"Sen. McCain's basic approach is to have a reliance on the capacities of American workers and firms and small businesses to make sure the government remains relatively small," McCain's senior domestic and economic policy adviser Douglas Holtz-Eakin told ABC News recently.
Holtz-Eakin said McCain's economic plan is focused on reining in congressional spending, or earmarks, forging trade agreements, reforming job training programs for blue-collar workers and advocating the expansion of the No Child Left Behind Act to allow parents to "take their money with them" to shop around for schools.
"Sen. McCain's economic plans are rooted in his belief that the role of government and on economic issues is to unleash the ingenuity, creativity and hard work of the American people and make it easier to create jobs," McCain senior adviser Taylor Griffin told ABC News.com last month.
Republican advisers said McCain believes national security is inextricably linked with economic security. They said he believes the key to economic growth is low taxes, incentives to keep companies in the country, free trade and getting rid of earmarks in federal spending.
Despite initially voting against Bush's tax cuts, McCain is now proposing to make them permanent and give additional tax cuts to corporations and eliminate the alternative minimum tax.
"The underlining themes that are woven throughout his approach is not to punish productive behavior, keep tax rates low, create incentives for companies to stay in this country, lower the corporate tax rate and ... comprehensive spending reform," McCain economic adviser Nancy Pfotenhauer told ABCNews.com in August.
McCain has acknowledged in the past that he knows more about foreign policy and national security than economics. Democrats have blasted McCain for quipping that economics is not his strong suit, turning it into a television ad against McCain.
"He has this wonderful self-deprecating sense of humor and out of his mouth comes things sometimes like 'yeah, I'm not that good on the economy' in an effort to make a small joke," Holtz-Eakin said, noting McCain has been the chair of the Senate commerce committee and ran the largest squadron in the Navy.
In recent days, McCain has attempted to recast his long-held positions on government regulation, as giants in the nation's banking and insurance industries teeter on the edge of collapse.
McCain struggled to explain his reaction today as news broke that the Federal Reserve had reversed itself and agreed to an $85 billion bailout of insurance giant The American International Group (AIG).
In keeping with his philosophy that the government shouldn't bail out failing private businesses, McCain adamantly said Tuesday that the government shouldn't save AIG as it teetered on the edge of collapse.
"They're on their own, We cannot have the taxpayers bail out AIG or anybody else," McCain said on Tuesday.
But after Treasury Secretary Henry Paulson announced the government would intervene to save AIG, McCain suggested he agreed with protecting Americans who have insurance policies and accounts at AIG.
In an e-mailed statement to reporters, McCain said that any actions "should be to protect the millions of Americans who hold insurance policies, retirement plans and other accounts." But in the next sentence McCain insisted, "we must not bailout the management and speculators who created this mess."