CBSNews.com: The Politico reported this week that a number of the 300 economists that Senator McCain claims support his economic plans say they have significant reservations about it, that many were unfamiliar with or downright opposed to key parts of his plan. What's your response to that?
Steve Forbes: Well, I've not seen that piece.
CBSNews.com: Senator McCain told Katie Couric this week that he pledged to balance the budget by the end of his first term in 2013. Do you think that's possible?
Steve Forbes: I think his plan is the most realistic plan to achieve a balance--or a far better balance--that is out there, by recognizing the importance of reducing the burden of taxation, among other things. That is the key to getting the economy back on track again. His energy programs, I think, would substantially reduce the price of oil, which would remove a huge burden on the American economy and the American consumer.
So the way you get a balanced budget is one, greater revenue growth. And he's got the best plan for it. And two, restraint of spending. Just slowing the growth of spending. And on that, he has a record, going back a number of years in the Senate, of being a hawk on reducing spending.
CBSNews.com: But why should voters trust Republican leadership on this issue when the current Republican president inherited a surplus and is leaving his successor with perhaps the worst deficit in American history?
Steve Forbes: We're talking about John McCain, not the Republican Party or the current incumbent in the White House. And we're looking to the future, not what George Bush has done in the past. Bush is not running for reelection. John McCain is running for election. And John McCain has vigorously opposed many of the spending measures of the Bush administration. His tax proposals are far more comprehensive than what the Bush administration has proposed.
And on the energy front, he has got a far more vigorous approach than either Senator Obama, the Congressional Democrats, or the current incumbent in the White House. So in terms of what voters are voting for--the programs advocated by Senator McCain, and the programs advocated by Senator Obama--I think Senator McCain's are hugely more beneficial for the economy and for our security.
CBSNews.com: What do you say to economists who argue that it's actually the Bush tax cuts that have contributed more to the shortfall than increased spending?
Steve Forbes: The tax cuts enabled the American economy to go from stagnation, which started under Bill Clinton in 2000, the high tech bubble burst in 2000. And the losses from high tech still vastly exceed what we've lost on the subprime crisis.
And the tax cuts of 2003 took the U.S. economy from a subpar one percent growth rate to three to four percent real growth, and between 2003 and 2007, the expansion of the American economy, just the growth alone, exceeded the entire size of the Chinese economy. We grew China in four years. Now, obviously, their growth rates are higher, but they're coming off of a much smaller base. So the tax cuts worked. What didn't work was the reckless spending by both the White House and the Congress.
CBSNews.com: You've talked about John McCain's energy proposals. Do you support his plan for a gas tax holiday?
Steve Forbes: The gas tax holiday plan, as part of a comprehensive package, makes sense. Give people some temporary relief. But have on track a massive program to increase the output of energy in the United States. Clearly, there are tens of billions of barrels of oil offshore that should be explored and produced. Every other country is doing it. Brazil, just a few months ago, discovered a field off its shores that has upwards of 33 billion barrels of oil.
There's lots of gas out there. And Senator McCain's nuclear program of 45 new plants in this country over the next 20 years, would go a long ways to increasing our production of electricity without relying on oil.
The technology on the nuclear power is there. Japan has done it, France has done it. So it's just a matter of will in this country to do the same thing. And by the way, both the offshore exploration and production, and the nuclear program, would create nearly a million new jobs, high skilled, high paid jobs, in both of those sectors.
CBSNews.com: But even Senator McCain's supporters say that the benefits of new output, from either additional oil drilling or from nuclear plants would be years into the future. Do you think there's more that can be done, besides what Senator McCain described as the psychological benefit of announcing that we're going to do this?
Steve Forbes: Well, I've heard the same arguments three or four years ago. If we'd gone offshore three or four or five years ago, we'd be having production from that.
And in terms of the future, if you're OPEC, or you're another oil-producing nation, and you see the United States has serious programs to increase its output of oil and natural gas production, not only offshore, but also all the shale deposits that we have in the western part of the United States, and we have a serious nuclear program, such as the French and the Japanese have done for years, what are you going to do? You're going to ramp up your production, because you're going to want to sell while the selling's good. That brings the price down.
So the impact would be immediate. And in terms of increased oil and gas production, that could start to come online in three or four years. The longer we wait, the longer it is in the future.
CBSNews.com: Do you disagree with Senator McCain on ANWR?
Steve Forbes: On ANWR, I do. But I agree with him on offshore and nuclear. And that's where most of the new energy resources are. And that doesn't preclude doing other things. For example, Boone Pickens has a very bold program for massive wind farms in Texas and elsewhere. So you do all of the above: wind, offshore, onshore, nuclear, and we can make substantial progress.
CBSNews.com: Democrats are drawing a contrast between the McCain corporate tax cuts and the Obama plan, which is a bigger middle class tax cut. How do you defend that?
Steve Forbes: Senator Obama has not proposed any specifics on his so-called middle class tax cut. And when he's been in the Senate, even though he's only been there three years, he's voted for tax increases of one sort or another 94 times. He also voted for a Senate budget resolution, for example, that would have increased taxes on individual tax filers making as little as $32,000 a year. So his actions belie his rhetoric.
And if he allows the 2003 tax cuts to expire, that's gonna take a family making $40,000 or $50,000 a year, and increase their tax burden one or two thousand dollars. So his tax cut would barely make up for what the tax is going to go up in two years.
On the business side, the United States today has the second highest business tax burden in the developed world. And that makes us less competitive with countries such as Ireland, Britain and France, which have all reduced their corporate tax rates.
CBSNews.com: Senator McCain claims to have opposed the Bush tax cuts simply because of the failure to cut spending. But there are many statements that have been chronicled of McCain criticizing the Bush tax cuts because he thought they disproportionately benefited the wealthy. Hasn't he changed his position on this?
Steve Forbes: Well, because of his criticisms and those of others, the tax cuts that passed--partially in 2001, but mostly in 2003--substantially increased exemptions for children, with that $1,000 refundable credit. Getting rid of the marriage penalty, which greatly increased the benefits to those in the middle income brackets.
So the criticism had the effect of making that tax bill even better. And in terms of his own tax record, McCain has never supported a tax increase.
By Brian Goldsmith