Sky-high gas prices mean hardship for American families but huge profits for big oil companies.

According to a new study from the Center for American Progress Action Fund, their U.S. profits from the last 12 months were the equivalent to $236 from every single person with a drivers license in America.

In the past year, oil and gasoline prices have broken all records. Oil reached $147 a barrel, and gasoline hit a new high of $4.11 a gallon earlier this month. Oil prices were 90 percent higher over the past three months than they were a year ago.

Today, Exxon Mobil announced that they had made $11.7 billion in the last three months, the most profitable quarter ever for an American company.
The other big five oil companies announced earnings 26% higher than this same period last year, putting them on track to break last year’s record profits.

High prices may be good for oil company profits, but they’re bad news for American families. Higher gasoline prices are costing ordinary families hundreds, or even thousands, of dollars a year.

In the past 12 months, the five largest oil companies have earned $148 billion world wide, including an estimated $47 billion in the United States. To put these numbers in perspective: if these U.S. profits were distributed evenly among American drivers, it would equal about $236 per driver.

At a time of record profits, the United States should be focused on providing relief to families, not padding the profits of big oil with John McCain’s tax plan that would give $4 billion in tax breaks to America’s five largest oil companies and $1.2 billion to Exxon Mobil alone.

For more information, check out the Center for American Progress Action Fund’s full report here.

UPDATE: Chevron has since released their Q2 2008 profits: $5.98 billion in the last three months, up 11% from the same period last year. While slightly less than predicted in our report, it doesn’t significantly change the per-driver share of the five companies’ U.S. profits over the past year which remains approximately $236 per American driver.

Our guest blogger is Daniel J. Weiss, a Senior Fellow and the Director of Climate Strategy at the Center for American Progress Action Fund.

Tom DeLay may be gone but he is not forgotten. During yesterday’s vote on the Commodity Markets and Transparency Act (H.R. 6604) to rein in oil profiteers, House Republican leaders pressured 13 of their members to switch their vote from “yes” to “no.” Thanks to these strong arm tactics and weak members, the bill to lower gasoline prices by controlling profiteers failed by a vote of 276-151, falling ten votes shy of the two-thirds majority required for passage under the suspension of the House rules. Once again, the GOP leadership used their power to help keep oil prices and profits high, while hurting the average driver.

Fadel Gheit, Managing Director and Senior Oil Analyst, Oppenheimer & Company testified before the House Energy and Commerce Committee:

I believe the surge in crude oil price, which more than doubled in the last 12 months, was mainly due to excessive speculation and not due to an unexpected shift in market fundamentals.

During the alloted time for voting, 291 members cast “yes” votes – more than enough to pass the bill. Then Minority Leader John Boehner (R-OH), Whip Roy Blunt (R-MO) and their minions went to work. Thirteen Republicans flipped and joined the 16 Democrats and 122 Republicans already in opposition. Final result: the bill failed, and profiteers will continue to drive up oil prices.

The “Threatened Thirteen” who switched their votes to oppose controls and oversight on Enron-like profiteering:

– Tom Cole (R-OK), Chair of the National Republican Congressional Committee
– Andy Crenshaw (R-FL)
– David Davis (R-TN)
– Frank Lucas (R-OK)
– Cathy McMorris Rodgers (R-WA)
– John Peterson (R-PA), retiring; House leader for oil drilling in protected coastal areas
– Joseph Pitts (R-PA)
– Rick Renzi (R-AZ), retiring due indictment for fraud, other charges
– Mike Rogers (R-MI)
– Jim Saxton (R-NJ), retiring
– Jean Schmidt (R-OH)
– John Sullivan (R-OK)
– Michael Turner (R-OH)

This story feels familiar because it is. In October 2005, then House Majority Leader Tom DeLay (R-TX) got three members to switch their votes in favor of a bill to weaken the Clean Air Act and other environmental safeguards to pass “Gasoline for America’s Security Act.” It would have eliminated health protections to help big oil companies build refineries. (Fortunately, it died in the Senate.) So although Tom DeLay is gone due to an indictment for felony conspiracy, his replacements still use the “hammer” from DeLay’s old toolbox.

