McCain fleshes out his economic plan

Presumptive GOP presidential nominee John McCain in recent weeks has put much time and effort into an attempt to bolster his credentials on a core issue of US politics: the domestic economy.

He's issued an economic plan more detailed than any he's talked about before. He's toured hardscrabble towns in an attempt to convey compassion for those worried about the future of their paychecks. He's used space provided him by the continuing Democratic slugfest to address an issue on which experts have long considered him to be weak.

It's a stab at political rebranding that may be long overdue, say some experts. But they add that it might be difficult for Senator McCain to craft an economic message that appeals both to the GOP's tax-cutting faithful and to the independents and moderates that the Arizona lawmaker needs to attract to win in November.

"McCain is trying to distance himself from Bush on the economy, but the eventual Democratic nominee will do everything they can to make him look like he's changed his first name to 'George,' " says Larry Sabato, director of the Center for Politics at the University of Virginia in Charlottesville.

If "McCainomics" can be described in a sentence, it might be this: traditional GOP tax-cutting, with a dash of populism sprinkled on top.

To begin with, McCain would make President Bush's tax cuts permanent, rather than let them expire in coming years, as current law calls for. Critics say this is something of a switch for a lawmaker who opposed the tax cuts as too expensive when they were proposed.

He would eliminate the Alternative Minimum Tax, which has eaten into the incomes of middle-class Americans. This move would cost $60 billion a year, according to campaign estimates.

McCain would double the personal exemption for dependents from $3,500 to $7,000, reduce the corporate tax rate from 35 to 25 percent, and establish a permanent new research-and-development tax credit. At the April 15 speech outlining his economic plan, he also called for the elimination of the federal gasoline tax this summer – a move that, strictly speaking, the next president would have to go back in time to accomplish.

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.

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