I was wondering when some reporter for a real news outlet was going to call McCain on his b.s. Bloomberg’s new Washington Bureau chief, Al Hunt (a well-respected veteran, formerly with the Wall Street Journal) comes down on McCain like a ton of bricks.
Note to other reporters: this is how it’s done.
The Republican standard-bearer isn’t comfortable in the economic arena. He started off the week talking about a “slowing” economy. Slowing? Most Americans think it’s going overboard and threatening to take them down.
He pledged to balance the budget by the end of his first term, which is inconsistent with the lavish tax cuts he also promises. He offered the same Social Security prescriptions that President George W. Bush failed to sell, insisting that somehow a more Democratic Congress would be receptive.
Contradictions, detours and flip-flops abound. On Bloomberg Television this spring, the Arizona Republican said there’s been “great progress” economically under the Bush administration; the next day, he said Americans are “hurting badly” and aren’t better off than they were eight years ago.
The centerpiece of the McCain health-care proposal is enabling more families to buy private insurance. It’s tough to find a family with a severely ill or injured child who doesn’t despise its private health insurer.
In this campaign, the contrast between the estate tax and various proposals to help the working poor are illustrative.
The estate tax, or “the death tax” as the Republicans, in a public relations coup have labeled it, is assessed on fewer than 2 percent of the wealthiest Americans. For a couple, the first $7 million is exempt in 2009, as is anything given to charity; there are numerous loopholes around what’s left.
McCain would raise that exemption to $10 million and lower the rate to 15 percent. Democrat Barack Obama would keep the 45 percent rate on estates over $7 million.
The McCain approach would cost the government $175 billion over 10 years more than Obama’s, and most of the benefit would go to wealthy heirs who’ve done little to earn it — affirmative action for the rich.
Less than one-third of that amount, $50 billion, would fund Obama’s proposal to expand the earned-income tax credit, money given to the working poor to offset payroll taxes that typically eat up 15 percent of their income. It’s one of the most effective anti-poverty and economically stimulative measures: these people have no choice but to spend the money.
The Tax Policy Center, a venture of the Urban Institute and Brookings Institution, analyzed the candidates’ proposals: The working poor would get a $1,459 tax cut under Obama, more than double what McCain proposes.
The top 1 percent, mostly Americans averaging more than $1 million a year, would get a $38,389 tax increase under Obama, compared to a $126,951 tax cut under McCain.
“Income inequality would be exacerbated under McCain, says Len Burman, the director of the center who has objections to some specifics of each plan. “Under Obama, the distribution of after-tax income would become slightly more equitable.”
McCain convincingly argues that the cost of entitlement programs must be curtailed. Sometimes the Republican nominee says higher payroll taxes are off the table, meaning the sacrifice falls mostly on middle- and working-class beneficiaries.
In an interview, Carly Fiorina, a top adviser, explains that any tax increases on “middle- and working-class” Americans are off limits. She says if a bipartisan coalition is “creative enough” to fashion tax increases on wealthier Americans, that may prove palatable.
That’s encouraging, until you consider that McCain doesn’t always listen to his economic advisers. A few months ago, his top advisers counseled him that any reduction in the gasoline tax was bad energy and economic policy. A short while later, he advocated suspending the 18-cent-a-gallon tax for the summer.
Later, one of those puzzled economists wondered if he had forgotten to use the word “not.”
Footnote By now, of course, McCain has repudiated Fiorina as he earlier repudiated Gramm, leaving his position even less coherent.