Today, in a Washington Times op-ed, Bill O’Reilly complains that if President Bush’s tax cuts “on those making $250,000 or more” are repealed, “me and other rich folks” — who as “part of the 1 percent of Americans that paid an astounding 40 percent of all federal income tax in 2006″ — would have to finance “folks who dropped out of school, who are too lazy to hold a job, who smoke reefers 24/7“:

That means people who drink gin all day will get some of my hard-earned money. Folks who dropped out of school, who are too lazy to hold a job, who smoke reefers 24/7 all will get some goodies in the mail from UncleBarack and Aunt Nancy, funded by me and other rich folks.

O’Reilly’s characterization of the 99% of Americans who earn less than $250,000 a year notwithstanding, his argument that the richest Americans are overburdened by taxation is demonstratively false. According to Internal Revenue Service data, “the share of income reported by the very wealthy has risen faster than the group’s share of income taxes.”

In fact, “the average tax rate of the wealthiest 1% fell to its lowest level in at least 18 years,” allowing the wealthiest 1% of Americans to garner “the highest share of the nation’s adjusted gross income for two decades, and possibly the highest since 1929.” The “average tax rate in 2006 for the top 1%, based on adjusted gross income, was 22.8%,” down from “28.9% in 1996, and…24% in 1988″:

After calling the “present” Social Security “setup” — in which “we are paying present-day retirees with the [payroll] taxes paid by young workers in America today” — “an absolute disgrace,” Sen. John McCain (R-AZ) reversed his pledge to not raise payroll taxes and suggested that he might preserve the “present setup” by increasing payroll taxes:

STEPHANOPOULOS: So, that means payroll tax increases are on the table, as well?

MCCAIN: There is nothing that’s off the table. I have my positions, and I’ll articulate them. But nothing’s off the table.

I don’t want tax increases. Of course I’d like to have young Americans have some of their money put into an account with their name on it. But that doesn’t mean that anything is off the table…

McCain’s reversal “drew a sharp rebuke Monday from conservatives” and has led the McCain campaign to backtrack from the senator’s promise that “everything is on the table.” During an appearance on the Fox News Channel today, Tucker Bounds, McCain’s national spokesperson, said that raising the payroll tax is “absolutely out of the question”:

KELLY: You’re off point. We’re talking on a go-forward basis. McCain gets in the White House, is he going to raise the payroll tax? Might the Social Security tax go up? Is that on the table?

BOUNDS: No Megyn there is no imaginable circumstance where John McCain would raise payroll taxes. It’s absolutely out of the question.

Watch a compilation:

In fact, McCain has gone back and forth on increasing the payroll tax:

– In 2005 on Meet the Press, McCain said, “As part of a compromise I could” support lifting on the cap on Social Security taxes to apply them to incomes above $90,000. [MSNBC, 2/20/2005]

- During an interview with the National Review, McCain promised to not raise payroll taxes under any circumstances. [National Review, 3/5/2007]

- In 2007 on Fox News Sunday, McCain denied his earlier comments and said, “I want to right now tell you I will not support a tax increase. I don’t see how it would be — it’s off the table, certainly, now.” [FNC, 4/30/2007]

- In 2007, McCain said, “I am against tax increases. I am against increases in taxes. I think there are ways to fix Social Security without that.” [SFSSS, 6/2007]

Lifting the current payroll tax cap (currently $102,000) “on the employer side to make businesses pay Social Security taxes on all of the income of the highest paid employers…is the fairest way to help shore up the finances of Social Security“:

According to the Social Security and Medicare Board of Trustees, the longrange, 75-year actuarial deficit is equal to 1.95 percent of taxable payroll. Eliminating the cap on both the employer and employee side would be more than enough to bring the system into long-range balance. Removing the cap on the employer side would thus go a long ways toward restoring solvency as well as help ensure greater progressivity and fairness in the payroll tax.

Yesterday, Senate conservatives voted down bipartisan legislation that would have “provided an additional $2.5 billion in funding for the Low-Income Home Energy Assistance Program (LIHEAP),” a federal program “that helps low- income families pay their cooling and heating bills.”

Arguing that “the chamber should focus on crafting a comprehensive plan to address high energy costs before taking up specific pieces of the debate,” conservatives insisted that drilling for more “gas and oil” would do more to help struggling families pay for heating oil.

