Great Owl, I think it's a really good idea to explore the candidate's positions on respective issues, and I too, think the economy is certainly a major point of concern for all of us. To every political thread poster's surprise, I'll make a criticism of McCain on the issue. He has not done a stellar job of getting his plan in front of the public, IMO. Obama has spoken in detail of government programs he would initiate or increase, and therefore there is more opportunity to decipher a price tag for what he proposes. Part of the reason that there is more "attack" on Obama's economic plan than support for McCain's is that we know more specifics about Obama's. On another critical issue, namely Iraq, the reverse is true. McCain has been very clear and specific about his proposals and philosophy of foreign affairs, while Obama is on much more vague and shakey ground. His positions have danced around the mark and when reporters have pushed for clarity, his responses have been generalized. Anyway, on the economy, I hope this will be helpful to start a discussion. I specifically looked for information that put a price on what Obama has made public, and did my best on what I could find on McCain's. Both articles are sourced.
Obama Spend-O-Rama by Ross Kaminsky (more by this author)
Posted 03/14/2008 ET
Late Wednesday afternoon, Sen.Wayne Allard (R-Co.) introduced Amendment 4246 into the Senate budget debate. The amendment, which Allard calls “The Obama Spend-o-Rama” proposes funding 111 of the 188 spending proposals put out so far during Sen. Barack Obama’s (D-Ill.) presidential campaign. (These were the proposals which Allard’s staff had time to analyze before the GOP leadership asked him to offer the amendment on the floor.) According to Allard, “There are another 77 proposals with unknown cost estimates that will add billions to this number.” (Click here to read Senator Allard’s Fiscal Responsibility Floor Statement.)
Allard freely admits that he will oppose his own amendment and urges other Senators to do the same. But, as a senior Senate staffer pointed out to HUMAN EVENTS, “Let’s see how many Senators who have endorsed Obama will actually vote for his budget.”
Some of the numbers around the federal budget are incomprehensibly large. How do you wrap your mind around a 5-year cost of $1.4 trillion?
Senator Allard offers some comparisons to help with that mental exercise:
• This new spending, if enacted, would represent an almost 10% increase over the President’s FY 2009 budget.
• This $300 billion spending proposal would cost more than 42 states’ budgets combined (general fund expenditures).
• It is more than the United States spent last year on imported oil ($294 billion net).
• It is more than 60% larger than any one-year federal spending increase, ever.
An initial draft of the Amendment which was obtained by HUMAN EVENTS shows its purpose of “raisi(ng) taxes by an unprecedented $1.4 trillion for the purpose of fully funding 111 new or expanded federal spending programs” and, referencing S. Con. Res. 70, the Fiscal Year 2009 budget proposal, lists 111 items in the format of “On page 11, line 4, increase the amount by $5,120,000,000.”
According to Senator Allard’s communications director, Steve Wymer, “This amendment is obviously somewhat tongue-in-cheek. But if leaders in the Democratic Party are going to propose billions…or trillions…of dollars of new spending, at least let’s be honest about it.”
Of course, the problem with government spending is that government only has the money it takes from taxpayers. Senator Allard therefore laid out the tax consequences of Obama’s budget-busting proposals:
“According to CBO, President Clinton’s 1993 tax increase raised taxes $240.6 billion over five years. The late Senator Patrick Moynihan (D-NY) called it the ‘largest tax increase in the history of public finance in the United States or anywhere else in the world.’ But this proposal will increase spending $300 billion in a single-year.”
Senator Richard Burr (R-NC), who spoke immediately after Allard, re-emphasized the point: One year of Obama’s proposed spending increase “is bigger than the 5-year increase (in federal income tax collections) that President Clinton imposed on the American taxpayer.”
Burr argued that Obama’s promise to raise taxes just on the Democrats’ “attractive target” of people earning over $250,000, will only generate $225 billion over 5 years, far short of the $1.4 trillion which Obama’s proposed programs (actually only 60% of them) would saddle taxpayers with during that same time frame.
If Obama wanted to raise taxes on only the top 1% (earning over $365,000) to fund his plans, those citizens’ tax bills would have to rise by over $40,000 annually, an increase of 57%. Given the impossibility of that scenario, even under complete Democratic control of government, the tax hikes would have to trickle down to the American middle class.
“So if Congress decides to widen the pool of taxpayers footing the bill, it would have to raise taxes on the top 5% by 38%; or the top 10% by 32%; or the top 25% by 26%; or the top 50% of taxpayers by 23%. The top 50% of American taxpayers, who already pay 96.9% of all federal income taxes, are those who earn $31,000 (AGI) or more.
