During the 2000 campaign people said much the same thing about Mr. Bush; those of us who looked hard at his policy proposals, especially on taxes, saw the shape of things to come. And a look at what Mr. McCain says about taxes shows the same combination of irresponsibility and double-talk that, back in 2000, foreshadowed the character of the Bush administration. The McCain tax plan contains three main elements. First, Mr. McCain proposes making almost all of the Bush tax cuts, which are currently scheduled to expire at the end of 2010, permanent. (He proposes reinstating the inheritance tax, albeit at a very low rate.) Second, he wants to eliminate the alternative minimum tax, which was originally created to prevent the wealthy from exploiting tax loopholes, but has begun to hit the upper middle class.
Third, he wants to sharply reduce tax rates on corporate profits. According to the nonpartisan Tax Policy Center, the overall effect of the McCain tax plan would be to reduce federal revenue by more than $5 trillion over 10 years. That’s a lot of revenue loss — enough to pose big problems for the government’s solvency.
But before I get to that, let’s look at what I found truly revealing: the McCain campaign’s response to the Tax Policy Center’s assessment. The response, written by Douglas Holtz-Eakin, the former head of the Congressional Budget Office, criticizes the center for adopting “unrealistic Congressional budgeting conventions.” What’s that about? Well, Congress “scores” tax legislation by comparing estimates of the revenue that would be collected if the legislation passed with estimates of the revenue that would be collected under current law. In this case that means comparing the McCain plan with what would happen if the Bush tax cuts expired on schedule.
Mr. Holtz-Eakin wants the McCain plan compared, instead, with “current policy” — which he says means maintaining tax rates at today’s levels. But here’s the thing: the reason the Bush tax cuts are set to expire is that the Bush administration engaged in a game of deception. It put an expiration date on the tax cuts, which it never intended to honor, as a way to hide those tax cuts’ true cost. The McCain campaign wants us to accept the success of that deception as a fact of life. Mr. Holtz-Eakin is saying, in effect, “We’re not engaged in any new irresponsibility — we’re just perpetuating the Bush administration’s irresponsibility. That doesn’t count.” It’s the sort of fiscal double-talk that has been a Bush administration hallmark. In any case, it offers no answer to the principal point raised by the Tax Policy Center analysis, which has nothing to do with scoring: the McCain tax plan would leave the federal government with far too little revenue to cover its expenses, leading to huge budget deficits unless there were deep cuts in spending.
And Mr. McCain has said nothing realistic about how he would close the giant budget gap his tax cuts would produce — a gap so large that eliminating it would require cutting Social Security benefits by three-quarters, eliminating Medicare, or something equivalently drastic. Talking, as Mr. Holtz-Eakin does, about fighting waste and reforming procurement doesn’t cut it.
When Paul noted in 2000 similar reservations about the things George W. Bush was saying, he was labeled the Shrill One. Now a lot of his former critics on the right – people with integrity such as Bruce Bartlett and Andrew Sullivan – have joined Paul in their shrillnees. Paul also tries to balance this off with criticisms of the Democrats:
Now, Mr. McCain isn’t unique in making promises he has no way to pay for — the same can be said, to some extent, of the Democratic candidates. But Mr. McCain’s plan is far more irresponsible than anything the Democrats are proposing, and the difference in degree is so large as to be a difference in kind. Mr. McCain’s budget talk simply doesn’t make sense.
When I said something simlar, a few AB readers wanted me to compare the fiscal irresponsibility of McCain v. the Democrats. Paul says McCain’s is larger but has not put forth a quantitative side-by-side scoring of the fiscal proposals of each of these candidates. If someone does perform a credible analysis for all three candidates – let us know.
Update: Andrew Sullivan says the CBO has come through:
According to the CBO, McCain’s plan is the most fiscally damaging … the proposals by Senators Hillary Rodham Clinton and Barack Obama, the impact of either on the deficit would be less than one-third that of the McCain plan.
My only complaint here is that Andrew calls fiscal irresponsibility a leftist view. I’ll admit it ain’t fiscal conservatism but this liberal is a member of the deficit hawk wing of the Democratic Party.