McCain Promises Would Cost Billions

Analysis: GOP Candidate Is Vague On How To Pay For Plans, Tax Cuts Proposed On The Campaign Trail

(AP)  Republican John McCain is making promises that would cost billions of taxpayer dollars, yet he is vague about how he would pay for them.

McCain is handing around a campaign grab bag of goodies. There are little treats like a summer gas-tax holiday and new mortgages for struggling homeowners, and there are big plums like tax breaks for corporations and families with children.

The expected GOP presidential nominee has nothing on the Democrats. Hillary Rodham Clinton and Barack Obama would spend billions of dollars themselves on things like paid family leave, universal health insurance and preschool for kids.

The difference? Unlike the Democrats, McCain has made a career of trying to cut spending. He rails against spending in nearly every speech. He gets laughs by singling out silly sounding projects like a federal DNA study of bears in Montana: "I don't know if that was a paternity issue or a criminal issue."

And McCain gets attention when he says it was spending, not the war in Iraq, that cost Republicans their control of Congress in 2006.

"The reason why we lost that election, my dear friends, was because we let spending get out of control," he said recently. "We came to power in 1994 to change government, and government changed us."

Now McCain is promising ambitious cuts in spending to pay for his ideas. The cuts would not pay for all his promises, but McCain says they needn't.

"I strongly disagree with the view that just because you reduce the tax burden, just because you let people save and invest more of their money, that therefore there's less money that goes into government," he told reporters last week in Alabama.

McCain said he is not exactly a supply-sider - someone who subscribes to the idea that some tax cuts can pay for themselves by encouraging economic growth. But he certainly leans that way.

"I believe there's more money, because of the increase in economic activity and growth," he said.

Regardless of who wins the November election, it is vital to find a way to pay for new spending or tax cuts, because the next president will face a budget deficit of more than $400 billion. And the deficit will keep mounting as baby boomer retirements swell Social Security and Medicare.

McCain has pledged to balance the federal budget, although he has backed off an earlier promise to do so in his first term and now says he would do it within eight years.

McCain's tax cuts would be double the size of President Bush's:

First, he wants to extend Bush's tax cuts, which cost an estimated $228 billion annually and are set to expire after next year, according to congressional analysts.

On top of that, he seeks new tax cuts of about $225 billion a year, according to his own estimate. He would slash the corporate tax rate, eliminate the alternative minimum tax and double the tax exemption for dependent children.

And the cost of his tax breaks could rise even higher. McCain has proposed two business tax breaks, a credit for research and first-year expensing of equipment; his campaign says they essentially would cost nothing, but the Treasury Department has estimated they could cost more than $140 billion annually.

Those are just the tax cuts. McCain also proposed a new mortgage refinancing program for struggling homeowners that could cost the government $3 billion to $10 billion. He proposed to suspend federal gas taxes for the summer months at a cost of $8 billion to $10 billion.

And McCain has several proposals whose costs are unknown, such as his pledge to give all veterans a plastic card to get medical treatment anywhere they choose, a new student loan program and tax write-offs for companies that provide Internet service to rural areas.

How would he pay for it? New user fees could pay for the gas-tax holiday, McCain adviser Doug Holtz-Eakin said.

Ironically, McCain said those kinds of fees were essentially tax increases when former rival Mitt Romney imposed them on businesses as governor of Massachusetts. Yet McCain has said he doesn't want to raise taxes.

McCain also has sketched out ideas for covering the costs of his $225 billion in new tax cuts, saying he would cut spending, eliminate corporate tax loopholes and spark economic growth by that amount of money.

Those spending cuts include making wealthier Medicare recipients pay more for their prescription medicines, killing off congressional earmarks and a freeze on some new spending increases.

Yet for all the numbers he has provided, McCain has been reluctant to say exactly which programs he would cut.

He criticizes "earmarks," pet projects tucked into spending bills, like the bear study. He said Wednesday that the bridge collapse in Minnesota last year would not have happened if Congress had not wasted so much money on pork-barrel spending, despite the suspicion of federal investigators that the problem may have been design-related, not spending-related.