“To translate this point into language everyone can understand: if you have an income of $104,000 or more, the plan will cause your tax bill to go up at least an additional $5,300 a year; if you have an income of $62,000 or more, the plan will cause your tax bill to go up at least $2,300 a year. This is on top of the $2,300 increase already assumed by the failure to extend current tax policy.” (emphasis added)
Obama claims to want to “balance the budget and stop spending the Social Security Surplus.” Combining that laudable goal with Obama’s massive new spending would cause the tax bills of the average taxpayer earning $62,000 to rise $5,300, or 61%. For taxpayers earning $104,000, the increase would be over $12,000, or 74%, and for the top 1%, earning over $365,000, “their income tax bill rise by an astounding $93,500 (132%)!”
It is not only individuals would suffer under the Obama Spend-o-rama: “If you want economic growth in this country, it comes out of the small business sector. And when you raise their taxes markedly, it’s going to markedly have an adverse effect on the economy.” This is on top of the $4,100 tax increase which small businesses will face when the Democratic congress refuses to renew the Bush tax cuts.
In his closing, Senator Allard noted that this is not simply a hypothetical discussion; the current debate is about the 2009 budget, the first year of the next president’s administration. It is therefore important (and good politics) to show the American public the ugly details of Obama’s pretty talk.
As Senator Burr pointedly warned, Congress must not “fictitiously propose that the federal government can increase spending and in fact balance it on the backs of a select few. It will be like every other tax increase — we will balance it on the backs of every American who can’t afford any more taxes.”
Even John McCain, who admits not to be an expert on economics, should be able to tear apart Obama’s proposed spending spree. He could take Obama to task gently, saying “If I can see that my opponent’s plans are a recipe for national bankruptcy, any American can.” That leaves Obama either having to defend the indefensible, or backing away from the “progressive” agenda which is much of the basis of his support from naïve liberals, primarily young or rich.
Senator Allard has put Barack Obama in an uncomfortable position. As Allard staffer Steve Wymer put it, the Obama Spend-o-Rama Amendment is “just one step in trying to bring some truth to the budgeting process.”
The Allard amendment went down to a 97-0 defeat late Thursday afternoon, to nobody’s surprise. Although the measure was hastily prepared, simply getting into the public record the scale of Obama’s spending proposals and the tax hikes required to fund them was a worthwhile endeavor. Reached for comment after the vote, Senator Allard’s communications director Steve Wymer noted that "(Allard) voted against it with everyone else. But still, the point was made.”
http://www.humanevents.com/article.php?print=yes&id=25496 McCain unveils economic planBy: Jonathan Martin
April 15, 2008 07:39 PM EST
PITTSBURGH — With tough shots at his Democratic rivals and some criticism of President Bush and the Republican Congress, John McCain (R-Ariz.) began to lay out his economic agenda Tuesday. His speech, heavy on populist rhetoric, mostly offered conservative solutions to revive an economy he described as in need of a boost.
The presumptive GOP nominee called for a host of measures to curb federal spending, cut taxes, help homeowners, and ease consumer pain at the gas pump.
In doing so, McCain sought to carve out a niche for himself between an administration that is scoring poor marks for its stewardship of the economy and two Democratic presidential candidates whose solutions he painted as more harmful than good.
"Both promise 'big change,'" McCain said of Illinois Sen. Barack Obama and New York Sen. Hillary Clinton in a tax day address at Carnegie Mellon University here. “And a trillion dollars in new taxes over the next decade would certainly fit that description.”
Taking direct aim at Obama’s calling card and the title of his best-selling book, McCain said such tax hikes “are the fine print under the slogan of hope: They’re going to raise your taxes by thousands of dollars per year — and they have the audacity to hope you don't mind.”
McCain also hit the two Democrats for their support of home state pork projects and an approach to trade policy he described as “economic isolationism.”
Obama’s camp struck back hard, alluding to McCain’s initial opposition to the Bush tax cuts.
“Senator McCain’s economic plan offers no change from George Bush’s failed policies by going full speed ahead with fiscally irresponsible tax cuts for the wealthiest Americans that John McCain himself one said ‘offended his conscience,'" said Obama spokesman Bill Burton.
Clinton policy director Neera Tanden also sought to tie the Arizona senator to the unpopular incumbent.
“John McCain is offering an economic strategy today that Americans simply cannot afford: a George Bush redux of corporate windfalls and tax cuts for the wealthy that will bankrupt our government and leave working families with the bill,” she jabbed.
But recognizing the president’s unpopularity and the political peril that his party faces this year, McCain used unmistakable language in an attempt to distance himself from both.
