting them expire would represent a tax increase.

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The tax plan that Mr. McCain crafted in 2008 during his presidential run against Barack Obama was even more mainstream Republican. He called for lowering the corporate tax rate to 25 percent from 35 percent, phasing out the alternative minimum tax and doubling the value of exemptions for each dependent to $7,000 from $3,500.

The current Senate version has some similar strands, though it goes much further in giving tax breaks to businesses. The Senate bill cuts the top corporate tax rate to 20 percent, phases out the alternative minimum tax for both individuals and businesses, and creates more favorable tax treatment for so-called pass-through businesses. On the individual side, it roughly doubles the standard deduction for married couples filing jointly to $24,000 from $12,700 and increases the value of some other tax breaks, such as the child tax credit.

These days Mr. McCain seems far more concerned with the virtues of bipartisanship and “regular order,” insisting that both parties should have the chance to debate tax legislation and offer changes to any bill. His biggest priority remains robust military spending, and some have speculated that Mr. McCain could be wary that tax cuts would mean less revenue for the military and more debt for the nation.

Steve Schmidt, a Republican strategist and longtime adviser to Mr. McCain, said that if lawmakers mean what they have said over the years about fiscal restraint, they should oppose this tax bill.

“We’re about to find out the degree to which that viewpoint about fiscal discipline was political rhetoric or fundamental principle,” Mr. Schmidt said. “If it was political rhetoric, then this bill will pass. If those statements were principle based, then this bill will fail.”

There have been some signals that Mr. McCain could be on board despite his public reluctance to embrace the bill. A spokeswoman for Mr. McCain pointed to his recent comments praising the process.

Still, some supporters of the tax bill have been concerned that Mr. McCain, along with Senators Bob Corker of Tennessee and Jeff Flake of Arizona, could vote against the legislation, possibly to spite President Trump, whom they have all been critical of, and criticized by.

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Grover Norquist, the head of the anti-tax Americans for Tax Reform, said that he is hopeful that Mr. McCain will put his differences with Mr. Trump aside and get behind a tax bill that he thinks would be good for the party and the economy.

“You want to be the guy who is bigger than any personal fight,” said Mr. Norquist, who suggested that Mr. McCain voted against the 2001 tax cuts because he disliked Mr. Bush.

As for Mr. McCain’s penchant for going his own way, Mr. Norquist said he thought the senator had already proved himself.

“I think McCain did the maverick thing on health care, so if there are dues for the maverick club, he paid them this year big time,” he said.

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