"The McCain Deficit: Douglas Holtz-Eakin Continues To Debate With Himself"
Our guest blogger is James Kvaal, Domestic Policy Advisor at the Center for American Progress Action Fund.
The story so far: Senator John McCain has proposed $300 billion a year in tax cuts, but – as The Economist wrote – “the savings in government spending he promises will not come anywhere close to paying for the tax cuts.”
Yesterday, McCain economic advisor Douglas Holtz-Eakin defended his McCain budgeting over at the National Review, arguing that McCain’s proposals will restrain spending and promote economic growth.
But, as Ruth Marcus pointed out, two years ago Holtz-Eakin sounded very different. He said then that, realistically, “government will not be getting any smaller” due to widespread public support for government’s activities. Even a “tremendous effort” by Congress to eliminate wasteful spending totaled less than 0.07 percent of the economy. (McCain’s $300 billion tax cut equals approximately 2 percent of the economy.)
Maybe that is why Holtz-Eakin’s new argument focuses on McCain’s cuts to entitlement programs like Social Security and Medicare. But McCain has already proposed cutting Social Security and Medicare benefits to restore those programs’ solvency. Does he really want even more cuts — hundreds of billions of dollars more — to pay for his tax cuts, as Angry Bear wonders?
It seems more likely that Holtz-Eakin is changing the subject, preferring to discuss the long-run entitlement problem rather than the short-run deficit problem. But adding hundreds of billions, even trillions, to the debt now will only make our long-run problems worse.