Today, during an interview with Neil Cavuto, Sen. John McCain’s (R-AZ) economic adviser Nancy Pfotenhauer claimed that McCain will balance the budget “by the end of the first term,” and that she’s “not even sure real cuts would ever be required.” Watch it:

A Center for American Progress Action Fund analysis calculated that McCain’s plan, complete with its doubling of Bush’s tax cuts for corporations and the wealthy, will create a budget deficit of $505 billion in 2009. McCain has claimed that he will balance the budget by eliminating earmarks and cutting $160 billion in discretionary spending.

However, “eliminating every congressional earmark in the federal budget would save an estimated $18 billion a year,” or about 4% of the federal deficit, and McCain can’t explain where the rest of his cuts would come from. George Stephanopolous pointed out that in order to cut the $160 billion he cites, McCain “would have to cut 30% from every single program, including education and veterans benefits.”

As the Wonk Room has noted, McCain could cut ten cabinet agencies and still not balance the budget, and his own estimates require a 30% cut in every federal program. Thus, its hard to imagine how he could balance the budget with no “real cuts” at all.

Today in Michigan, Sen. John McCain (R-AZ) said:

It’s great to be here today with the assembly workers of this GM plant. I’m here to send a message to Washington and Wall Street: We are not going to leave the workers here in Michigan hung out to dry while we give billions in taxpayer dollars to Wall Street.

Wrong.

John McCain’s Bush-style corporate tax cuts would give $6.3 billion every year to America’s largest banks and financial institutions, $45 billion to the Fortune 200, and almost nothing to over 100 million American families.

As for workers in Michigan, John McCain’s health care plan would raise taxes by $1,100 by 2013 for an average Michigan couple making $60,000.

In other words, McCain’s message to Washington and Wall Street is…more of the same.

Last night, “in an unprecedented move,” the Federal Reserve announced that it would lend troubled insurance giant AIG $85 billion. In return, “the federal government will receive a 79.9% stake in the company.”

This comes just ten days after the federal government, in “one of the most sweeping government interventions in private financial markets in decades,” placed mortgage companies Fannie Mae and Freddie Mac under “conservatorship,” and six months after the federal bailout of investment bank Bear Stearns.

At the helm of the Bush administration’s response to the chaos on Wall St. is Treasury Secretary Henry Paulson. For months, Paulson has repeatedly given assurances that the American banking system is just fine. Two days ago, in fact, he declared that “our banking system is safe and sound”:

- “I’ve got to say our banking system is a safe and a sound one…The American people can remain very, very confident about their accounts and our banking system.” [The Hill, 9/15/08]

- “The American people can remain confident in the soundness and the resilience of our financial system.” [CNN Money, 9/15/08]

- “Let me say, our banking system is a safe and a sound one.” [CNN's Late Edition, 7/20/08]

- “We have a safe and sound banking system in the United States of America.” [CBS's Face the Nation, 7/20/08]

- “Our economy, like any other, has its ups and downs. It’s structurally sound. The long-term fundamentals are healthy. The risks are to the downside right now, but the long-term fundamentals are healthy.” [San Fransisco Chronicle, 3/8/08]

- Paulson said “The US banking system is well-capitalized and ‘we have a strong deposit insurance system that provides good coverage for the savings of hard-working Americans.’” [Forbes, 12/7/07]

Now, Paulson is having to work overtime to bailout a banking system that is most certainly not safe and sound.

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