Saying the federal government has “a responsibility to act,” McCain called it insufficient “to simply dust off the economic policies of four, eight, or 28 years ago.”
In promising to eliminate both earmarks and corporate welfare, he went even further in offering broad-brush criticism of a party that has largely controlled the levers of federal power for the past eight years.
“We are going to get our priorities straight in Washington — a clean break from years of squandered wealth and wasted chances,” McCain said.
On spending, he was unambiguous in assigning blame to an undisciplined Republican Congress and a president who failed to send back a single one of their appropriations bills.
“In so many ways, we need to make a clean break from the worst excesses of both political parties,” McCain said. “For Republicans, it starts with reclaiming our good name as the party of spending restraint. Somewhere along the way, too many Republicans in Congress became indistinguishable from the big-spending Democrats they used to oppose. The only power of government that could stop them was the power of veto, and it was rarely used.”
McCain also departed from conventional free market rhetoric.
To call the “serious problems” Americans currently face “a ‘correction’ in the market, or a ‘cycle’ of the economy, doesn't make their situation any better, their jobs and homes any safer, their lives any easier,” McCain said, dismissing the cautious language that some in the administration or on Wall Street have used.
Echoing a frequent Obama critique, McCain had tough words for what he deemed the excessive pay of some in corporate America.
“Americans are also right to be offended when the extravagant salaries and severance deals of CEOs — in some cases, the very same CEOs who helped to bring on these market troubles — bear no relation to the success of the company or the wishes of shareholders,” McCain said. “Something is seriously wrong when the American people are left to bear the consequences of reckless corporate conduct, while Mr. Cayne of Bear Stearns, Mr. Mozilo of Countrywide, and others are packed off with another 40 or 50 million for the road."
But if his language sounded like it came out of the Teddy Roosevelt school, his actual proposals were traditional Ronald Reagan small government fare.
He promised to keep the Bush tax cuts in place and go beyond, eliminating the alternative minimum tax, cutting the corporate tax rate by 10 percent, doubling the exemption for dependents and making the R&D tax credit permanent.
Further, he proposed moving toward a flatter tax code by setting up a parallel system which taxpayers could opt into and pay one of two rates.
In addition to making a vow to veto any bill with earmarks, McCain also pledged to freeze discretionary spending on everything but the military and veterans for one year, during which time he would give a thorough scrubbing to federal departments and agencies.
To further pare spending, he proposed a means test for the new prescription drug benefit, forcing elderly citizens who can afford it to buy their own medicine.
As a stopgap measure to reduce fuel prices, McCain called on the federal government to suspend gas taxes for the summer and to stop stockpiling oil in the Strategic Petroleum Reserve.
His most significant break from right-wing orthodoxy was in reiterating his mortgage plan, first put forth last week in Brooklyn, which calls for the Federal Housing Administration to guarantee some homeowners who want to swap out their loan for one more in line with the value of their home.
McCain has drawn some criticism on the right for the proposal and even one of his top economic advisers remains cool toward it.
“I think that of the proposals that have been made for direct intervention [in the mortgage crisis], his is the best,” former Sen. Phil Gramm said dryly, alluding to the plans of McCain and his two Democratic rivals. “I think it’s a tough call.”
Pat Toomey, head of the Club for Growth, went further, calling McCain’s plan “a government bailout for home buyers who made poor decisions.”
Still, Toomey gave overall high marks for the speech.
“He’s promoting pro-growth polices on tax and spending, trade and entitlement reform — that’s all very constructive,” Toomey said, offering an "A-" grade for the effort.
Glenn Hubbard, dean of Columbia University’s business school and former chair of President Bush’s Council of Economic Advisers, called the speech “a good opening step.”
In particular, Hubbard praised McCain’s spending proposals.
“It’s a clarion call to go back to being the party of spending restraint,” he said. “We’ve been on a bipartisan binge the past decade.”
But Irwin Stelzer, director of economic policy studies at the Hudson Institute and author of a piece in the current Weekly Standard encouraging McCain to take more of a populist tack, said the speech was lackluster.
“The word vacuous comes to mind,” Stelzer said.
Pointing to McCain’s admission that he is not an expert on the economy, Stelzer bemoaned the candidate's “lack of an informing principle” on such issues.
“He’s reactive,” Stelzer said. “So when he doesn’t want to see Bill Gates and Warren Buffett getting free drugs, he’s right. But when he sees high gas prices and calls for lower taxes which will increase usage — well, he gets the wrong answer.”
http://dyn.politico.com/printstory.cfm?uuid=53EEA2C7-3048-5C12-003722A0F42B8479
