Analysis: McCain tries to soothe tax-hike fears

[July 30, 2008]  WASHINGTON (AP) -- Republican Ronald Reagan raised taxes and survived to serve another presidential term. His successor, George H.W. Bush, raised taxes and did not.

Now comes Republican candidate John McCain, eager to reassure conservatives he's no tax raiser, yet also intent on letting voters know he will "do the hard things," as he often said in the primaries.

"I don't want tax increases. But that doesn't mean that anything is off the table" when it comes to Social Security, he said over the weekend, an open-to-interpretation remark that drew a prompt challenge from the conservative Club for Growth.

"We hope you will clarify where you stand on this important issue and reaffirm your commitment to eschew all tax increases," wrote Pat Toomey, the group's president.

McCain provided his answer in Sparks, Nev., on Tuesday, when a girl asked him whether he would ever raise taxes.

"No" was the answer, a paragon of simplicity in contrast to the parsing by aides seeking to explain his earlier remarks.

Regardless of his answer, McCain's underlying problem is a lack of trust among economic conservatives in his own party. There's no surprise in that. Citing deficit concerns, he voted against the tax cuts the current President Bush pushed through Congress in 2001.

Now, with red ink headed into record territory, he favors a permanent extension of the same cuts he once opposed, saying anything else would be a tax increase.

Democrats call that a politically motivated flip-flop. By any name, it seems to make Toomey nervous.

And the polls make clear he is not the only one. In last January's Florida primary, the contest that sealed McCain's nomination, McCain finished second to former Massachusetts Gov. Mitt Romney among voters who said cutting taxes was a higher priority than reducing the deficit.

Parenthetically, that's one of the reasons Romney figures prominently in speculation about a vice presidential running mate.

A generation ago, economic conservatives knew Reagan was their kind of president. In office, he validated their faith quickly, winning legislation from Congress that cut the marginal income tax rate to the lowest level in decades and adjusted tax brackets annually for inflation.

As a result, these conservatives were generally willing to look the other way at times. Reagan signed legislation in 1982 and again in 1984 to raise taxes -- although he never called it that. The term then in vogue was "revenue enhancements."

Then, in the Social Security compromise of Reagan's era, he and Republicans grudgingly swallowed higher payroll taxes. No less reluctant, Democrats accepted a gradual increase in the retirement age for full benefits.

Fast forward to the end of Reagan's administration, when then-Vice President George H.W. Bush was running to succeed him.

Challenging Reagan for the presidential nomination in 1980, Bush had deemed it "voodoo economics" to claim taxes could be cut without increasing the deficit. It was at the core of the supply-side economics Reagan championed and, not surprisingly, conservatives were slow to warm to the vice president.

Eight years later, he was still trying to make amends when he delivered his speech accepting the nomination at the party convention.

"The Congress will push me to raise taxes, and I'll say no, and they'll push, and I'll say no, and they'll push again, and I'll say to them, 'Read my lips: No new taxes,'" Bush said to applause that night.

He won the White House but, within two years, Congress pushed him to raise taxes and he said yes as part of a deal with Democrats to reduce deficits. Without the support Reagan could fall back on, Bush then lost at the polls in 1992, in part because conservatives abandoned him out of anger at his reversal.

Fearful of the same treatment, McCain's aides worked overtime to contain the damage.

"He's said again and again that he's not going to raise taxes," spokesman Tucker Bounds told Fox News, a statement of fact that stopped short of a promise not to do so in the future.

Bounds also said Social Security was a different kind of debate and to "really take this challenge on, we're going to have to be honest."

In conclusion, he added: "There is no imaginable circumstance where John McCain would raise payroll taxes. It's absolutely out of the question."

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On the Net:

McCain: http://www.johnmccain.com/

[Associated Press; By DAVID ESPO]

David Espo covers presidential politics for The Associated Press

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