McCain fleshes out his economic plan

His challenge is to appeal both to the GOP's tax-cutting faithful and to independents and moderates.

from the April 28, 2008 edition

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McCain's tax cuts (excluding the gas tax holiday) would cost some $200 billion a year, according to his campaign. They would be offset by eliminating pork-barrel projects from the federal budget, freezing nondefense discretionary spending for at least one year, and reducing the growth of Medicare spending, among other moves.

As for the populist part, McCain railed against the extravagant salaries and severance deals of CEOs in his April 15 speech. Since then, he's toured small towns hard hit by the economic downturn and praised their work effort and role in the US economy. At the same time, he said increased government spending is not the answer to their woes.

Government "can't do your work for you," McCain said on April 23 in Inez, Ky. "And you've never asked it to."

Nationally, McCain is known for his security credentials, not his economic ones, note political analysts. McCain famously once said that he did not know much about the economy, notes Cal Jillson, a professor of political science at Southern Methodist University in Dallas.

"He and his people decided they needed to address that [misstep]," Professor Jillson says.

In the Senate, McCain has been known for his opposition to what he sees as wasteful government spending and a traditional green-eyeshade approach to balancing the federal budget. At the start of the campaign, he indicated he'd balance Uncle Sam's books by the end of his term in office. Now, with his tax-cutting agenda fully outlined, he appears to have pushed back the potential date for black ink to the end of a possible second term.

Campaign officials say that McCain's tax proposals are offset by his budget initiatives. Budget hawks differ, saying that the savings from eliminating earmarks is exaggerated, among other things.

"The numbers don't come close to adding up," says Robert Bixby, head of the Concord Coalition, a budget watchdog group in Arlington, Va.

Not that the Democratic candidates have been any more rigorous in pursuit of fiscal prudence, according to Mr. Bixby. He says both Hillary Rodham Clinton and Barack Obama have proposed extensive, and expensive, healthcare plans, without fully preparing the public for their budget impact. "All the candidates have the same basic problem: They give specific policies that they will do, while providing only vague promises about how they will pay for them," Bixby says.

But it is the Republicans who currently control the White House – and that is a problem for McCain, in terms of economic policy. Voters tend to hold an incumbent party responsible for sour economic times during an election year.

McCain's task is to propose economic policies that appeal to Republican voters, without appearing as simply Bush, Part 2.

"If the recession is not short and shallow, it will be extremely difficult for him to win," says Professor Sabato of the University of Virginia.

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