Pocketbook policies

"Pocketbook policies" Continued...

Issue: "Home again," July 12, 2008

The left-leaning Tax Policy Center says Obama's plan to allow tax cuts to expire for higher-income workers would raise about $1.2 trillion in revenue over 10 years. But even if that figure is accurate, it wouldn't cover all of Obama's spending plans.

Others are dubious about Obama's plan to use Iraq War funds to pay for programs, saying that money should be considered emergency spending. During the primary season, Clinton economic adviser Gene Sperling said: "When Iraq spending goes away, it goes away. You don't use it as a pay-for."

McCain's tax cuts would equal about $650 billion a year, and McCain says he would make up for the breaks by reducing federal spending. He proposes eliminating all congressional earmarks and cutting spending by about $160 billion a year. "We're going to scrub every institution of government," McCain told ABC.

But even fiscal hawks aren't sure McCain could secure the necessary cuts. Robert Bixby of the Concord Coalition, a group that promotes fiscal discipline, called McCain's chances of making such deep cuts "nonexistent." That's partly because a Congress likely controlled by Democrats would fight such an agenda.

J.D. Foster, a senior fellow at the Heritage Foundation, says each candidate's approach to the economy offers insights into their broader philosophy of government. He says Obama's approach communicates: "Big government is good" and that "we're wiling to give up a fair amount of economic growth if we can redistribute the fruits of our economy more broadly."

McCain's philosophy, says Foster, is "more eclectic." The senator's economic proposals promote smaller government, lower taxes, free trade, and shoring up the economy before redistributing wealth, but a few questions remain.

For example, McCain isn't as clear about his views on the regulation of industry: The senator supports an expensive cap-and-trade program to reduce greenhouse emissions. The proposal would impose stiff regulations and cost billions and would have widespread consequences for other areas like financial markets, labor laws, and consumer protections. "You can go too far in all of these areas in ways that are really harmful," says Foster. "And right now McCain's views aren't clear."

One thing is clear: Americans are worried about the economy and aren't pleased with Bush. A recent Wall Street Journal/NBC poll found 73 percent disapprove of the president's performance on the economy. That includes 41 percent of Republicans.

When a reporter suggested to McCain that the economy could be a daunting issue for him, McCain replied: "An astute observer."

On the record

A look at key points in candidates' economic plans

Barack Obama:

  • Give middle class a tax break, including a $1,000 tax cut for workers making below $150,000.
  • Allow tax cuts to expire for higher-income workers, and raise capital gains tax.
  • Create a $10 billion fund to ward off home foreclosures.
  • Renegotiate terms of North American Free Trade Agreement (NAFTA).

John McCain

  • Double the tax exemption for families with dependents.
  • Maintain current income tax rates.
  • Lower corporate tax rate, and keep unchanged the capital gains tax.
  • Phase out Alternative Minimum Tax.
  • Strongly support NAFTA.
Jamie Dean
Jamie Dean

Jamie lives and works in North Carolina, where she covers the political beat and other topics as national editor for WORLD Magazine. Follow Jamie on Twitter @deanworldmag.


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