When asked at the January 10, 2008 GOP debate what the government should do to respond to the looming recession, McCain responded:
We need to stop the spending. And that way we can get our budget under control and we can have a — basically a strong, fundamental fiscal underpinnings.
The second thing that we need to do, of course, is stop spending $400 billion a year overseas to oil-producing countries that come right out of our economy immediately. Some of that money goes, unfortunately, to fund terrorist organizations.
We’ve got to — and we can use Detroit for this, where there’s tremendous technology in the state of Michigan, and tremendous abilities to develop technologies to reduce this dependency on foreign oil, and eventually eliminate it, and stop this outflow of some $400 billion a year. Education and training is obviously important, but stop the spending.
How does McCain’s proposal to suspend the federal gas tax from Memorial Day to Labor Day violate those precepts?
McCain’s Holiday Would Cost $11 Billion. Suspending the gas tax — whose revenues are fully dedicated the federal highway trust fund that maintains our crumbling infrastructure — for three months would cost $11 billion. McCain has not said how — or if — he would replace those revenues. [CAPAF, 4/15/08]
McCain’s Holiday Sends More Money ‘Out Of Our Economy Immediately.’ The Wall Street Journal notes “Many economists have also questioned the wisdom of suspending or cutting gas taxes; doing so, they say, simply stimulates more consumption of gasoline.” In McCain’s own words, that increased consumption would send more money “out of our economy immediately” to oil-producing countries, “unfortunately, to fund terrorist organizations.” [WSJ, 4/15/08]
Cutting Transportation Investment Kills Jobs. The Wall Street Journal asked: “Relief — or fewer jobs? According to a white paper circulated on Capitol Hill last week by the U.S. Transportation Department, every $1 billion of federal highway investment supports 34,779 jobs.” McCain’s plan could put over 300,000 workers on an unpaid “holiday.” [WSJ, 4/15/08]
McCain’s Holiday Threatens ‘Fundamental Fiscal Underpinnings.’ McCain spokesman Brian Rogers said “general revenue transfers” would pay for the “holiday” — increasing the budget deficit by $11 billion. As Matthew Jeanneret, a spokesman for the American Road & Transportation Builders Association, says: “It might be good politics. But it is shortsighted, and it won’t do anything to stimulate the economy.” [MSNBC, 4/15/08]
McCain’s plan would push gas prices up and force policymakers to choose between killing jobs and infrastructure investment or blowing up the budget.