Watch a compilation video of conservative senators pushing the false myth that drilling will help low-income families pay their heating bills:

But drilling for oil will do nothing to “alleviate and bring down those natural gas prices for us.” As the Energy Information Administration (EIA) has explained, “access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030.” But because United States demand for oil far outstrips production — we consume 25 percent of the world’s supply but have two percent of the proven reserves — further exploitation of domestic resources will not have a long-term impact either. After 2030, the EIA found, “any impact on average wellhead prices is expected to be insignificant.”

This winter, the “average cost of heating a home…will total about $1,114 – 14.6 percent more than last year,” forcing “low-income families [to] spend on average about 15 percent of their income on home energy bills.” Unfortunately, rather than voting for substantive relief, conservatives continue to propagate false myths for political purposes.

Transcript: Read more

At an event at the Tax Policy Center last Wednesday, McCain adviser Douglas Holtz-Eakin defended the draconian cuts to spending required to balance McCain’s budget and pay for his tax cuts for corporations and the wealthy by saying:

The reception among the Washington establishment has been one part disbelief — because, oh my god, no one actually does that in Washington (that’s not true they’ve just forgotten) — and one part horror that he might succeed. Well, the horrified folks better get ready.

Listen here:

The “Washington establishment” aren’t the only folks who are horrified by what would need to be a 40% cut in non-defense domestic spending. Here are some others:

–340,000 kids who’d lose Head Start funding

–2.1 million grade-school students who’d be effectively cut from Title 1 school funding

–1.6 million aspiring college students who’d lose access to Pell Grants

–3.4 million families who would lose WIC assistance for low-income women, infants, and children

Better get ready.

Our guest blogger is Robert Gordon, Senior Fellow at the Center for American Progress Action Fund.

Today, the McCain campaign is putting forward economist Martin Feldstein as a surrogate.

Feldstein is widely acknowledged as the “chief intellectual force behind privatization” of Social Security. That’s Feldstein’s own term. He wrote “The Case for Privatization” and “Privatizing Social Security: The Ten Trillion Dollar Opportunity.”

McCain personally endorsed Bush’s privatization plans as recently as March, but yesterday, he said “there is nothing I would demand” in a Social Security package and even said that tax increases are not “off the table.”

“Social Security privatization may be another example of the McCain campaign’s private agenda — the agenda the campaign keeps to itself.

Our guest blogger is Daniella Gibbs Leger, the Vice President for Communications at American Progress Action Fund.

Last week I attended the UNITY Conference in Chicago. Along with over 7,000 journalists of color, I was wondering why Sen. John McCain would pass up the opportunity to speak to such a large gathering of reporters, and now we have our answer. He was busy getting ready to flip-flop on affirmative action. On ABC’s This Week, McCain reversed himself and came out in support of Ward Connerly’s attempt to end affirmative action in Arizona.

Ten years ago, McCain called a similar ballot initiative “divisive.” But back then he wasn’t running for President, trying to appeal to wary conservatives. McCain’s explanation for this flip is that he “doesn’t support quotas.” That’s great. But that’s not what Connerly is trying to outlaw.

Connerly is on quest to not allow public institutions to “…grant preferential treatment to, any individual or group on the basis of race, sex, color, ethnicity or national origin, in the operation of public employment, public education or public contracting.” That’s not about quotas, Sen. McCain.

Perhaps he didn’t read the referendum first. But as the Senator from Arizona, I would expect him to know the details of such a controversial ballot initiative in his home state. I look forward to hearing the Maverick McCain explain his way out of this one.

McCain adviser Douglas Holtz-Eakin responded yesterday to a recent report by the Tax Policy Center, which found a $2.8 trillion gap between McCain’s public economic proposals and what his advisers had been telling tax experts in private.

Slate reports:

Douglas Holtz-Eakin, McCain’s chief economic adviser, says the numbers he provided to the TPC aren’t secret—they’re the same ones he provides to anyone who asks. He also disputes the way the study takes suggestions McCain has made on the stump out of context. “This is parsing words out of campaign appearances to an unreasonable degree,” Holtz-Eakin said. “He has certainly I’m sure said things in town halls” that don’t jibe perfectly with his written plan. But that doesn’t mean it’s official.

Two problems: the numbers Holtz-Eakin gave to the Tax Policy Center in their initial analysis weren’t available to “anyone who asks,” and pointing out the gaping distinctions between what McCain says on the stump and what his advisers say in private, is far from parsing.

