Don Pedro reports:
I spent my lunch hour at the Urban Institute today, listening to Obama econ advisor Austan Goolsbee debate McCain econ advisor Doug Holtz-Eakin on the candidates’ tax plans … He framed his presentation by saying that there were three problems with the Bush tax program:
1. It was fiscally irresponsible, creating a huge sea of red ink.
2. It was sold using budget gimmickry.
3. It was massively tilted toward the rich.
On all three points, he showed that the McCain program is worse. In his words, it would create deficits that are twice as big and is twice as regressive. One of his strongest points was when he said (paraphrasing), if we take McCain at his word and accept that he’s going to implement all the tax cuts he’s calling for AND his promise to balance the budget by 2013, the only possible conclusion is that he will have to cut Social Security and Medicare by 60%, all but dismantling the programs. He also highlighted the fact that the headline analysis by the TPC, which is based on Holtz-Eakin’s representation of McCain’s proposals, doesn’t even include another $2.8 trillion of lost revenue (over four years) for the policies that McCain has in his stump speech. During the Q&A, Holtz-Eakin objected to this figure, until Goolsbee showed him that it appears in an addendum table (R4) to the TPC analysis. Goolsbee practically begged the assembled crowd of policy geeks and journalists to call out the campaign on the complete insanity of the McCain proposals. He said (paraphrasing again) that if the ludicrous McCain proposals are accepted as a serious plan, no one will offer a meaningful campaign tax proposal ever again.
So what was the rebuttal to this devastating critique:
Holtz-Eakin said, well, “Taxes aren’t everything” (actual quote, at a debate on tax policy) and talked up McCain’s proposals on the environment and renewable energy. Rather than make any attempt to rebut Goolsbee’s takedown, he argued that reducing taxes increases growth and that the spending side needs to be considered as well. Of course it was pointed out that there is no evidence that tax cuts financed by deficits do anything for growth, and that McCain hasn’t identified any major spending cuts beyond some pocket change from earmarks and vague “entitlement reform.” Somehow, Holtz-Eakin managed to get away without offering any counter to Goolsbee’s critique.