McCain Edges Away From Bush With Economic Plan

The GOP nominee tries to distance himself, but tax-cut proposals align him with the president.
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Democrats have charged that Sen. John McCain (R., Ariz.) offers nothing but an extension of the Bush administration for a third term, particularly in terms of U.S. policy on Iraq.

In a speech delivered Tuesday at Carnegie-Mellon University, McCain made efforts to distance himself from President Bush by stressing fiscal restraint. Oh, and he suggested a ton of tax cuts to rescue the U.S. from recession.

McCain has spent much of his time recently trying to clinch support from conservatives. According to the Center for Responsive Politics, Republicans have lagged far behind the Democrats in donations. Perhaps his message of small government will bring in more money:

"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 doesn't mention Bush by name, but the president didn't veto any of the grotesque pork-laden omnibus spending bills from 2000 to 2006.

McCain vowed to veto any bill with earmarks and to push for a line-item veto. "I will veto every bill with earmarks until the Congress stops sending bills with earmarks," he said Tuesday. His record on earmarks has been better than the Democrats'. Both Sen. Hillary Clinton (D., N.Y.) and Sen. Barack Obama (D., Ill.) have brought home some bacon for their states, and McCain couldn't go without mentioning Clinton's -- and Sen. Charles Schumer's (D., N.Y.) -- earmark for a Woodstock museum.

McCain also hopes to address growth in the federal government. He plans to review every agency's budget and introduce a discretionary spending freeze, excluding the military and veterans. Furthermore, he would demand greater accountability of government spending. The Bush administration has specialized in no-bid contracts, which have led to scandals, including the recent

resignation

of Housing and Urban Development head Alphonso Jackson. McCain would require agencies to post accurate information for agencies online.

McCain made more overt attacks on Democrats on familiar ground: taxes. The Democratic candidates have suggested ending the Bush tax cuts on the wealthiest Americans, although McCain claims many taxes will rise:

"Americans of every background would see their taxes rise -- seniors, parents, small business owners and just about everyone who has even a modest investment in the market. All these tax increases 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 calls for a slew of tax cuts and tax reforms. He wants to see the Bush tax cuts made permanent, which would favor the wealthiest Americans. He calls for lower corporate taxes to be reduced from 35% to 25%, though he says "corporate welfare" has to end. He proposes further tax cuts to spur American innovation:

"So I will propose and sign into law a reform agenda to permit the first-year expensing of new equipment and technology ... to ban Internet taxes, permanently ... to ban new cellphone taxes ... and to make the tax credit for R&D permanent, so that we never lose our competitive edge."

Again, these cuts will bolster conservative support.

But McCain needs more than conservatives to win in November. He offered several incentives and tax cuts aimed at courting working-class and middle-class independents. The most "populist" proposal would try to lower gas prices. He recommends both suspending federal gas taxes over the summer and purchases for the strategic petroleum reserve. McCain sees this as a stimulus:

"And because the cost of gas affects the price of food, packaging and just about everything else, these immediate steps will help to spread relief across the American economy."

This proposal may not make some conservatives happy. Many conservatives support the idea of a free market, and McCain is trying to alter the price of gas by jiggering the market. Worse, cutting gas taxes could spur demand, forcing prices higher and nullifying the benefits of a tax cut. I guess McCain has to do something to maintain his "maverick" image in the media.

McCain also proposed tax cuts for the middle class. He would phase out the Alternative Minimum Tax, which increasingly has affected everyone, not just the very richest Americans. He has concerns about families' budgets coming under pressure. He proposes doubling the exemption for dependents from $3,500 to $7,000 in an effort to stop inflation from eating into the deduction.

McCain offers Americans both tax cuts and fiscal restraint. Tax cuts will clearly affect tax receipts, though they might be offset by some cuts in spending. His proposals contained no specific price tags. McCain made no mention of military spending aside from eschewing cuts, and he has favored increases in military spending on the stump. Therefore, it will take some time to analyze the numbers and determine whether his plan proves a frugal use of taxpayer funds.

McCain, of course, had to espouse tax cuts to appease the conservative base. It's unclear whether his proposals aimed at the low and middle class will be enough, especially if the economy takes a turn for the worst.