For months, the McCain campaign had not offered specific numbers on his profligate budget proposals. In June, Robert Bixby of the Concord Coalition, a prominent advocacy group for balanced budgets, told Bloomberg news: “I haven’t received anything, and if some of the other groups have then I’ll be really ticked off…If he’s got some more complete budget proposal he can send I’d love to get it.”

Detailed figures did finally appear publicly in the first Tax Policy Center report and later in the Washington Post, but are still not available on the campaign’s web site. And no wonder: there are still serious inconsistencies between what his advisers provide to the wonks at the Tax Policy Center (and the editorial board of the Washington Post) and what appears on McCain’s web site and in his stump speeches.

As Douglas Holtz-Eakin himself has said, only “Senator McCain speaks for Senator McCain.” Silly us, we believed him.

Two examples of McCain’s inconsistencies after the jump. Read more

Yesterday, during an event at the Tax Policy Center, Sen. John McCain’s (R-AZ) senior economic adviser Douglas Holtz-Eakin repeated the false claim that McCain’s economic proposal has “no tax cuts anywhere for the wealthy”:

And what Sen. McCain has tried to do is to keep the kinds of taxes that would effect small business where they are…Top rate right now is 35 percent. Under John McCain, 35 percent. Dividends 15 percent, John McCain 15 percent. Capitol gains 15 percent, John McCain 15 percent. No tax cuts anywhere for the wealthy. Instead a tax policy that maintains the ability of small business…to do what they’re doing right now…

Listen:

But the Wonk Room, the Tax Policy Center, and even the National Review argue that McCain’s plan is, in fact, tilted towards the wealthy. The latest Tax Policy analysis concludes:

Senator McCain’s tax cuts would primarily benefit those with very high incomes, almost all of whom would receive large tax cuts that would, on average, raise their after-tax incomes by more than twice the average for all households. Many fewer households at the bottom of the income distribution would get tax cuts and those tax cuts would be small as a share of after-tax income.

Indeed, the report goes on to claim that “McCain’s proposal would make the tax system even more regressive than the system created by the 2001–06 cuts”:

- Households in the top 1 percent of the income distribution would receive average increases in after-tax income of more than 8 percent, in addition to their large benefits under the tax legislation already enacted this decade.

- Households in the middle of the income distribution would receive an additional 1.4 percent increase in after-tax income, on average.

- Those at the bottom would receive tax cuts averaging just 0.6 percent of income.

Thus, if Holtz-Eakin can’t find the tax cuts for the wealthy “anywhere,” he’s not looking hard enough.

In 1955, Emmett Till, a 14-year-old black boy “was beaten and shot to death for allegedly whistling at a white woman in segregated Mississippi. An all-white jury took 67 minutes to acquit two white men of the murder; months later, they admitted the crime and spent the rest of their lives in freedom.”

In an effort to bring Till’s killers to justice, a bipartisan majority in the House passed the Emmett Till Unsolved Crimes Bill, authorizing a “potential $10 million per year to be added to the Department of Justice budget for the purpose of investigating and prosecuting outstanding Civil Rights era crimes.”

Over a year later, Sen. Tom Coburn (R-OK) is still blocking the bill from becoming law:

I agree with the Emmett Till bill, I just think we ought to pay for it. Surely we can find the money. They can say whatever they want to say. They’re playing a game, but they’re very loose with the facts.

But the game is all Coburn’s. The bill, which would cost “less than $1 per American in 2008,” has the support of the Bush administration, the Department of Justice and the majority of Republicans.

According to Sen. Chris Dodd (D-CT), “this legislation does not distribute new funds“:

Instead, it sets a spending ceiling that the Budget Committee and the Appropriations Committee in both the House and the Senate can use as a guide when they develop future federal budget and appropriations measures. In a federal budget that is nearing $3 trillion, the allocations for this bill are not excessive. Republicans and Democrats voted for this bill because they understand that you cannot put a price on justice.

During a “a press conference with Simeon Wright, a cousin of Till” yesterday, Dodd noted that “we honor Emmett Till and all those who sacrificed their lives advancing civil rights. It is disgraceful that it has taken us so long to take this basic step to pursue justice too long delayed. It is incredible that some continue to obstruct these efforts.”

Coburn, unfortunately, stands unashamed.

UPDATE: The press conference for the Emmett Till Bill:

Senator John McCain has been offering opposing policies to different audiences.