He also won't list which "earmarks" are wasteful because there are more than 9,000 of them. "How could I possibly?" he said Wednesday. "Are you crazy?"

Even the earmarks he rails against include things he supports, such as aid to Israel. Last month, after McCain promised to eliminate all earmarks as part of his economic plan, his campaign said he remains committed to aid for Israel.

Thus, the reality of cutting spending may be very different from rhetoric, as McCain has found time and again.

On a swing through Alabama's rural Black Belt last week, McCain rode a ferry boat from tiny Gee's Bend, a town once cut off from ferry service to keep black residents from crossing the Alabama River to push for civil rights.

McCain rode across the river with several elderly black women, quilt makers from Gee's Bend, who sang gospel hymns and held his hands. McCain even took a turn driving the ferry just before it docked.

The ferry came into existence with $3 million in earmarks - the kind of spending McCain says he would stop.

McCain insisted he is not trying to have it both ways. The ferry spending was worthy and would have been eligible for other federal dollars, he told reporters.

"America is supposed to help people in rural settings, people like the quilters who are direct descendants of slaves," McCain said. "It's 'give people a hand up.' That's the essence of government."

[jt_lancer]

McCain, like Bush and the current crop of statist neocons, is big government to the freaking core. Unfortunately, Hillary, Obama, and the Dems fit the same mold.

There ain''t a dime''s worth of difference between them. They are determined to tax and spend this country into the poorhouse.

[onceagirl]

SO?

[realpatriot1]

mudrose,

Since all 3 candidates have prposed market-based healthcare plans that have private insurance still as the basis, the cost will be peanuts in comparison to Operation Enduring Occupation.

[homespunlady]

Well, Osama Bin Laden DID say that his FOLLOWERS plan was to BANKRUPT the US....

GREAT JOB NEOCONS in following YOUR "fearless leader"!
Now WHICH "leader" was that?
King George who is PROTECTING and bankrupting our nation FOR that SAUDI TERRORIST or Osama Bin Laden directly?

As far as McBush joining King George in dancing to the PUPPET-MASTER ELITE; sounds to me like this article sums up his kiss backside and let the common citizen eat feces attitude pretty succinctly.

Corporate WELFARE for the WAR Profiteers and his fellow CRONIES and "cutbacks" of essentials he will SPRING on the common citizen to pay for it -AFTER they FALL FOR the Bush 3rd term..

[sgtrds]

The GOP economic plan. Slash taxes for the rich, drive jobs overseas, run up huge deficits, spend like drunken sailors, funnel billions from the treasury into private hands via war for profit, borrow us into generations long debt to the Chinese and then somehow try to figure out a way to blame it on Democrats.

[aldon61]

McSame is a crazy old man that self proclaims he doesn''t know much about economics. The number one problem we have in the United States is our economy! Hillary Clinton can''t manage her own campaign, she can''t be trusted with our national resources either. If either of these candidates gets elected in the general, we will have 4 more years of what we''ve just gone through and we will have deserved it!

[broadwayphi]

And the reason the Republicans will lose the election this year, my dear friend, is becuase you don''t have a clue as to what really matters to working people.

Let%u2019s see McCain reject Reverend Hagee, who thinks Catholics are evil and who pronounced Hurricane Katrina %u201CGod%u2019s judgment on New Orleans.%u201D

Let%u2019s see Hillary Clinton start pulling us together instead of race-baiting for her personal ambition%u2019s sake.

Obama has the support of working Americans who see past the gas tax pandering and warmed over trickle down Bushenomics.

[ramos937]

McCain is trying to decrease income and increase costs all at one time. The only way to make up the net difference is to borrow more money from overseas. How long before someone says no more loans? When that happens, it will be the catalyst for our financial house to start coming down.

[sgtrds]

Considering that the largest parts of our national debt have been run up by republicans spending like drunken sailors where is the world did they ever get the idea that their the fiscally responsible party? Every election they pay lip service to a balanced budget and fiscal responsibility and every time they get in power they slash taxes for the rich and spend all of the taxpayers money and borrow us into massive debt. How many more times are Americans going to keep falling for their baldfaced lies?

