MUST READ: McCain Tax Cuts Would Bloat Deficit Or Take Huge Spending Curbs
April 22, 2008
Today the Wall Street Journal details how disastrous John McCain's economic plans would be. Though he has proposed tax cuts that would either "cause the federal deficit to explode" or require huge cuts to critical programs like Social Security, he has yet to explain where those cuts would come from or how he would pay for his plan. Experts agree that McCain's numbers just don't add up. Heading towards November, McCain's failure to articulate a credible economic plan will no doubt hurt him with voters who don't want a third Bush term of disastrous economic policies that have hurt America.
The following are excerpts of the story:
McCain Tax Cuts Would Bloat Deficit Or Take Huge Spending Curbs
Wall Street Journal
By Laura Meckler
April 22, 2008
"Sen. John McCain is proposing tax cuts that would either cause the federal deficit to explode or would require unprecedented spending cuts equal to one-third of federal spending on domestic programs…Altogether, he proposes more than $650 billion in tax cuts a year, much of it benefiting corporations and upper-income families. That includes the cost of extending tax cuts implemented under President Bush that he voted against twice. To help pay for it all, the Arizona senator says he would cut $160 billion a year from a federal discretionary budget that totals a little more than $1 trillion. He hasn't specified where the cuts would come from…The chances of cuts of this magnitude are 'nonexistent,' said Robert Bixby, executive director of the Concord Coalition, a nonpartisan group that promotes fiscal discipline. 'There's not a consensus to cut back on the functions of government that much,' he said. 'Those are very, very deep cuts…'
"Sen. McCain says he will eliminate wasteful military spending, but he also promises to increase the size of the military, and he has promised to keep U.S. forces in Iraq as long as needed. In addition, several new weapons systems are in development…That leaves domestic spending. The cuts that would be needed to balance the books are 'inconceivable,' and 'wildly draconian,' Mr. Greenstein said. 'No president would really propose it and no Congress of either party would really pass it…' To really cut federal spending, experts say, Sen. McCain would need to attack Social Security and Medicare, popular programs serving seniors. 'If you're going to get serious about spending, you have to turn to the entitlement programs,' said the Concord Coalition's Mr. Bixby…
"Sen. McCain's chief economic adviser, Douglas Holtz-Eakin, says he doesn't have to find offsetting spending cuts for extending the Bush tax cuts or for eliminating the AMT for middle-class families because those policies are assumed in Washington. Nonetheless, projected deficits will increase if these taxes are cut without offsetting spending reductions. His campaign also says there is no cost to a proposal regarding the tax treatment of capital expenses. Outside experts put the cost at tens of billions of dollars a year. Under that plan, the federal government would take an upfront tax hit and be forced to pay additional interest on a larger national debt, said Ronald Pearlman, a tax professor at Georgetown Law Center and assistant secretary for tax policy under President Reagan. To say there is no cost to the government is 'so intellectually dishonest it's outrageous,' Mr. Pearlman said. Mr. Bounds, the McCain spokesman, responded: 'Clearly there is a difference of opinion here.'"
For the full article, click here:
http://online.wsj.com/article/SB120882415111033181.html?mod=todays_us_page_one