In its last report on the candidates’ tax plans, the Tax Policy Center had focused on a series of private assurance from the campaign. Today, the Tax Policy Center surveyed what McCain tells the public. It was not pretty.

On a series of tax proposals, from eliminating the Alternative Minimum Tax to allowing the full expensing of all business, McCain has promised more expansive and expensive versions to crowds and on his website, while his advisers reassure tax and budget experts with relatively cheaper, phased-in proposals.

Now, the Tax Policy Center has put a price tag on the gap between McCain’s rhetoric on the trail and his adviser’s private e-mails: $2.8 trillion.

Earlier this year, the Tax Policy Center did an analysis based on private correspondences with the McCain campaign staff and advisers. But in a revision of their analysis they found that if they did an analysis based only on public statements and publicly available text on their website, his tax plan would cost an additional $2.8 trillion over ten years. That’s over “two-thirds more than the plan described by McCain’s campaign staff.”

Read the full analysis here.

McCain’s public plan is even more skewed towards the rich than his adviser’s plan is, with the richest .1% of Americans earning “twice the tax cut that they would get under the more modest plan outlined by Senator McCain’s economic advisers.”

In addition, the Tax Policy Center points out that the public version of McCain’s plan “would add enormously to the public debt,” making his public plan to balance the budget require “a radical and unprecedented downsizing of government.”

Our guest blogger is Reuven S. Avi-Yonah, the Irwin I. Cohn Professor of Law at University of Michigan Law School.

For a while, Senator John McCain has been advocating letting corporations expense (currently deduct) the cost of purchasing business equipment. This is touted as a way of helping the economy, despite the lack of any evidence that it would do so.

Sen. McCain’s original proposal involved open ended expensing with no limitations. As I pointed out in an earlier paper, this proposal would not only “bust the budget” because of its direct cost, but it would also open the door to an immense increase in tax sheltering.

That is because corporations could borrow funds and use these funds to buy business equipment. The whole amount of the investment would be immediately deductible, as would the interest on the loan. The deductions would be larger than the size of the investment, generating extra deductions that could shield other income from taxes. Tax lawyers call this a “negative tax rate” and it is similar to the shelters that proliferated before the 1986 Tax Reform Act.

Sen. McCain has recently revised his proposal in the face of such criticism. He now proposes to limit expensing to equipment purchased between 2009 and 2013 and to limit the deduction of interest on loans incurred to purchase such equipment.

Ending the tax break in 2013 severely undercuts the proposal. If it is such a good idea, why let it expire? And since Sen. McCain claims that letting the Bush tax cuts expire to plug the looming budget deficit is a “tax increase,” can we expect him to apply a different standard to his own tax cuts and let them expire?

More importantly, the revised proposal is still open to massive tax sheltering. Limitations on interest deductibility have proven unworkable because money is fungible. If interest on loans incurred to finance business equipment purchases cannot be deducted, corporations would borrow to fund other expenditures and use the money freed up that way to buy the equipment.
Read more

Our guest blogger is Adam Jentleson, the Communications and Outreach Director for the Hyde Park Project at the Center for American Progress Action Fund.

McCain has a new ad up that claims offshore drilling will lower the price of gas. Referring to McCain, it says, “One man knows we must now drill more in America and rescue our family budgets.”

In response to the ad, Progressive Accountability highlights the 28 lobbyists (plus one) to whom McCain has outsourced his energy policy.

Watch it:

McCain himself has said that offshore drilling would not provide “immediate relief,” and that the benefits to American families struggling to pay for gas would be “psychological“:

I don’t see an immediate relief, but I do see that exploitation of existing reserves that may exist — and in view of many experts that do exist off our coasts — is also a way that we need to provide relief. Even though it may take some years, the fact that we are exploiting those reserves would have a psychological impact that I think is beneficial.

McCain’s chief policy advisor, Douglas Holtz-Eakin, has also said that offshore drilling would have “no immediate effect” on gas prices.

And the government’s official source for energy statistics, the Energy Information Administration, says that new offshore drilling will not have a significant impact on gas prices — not even in twenty years.

So what is the basis for McCain’s claim that offshore drilling will lower gas prices? Short of some new information substantiating that claim, this new ad is tremendously misleading. The only “family budgets” helped by McCain’s plan are those of the superwealthy Big Oil CEOs whose lobbyists are running his campaign.