[mudrose-2009]

Well, what do you think Obama and Hillary''s healthcare is gonna cost - peanuts?

[hoopersports]

Wow this is about the most biased report I have ever saw.

[idnnsg]

hotpaulie says, "I learned in grade school that the economy picks up DURING war time."

Then your elementary school teachers were id.iots!

The actual effect of war on the economy is very complex, but nearly every economist agrees that war has a VERY negative effect on the economy while it is being fought. When the war ends, there is a bounce that may improve the economy, but that is severely offset by all the money borrowed to pay for the war.

Here''s a summary of war''s effects on the economy that might be simple enough for you to understand (but I''m an optimist):

http://www.answers.com/topic/war-effects-of-war-on-the-economy

PS: In grade school, most teachers tell their kids that Santa Claus is real, so you should not base your opinions about the economic effects of major geo-political events on what you heard in grade school!

[pvperson]

JACK3213.......Are you what used to be called a shutin? Do you set in front of your computer all day puffing into a straw to type your comments? Is that why they''re all caps? Is that why you don''t seems to have a grasp on reality?

We''ve been at war for over six years and the economy didn''t get better, it tanked. The democrats have a one vote majority in the senate (for one year), but you want to blame them for everything that''s happened in the last seven years (when the republicans were in full control). And last, when would it be in the best interest of the US to leave Iraq, 100 years or never? Your a fool.

[hotpaulie]

LibH8er - No, I am not waiting for my hand out check...I believe those checks are a joke and a ploy to garner support for this administration. How much extra money is the government spending just to send those checks???

[libh8er]

This country is not in a financial situation in which tax cuts are a realistic option.
Posted by hotpaulie at 12:33 PM : May 01, 2008

I''d be willing to bet you''re out checking your mailbox everyday for your tax hand-out check.

[hotpaulie]

JACK3213 - We have stirred up a hornet''s nest in Iraq and I believe we have to stay there as well. However, this war is costing our economy...that is why I made that comment to you. I am not a democrat but I have nothing good to say about Bush and friends.

[libh8er]

Vote Failure. Vote Fake Republican.
Posted by FloydZepp at 12:42 PM : May 01, 2008

He''s right! Look at welfare and the war on poverty. Both were HUGH RINO failures! It costs us TRILLIONS and untold costs in incarceration and crime. Those *** republicans!

[jack3213]

HOT PAULIE- GRADE SCHOOL?- WOW- YOU MUST HAVE JUST GRADUATED BECAUSE THEY ARE FILLING YOUR HEAD WITH BS. WE CANNOT LEAVE IRAQ UNTIL THE WORK IS DONE- JUST BECAUSE IT IS UNCOMFORTABLE FOR YOU TO DEAL WITH- IT IS NOT IN THE BEST INTEREST OF THE COUNTRY- IF YOU WANT TO GIVE MORE REIN TO TERRORISTS KEEP PUSHING THIS AGENDA..IT IS A MUCH BIGGER WORLD THAN YOUR TINY BACKYARD.

[realpatriot1]

jack3213,

McCain wnats to remain fully deployed in Iraq for another 4 years(at least). That''s at least 3 years longer than the other candidates and would cost over $300 billion dollars more.

That''s more than all the additional social spending proposed by Obama & Clinton combined. McCain won''t be able to deliver on any of his tax or spending promises
if he maintains our current presence in Iraq.

Obama is advocating a return to the PAYGO rules agreed to by honest Republicans & Democrats alike which were over0turned by Bush. McCain is now turning his back as well on fiscal conservatism.

That''s why fiscally responsible independents and Republicans are turning away from the republicans and turning to Obama.

It''s why Obama will ultimately win. The undecideds are who will decide the election and McCain will not win them with this kind of fiscal and economic policy.

[hotpaulie]

JACK3213 - I learned in grade school that the economy picks up DURING war time.