Subject: [big campaign] Re: WSJ: McCain tax cuts would "explode" deficit
From: "Cammie Croft" <[email-masked]>
To: "Adam Jentleson @ American Progress Action" <[email-masked]>
Cc: "big campaign" <[email-masked]>
Date: Tue, 22 Apr 2008 11:48:12 -0400
List-Id: <bigcampaign.googlegroups.com>

FYI: On CNN this morning, Kyra Phillips asked Rudy Giuliani about the WSJ
article ...

KYRA PHILLIPS: "Well, he has also pledged to extend president Bush's tax
cuts. *Let's take a look at what the "Wall Street Journal", a conservative
paper of course, had to say about his tax plan. McCain is proposing tax cuts
that would cause the deficit to explode or would require unprecedented
spending cuts equal to one-third of federal spending on domestic programs.
How do you respond to that*?"

GIULIANI: "A large number of those I proposed myself. I think those are the
tax cuts that will spur the economy. You look at what the democrats want to
do, it would be a disaster for the economy. The capital gains rate would go
from 15% to double or triple. The tax on dividends would go from double to
triple."

GIULIANI: "*I think that the democratic candidates have a very poor
understanding of our economy at the kind of stage it is at right now*."
The complete transcript and the option for the video will be coming out
shortly as part of this morning's media monitoring report.

Cammie

-- 
Cammie L. Croft
Tracking/Media Monitoring Director
Progressive Media USA
[email-masked]
202-609-7679 (office)
206-999-3064 (cell)

On Tue, Apr 22, 2008 at 11:39 AM, Adam Jentleson @ American Progress Action
<[email-masked]> wrote:

>  I know this was in Sarah's clips but thought it worth highlighting --
> great source to cite in the future.  Also includes a handy chart at the
> link.
>
> *
> http://online.wsj.com/article/SB120882415111033181.html?mod=special_page_campaign2008_leftbox
> *<http://online.wsj.com/article/SB120882415111033181.html?mod=special_page_campaign2008_leftbox>
>
> *McCain Tax Cuts Would Bloat Deficit
> Or Take Huge Spending Curbs*
>
> By* LAURA MECKLER*
> April 22, 2008; Page A6
>
> 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.
>
> Once thought of as a deficit hawk, the near-certain Republican
> presidential nominee is now putting more stress on the traditional
> Republican orthodoxy of tax cuts. 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.
>
> With military spending -- about half the total -- likely to rise or
> perhaps stay even, most if not all of the cuts would have to come from
> domestic programs. The discretionary budget, which excludes entitlements
> such as Medicare or Social Security, covers areas such as medical research,
> federal prisons, border security, student loans, food inspections and much
> else.
>
> The $160 billion figure is equal to the total budget in 2007 for the
> departments of Education, Energy, Homeland Security, Justice and State.
>
> 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."
>
> When he talks about cutting spending, Sen. McCain usually focuses on
> congressional earmarks, home-state projects that members of Congress insert
> into spending bills. His stump speech mentions a museum commemorating the
> Woodstock festival in New York and the infamous "bridge to nowhere" in
> Alaska. But earmarks total only about $18 billion a year, according to
> independent estimates.
>
> Sen. McCain and his aides haven't said where he will get his $160 billion
> in annual discretionary-spending cuts. McCain spokesman Tucker Bounds said
> that Sen. McCain will be able to achieve spending cuts others haven't
> because of his commitment to the enterprise.
>
> 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.
>
> "I do suspect McCain would be good at getting rid of some of the
> boondoggles in the Defense Department. But that's not where the big bucks
> are," said Robert Greenstein, executive director of the liberal-leaning
> Center for Budget and Policy Priorities.
>
> He said it would take a "heroic assumption" to conclude that Sen. McCain
> could provide sufficient cuts in defense even to pay for the increases
> coming.
>
> 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."
>
> Asked Sunday where he would find spending cuts, Sen. McCain mentioned
> ethanol subsidies, sugar-price supports and payments to wealthy farmers.
> "We're going to scrub every institution of government," he said on ABC's
> "This Week." "Is there any American that doesn't believe that there's tens
> if not hundreds of billions of dollars that can be saved?"
>
> An analysis of federal spending since 1976 show that there has never been
> a cut in domestic spending as large as what Sen. McCain is proposing, said
> Richard Kogan, a senior fellow at the Center on Budget and Policy
> Priorities. The biggest was in 1982, led by President Reagan, when federal
> spending was cut by about 17%; most of the cuts were reversed over the next
> few years, he said.
>
> 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 took a small step in that direction by suggesting an increase
> in prescription-drug premiums for wealthy seniors. But that proposal raises
> only about $2 billion over five years, McCain aides said.
>
> Sen. McCain has backed off his earlier promise to eliminate the budget
> deficit by the end of his first term and now says it may take two terms.
>
> As for tax cuts, Sen. McCain promises to cut the corporate tax rate to 25%
> from 35% and allow corporations to deduct the full cost of equipment in the
> first year. He would double a tax break for families with children and
> eliminate the alternative minimum tax.
>
> 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."
>
>
> >
>

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