It seems McCain’s economic concerns extend only as far as Wall Street. Today in the Politico, Douglas Holtz-Eakin, McCain’s senior policy adviser, admitted that “in McCain’s world…the Main Street guys are hanging in there“:

In McCain’s world, Holtz-Eakin said it seems ‘the Main Street guys are hanging in there. The Wall Street guys are in a world of hurt…The concern is how to keep the travails in the financial sector from spilling over and hurting Main Street,’ he concluded.

This is what the McCain campaign must consider “hanging in there.” Since 2000:

–The average family income is down $962, after inflation

–The cost of an average family health plan is up almost $6,000, from $6,300 to $12,100 a year

–Higher gas prices cost families $1000 more a year. The price of a gallon of gas has gone from $1.50 to an all-time high of $4.10.

The American economy has lost 438,000 jobs so far this year alone. Today, there are 1.6 million people who have been unemployed for six months or longer.

Maybe his concern for “the Wall Street Guys” explains McCain’s $175 billion tax cut for corporations in which 59% of the benefits flow to the richest 1% of Americans and $44 billion goes directly to the Fortune 200. After all, they’re in “a world of hurt.”

Today, John McCain delivered a speech focusing on education to the NAACP:

After decades of hearing the same big promises from the public education establishment, and seeing the same poor results, it is surely time to shake off old ways and to demand new reforms. That isn’t just my opinion; it is the conviction of parents in poor neighborhoods across this nation who want better lives for their children.

McCain isn’t wrong, our education system needs serious changes. But the draconian spending cuts needed to pay for his Bush-style tax cuts for corporations and the wealthy, along with his past voting record, suggest that his “new reforms” aren’t what America’s parents and students are looking for. For low-income black students, the results could be disastrous.

Here’s a run-down:

–Cut Funding To Head Start: Nearly 280,000 African American children are enrolled in Head Start programs that have been shown to improve school performance in early grades and return up to $7 to society for every $1 invested. Sen. McCain consistently voted against funding for Head Start programs and has no plan for expanding access to Pre-K or early childhood education. His plan for a government spending freeze would allow inflation to cut funding for Head Start by over $968 million. Furthermore, the massive deficits his tax plan would rack up could increase pressure for across-the-board cuts that would slash Head Start’s budget by an additional $1.6 billion, and drop over 170,000 children from the rolls.

–Slash College Aid: Approximately 45 percent of African Americans who attend four-year colleges rely on Pell Grants to pay for school (compared to around 16 percent of whites). But Sen. McCain voted with the Bush Administration to cut the value of Pell Grants, and has consistently voted against expanding access or increasing their value. Furthermore, his plan for a discretionary spending freeze
would cut $1.7 billion from community learning centers, and $3.7 billion from career and technical education grants.

–Dodge Fully Funding No Child Left Behind: McCain’s campaign has been evasive on whether or not they would fully fund No Child Left Behind in order to increase resources and accountability in failing schools. Lisa Graham Keegan, his education advisor, has said that McCain believes “NCLB is adequately funded,” while other advisers like Douglas Holtz-Eakin and Carly Fiorina insist that McCain intends to “fully fund” the program. Here’s what we do know: McCain voted against fully funding No Child Left Behind in the past, and his plan for a discretionary spending freeze would allow inflation to erode even the current inadequate funding levels.

More on McCain’s education record here.

UPDATE: The Washington Independent catches McCain telling an audience member in Cincinnati that he would “be glad to fully fund” Head Start programs, despite the fact that his proposed funding freeze would effectively cut $968 million from these programs.

Our guest bloggers are Robert Gordon and James Kvaal, senior fellows at the Center for American Progress Action Fund.

John McCain’s balanced budget plan relies on steep cuts to U.S. spending in Iraq, according to a memorandum written by economic policy advisor Douglas Holtz-Eakin and published in the Washington Post today. The plan calls for $150 billion in savings in 2013, which is only possible with the kind of timed mass withdrawal from Iraq he has criticized.

Here is what the plan says:

“Balance the budget requires slowing outlay growth to 2.4 percent. The roughly $470 billion dollars (by 2013) in slower spending growth come from reduced deployments abroad ($150 billion; consistent with success in Iraq/Afghanistan that permits deployments to be cut by half — hopefully more) …”

Whatever McCain says about cutting deployments in half, achieving $150 billion in savings would require a massive withdrawal of American troops from Iraq and Afghanistan.

