He opposes regulation -- until he supports it

As financial collapse threatened Wall Street and consumed Washington, John McCain appeared to undergo a dramatic transformation. The candidate who would shrink government became the candidate who would bulk it up.

Just a day after debuting a television ad warning that “big government casts a big shadow on us all,” the Republican presidential hopeful told business leaders in Wisconsin that a new federal agency was needed to intervene in the markets. “Government,” he said, “has a clear responsibility to act.”

The turnabout is a move McCain has perfected in 26 years on Capitol Hill.

The Arizona senator embraces his party’s popular critique of government, frequently invoking the deregulatory rhetoric that has helped Republicans win five of the last seven presidential elections.

But when a crisis or scandal makes headlines and sparks a public outcry, McCain is among the quickest in his party to call for robust government intervention.

McCain most famously pushed to regulate campaign contributions and greenhouse gas emissions. But over the last decade, he also championed greater government authority over airlines, automobiles, tobacco, television programming, even baseball, which he targeted after reports of steroid use in the sport.

“There is little secret about what is going on,” said David Boaz, executive vice president of the libertarian Cato Institute. “Even in this country that is more skeptical about regulation than any other, during a crisis, people tend to want an answer. . . . The obvious one is, ‘There ought to be a law.’ ”

McCain’s maneuvering has at times put him at odds with his party, helping him cultivate a “maverick” image.

It has also allowed him to capitalize on distrust of government and still play the tough cop on the beat, ready to protect Americans from corruption and corporate malfeasance.

Yet these two sides of McCain make it hard to discern how the politician who boasts of delivering “straight talk” would govern from the Oval Office.

It is unclear if a McCain administration would be led by the small-government crusader who claims President Reagan as his touchstone, or the energetic regulator who once advocated a new federal agency to license professional prizefighters.

The McCain campaign did not respond to requests to discuss the candidate’s record.

For much of the last year, McCain has triumphantly carried the conservative standard. “I was part of the Reagan revolution. . . . I was proud to be a foot soldier,” McCain said at the 40th president’s library this year. “I’m prepared to follow in his tradition and in his footsteps.”

When he accepted the nomination last month in Minnesota, McCain put the federal government in the crosshairs.

He criticized bureaucrats, pledged to cut government spending and accused his political colleagues of breaking faith with voters by expanding Washington.

“Rather than reform government,” he told his cheering supporters, “both parties made it bigger.”

The rhetoric placed McCain in the mainstream of public opinion. For more than a quarter century, most Americans have said they think government regulation does more harm than good, according to the Roper Center for Public Opinion Research.

As a lawmaker, McCain has taken broad swipes at government oversight.

After Republicans captured control of Congress in 1994 by running a sharply anti-government campaign, McCain and 37 GOP senators pushed legislation to place a yearlong moratorium on all regulatory rule-making.

McCain even helped kill efforts to exempt from the moratorium new regulations for clean drinking water and meat inspections. A less restrictive compromise ultimately passed with bipartisan support.

A year later, McCain was one of five senators to vote against a bill to deregulate telecommunications. He believed it did not go far enough.

McCain has also worked closely with lawmakers who wanted to relax federal oversight of the banking and financial services industry, including former Sen. Phil Gramm of Texas, until recently a senior advisor to the McCain campaign.

“He’s an extreme free-marketer,” Consumer Federation of America research director Mark Cooper said of McCain.

McCain kept up his anti-government rhetoric throughout his campaign for the 2000 Republican presidential nomination. In one October 1999 primary debate in Durham, N.H., he attributed the decade’s “almost unprecedented prosperity” partly to “a lack of regulation.”

Yet there has long been another side to McCain.

Facing popular outrage over defective vehicles, or tobacco marketing to minors, or airline flight delays, the senator has responded with moral indignation and surprisingly zealous efforts to enact more regulation.

When McCain took the gavel of the Senate commerce committee in 1997, reports were mounting of children being killed by automobile air bags.

The previous year, USA Today, the nation’s largest newspaper, had published 68 stories, editorials and op-ed pieces about problems with the devices.

Some of McCain’s Republican colleagues blamed the children’s deaths on federal rules that required air bags powerful enough to protect adults. Backed by automakers resistant to federal mandates, GOP lawmakers demanded the regulations be scrapped.

Instead, with consumer advocates at his side, McCain pushed the National Highway Traffic Safety Administration to come up with new requirements to protect children and then applauded the additional regulation.

“This rule-making is a good step toward improving traffic safety,” McCain said.

The same year he tackled air bags, McCain championed even more ambitious regulation of the tobacco industry. With cigarette makers in court and under fire for concealing information about the danger of their products, McCain hauled dozens of witnesses to his committee room.

A former smoker, he railed against cigarettes from his perch at the head of the horseshoe-shaped table and pledged to use federal law to rein in the industry.

After 10 hearings between July 1997 and March 1998, McCain pushed a 514-page bill that would have given the Food and Drug Administration extensive new powers to control the marketing and sale of tobacco products.

McCain struck at airlines in 1999, championing new regulations amid public outrage over news that passengers on a cramped Northwest Airlines jet had been trapped on the runway in Detroit for seven hours.

He sponsored legislation to crack down on automakers after reports that Ford had known for years about rollover problems with its SUVs.

“He understands that industry is not going to do certain things,” said Public Citizen President Joan Claybrook, a leading consumer advocate who has worked with McCain on auto safety legislation.

McCain wanted to regulate when broadcasters could air violent programming and how boxing matches should be scored.

In one unusual bid to expand government authority, McCain introduced legislation in 2003 to control how broadcasters cover elections. Under McCain’s proposal, broadcasters would have been required to air two hours a week of candidate- or issue-centered programming and to offer political candidates the lowest advertising rates.

The same year, he signed onto a bill to beef up regulation of mortgage giants Fannie Mae and Freddie Mac, three months after news reports that federal prosecutors had begun investigating accounting irregularities at Freddie Mac. McCain now points to the legislation, which didn’t pass, as evidence he has advocated market reform.

McCain’s Republican admirers say he remains a reluctant regulator, endorsing government intervention only when he feels industry won’t act. “At the end of the day, he hopes the private sector will come up with something,” said Ken Nahigian, a former commerce committee counsel.

But McCain’s legislative record also reflects an activist streak that diverges significantly from mainstream conservative ideology.

In his books, McCain has written admiringly about Theodore Roosevelt, who split with the Republican Party a century ago to break up monopolies and to regulate railroads, food processing and the use of federal lands.

“Many contemporary conservatives have let their healthy skepticism about government sink into something unhealthy, an embittered loathing of the federal government,” McCain wrote in his 2002 book “Worth the Fighting For.”

In the last week, however, McCain seemed to do one more turnabout.

Facing Democrat Barack Obama in the first presidential debate Friday in Oxford, Miss., he trained his rhetoric on a familiar target. “We’ve let government get completely out of control,” McCain said.

Then, on Wednesday, McCain left the campaign trail for Capitol Hill to vote for the largest federal intervention in the nation’s financial markets since the Great Depression.

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noam.levey@latimes.com

Times staff writer Jim Puzzanghera contributed to this report.

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Debate coverage

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