First, U.S. spending in Iraq and Afghanistan totaled $171 billion in 2007, according to the Congressional Budget Office – and that includes money for Iraqi security forces, foreign aid, and veterans benefits. If current policies continue – and spending grows with inflation – the war might cost $200 billion in 2013. Cutting the cost by three-quarters, especially when other costs (like veterans benefits and foreign aid) will remain, would require a sharp, perhaps nearly complete withdrawal of troops.

The numbers from CBO look even worse. According to CBO, rapidly reducing the number of troops in Iraq and Afghanistan to 30,000 would save only $55 billion in 2013. So CBO is saying that a much bigger troop reduction than McCain wants would save barely a third as much money as McCain claims.

Finally, Obama’s own, more aggressive plan to withdraw forces from Iraq will save only $90 billion a year, according to his campaign.

McCain has previously said that an Iraq withdrawal timetable would mean “disaster” and “chaos, genocide.” But his own budget documents contain a plan not merely for withdrawal, but for mass withdrawal.

Today at the National Council on La Raza, John McCain is giving a speech outlining his plan for addressing the education challenges Hispanics face in the United States:

Today, studies show that half of Hispanics entering high school do not graduate with their class…We need to shake up failed school bureaucracies with competition; hold schools accountable for results; strengthen math, science, technology and engineering curriculums; empower parents with choice; remove barriers to qualified instructors, attract and reward superior teachers, and have a fair but sure process to weed out incompetents.

The problem is not with his words. But a look at John McCain’s record and policy proposals — including draconian spending cuts needed to pay for his corporate tax cuts — have disturbing implications for Hispanic students (and, really, every student). Here are some highlights from a new report from the Center for American Progress Action Fund:

–McCain Would Imperil Education Funding: McCain’s massive budget hole would require deep cuts in education funding, as much as a forty percent reduction in non-defense spending. And McCain’s record shows he is willing to let education priorities fall by the wayside: he has consistently voted against resources for higher teacher quality, Hispanic drop-out prevention, and after-school programs that improve student performance. He has also consistently undermined effective efforts at accountability by refusing to fully fund the No Child Left Behind Act.

–McCain Would Slash Head Start Programs: McCain has promised a discretionary spending freeze that would slash cut funding for Head Start by over $968 million. And the massive deficits his tax plan would rack up could increase pressure for across-the-board cuts that would slash Head Start’s budget by an additional $1.6 billion, and drop over 170,000 children from the rolls. Hispanic students make up 34% of all kids enrolled in Head Start, and the programs have been shown to dramatically reduce the gaps in test scores between Latino students and non-Hispanic Whites.

Read more

Our guest blogger is Jared Bernstein, the Director of the Living Standards program at the Economic Policy Institute and author of the book “Crunch: Why Do I Feel So Squeezed?“

John McCain spent the day doing something you’d rather not do when you’re running for president in the midst of an economic downturn: trying hard to distance himself from his top economic advisor, former Texas Senator Phil Gramm.

McCain had no choice. In one of a series of deeply dissonant gaffes from the McCain squad this week, Gramm argued that the only recession out there was in people’s heads (“this is a mental recession”) and that everyone should just stop whining. We’ve lost jobs for six months in a row (down over 400,000), paychecks are getting whacked by rising unemployment and soaring gas prices, the federal government is contemplating a takeover of Fannie and Freddie, as financial markets carve out new lows everyday, and this guy — not just any guy, but the top economist for the Republican candidate for president — tells us it’s all in our heads.

The thing is, I find all of this quite reassuring. I know Phil Gramm is a huge economic danger zone, so when he reveals his true colors to the point where McCain has to disavow him, it’s a good day. What scares me is when he’s quiet. It’s in the dead of night, under the cover of deregulatory darkness, where Gramm has successfully struck his most damaging blows.

Driven by that lethal combination of ideological market fundamentalism, or, if you prefer, YOYO economics (“you’re on your own), and the desire to help rich friends in the banking industry, Gramm crafted legislation that helped get us where we are today. Most notably, in 1999, he sponsored the Gramm-Leach-Bliley Act, which essentially took down the regulatory walls between commercial and non-commercial lenders (the latter being investment banks like Bear Stearns or mortgage brokers like Countrywide, to pull a few names out of the air). Read more