The McCain Dilemma: Raise Taxes Or Add To The Deficit

Today, during an appearance on Fox Business Channel, McCain adviser Nancy Pfotenhauer disingenuously argued that the senator’s health care plan would cover “30 million” uninsured Americans and would be “budget neutral over 10” years:

HOST: So Nancy, who foots the bill?

PFOTENHAUER: Well, our plan is budget neutral over 10 years… we insure 30 million, approximately, and we’re budget neutral over 10.

Watch it:

While most reports estimate that McCain’s plan would only cover an additional 5 to 7 million Americans, Pfotenhauer’s claim that the proposal would be “budget neutral” disguises large tax increases or huge budget deficits.

The McCain campaign estimates that its health care proposal would cost $3.6 trillion over ten years and promises to pay for it by exposing health benefits to income taxes.

But as the Tax Policy Center argues, income taxes alone fall $1.3 trillion short of paying for McCain’s health plan. At this point, the senator will have a choice: finance the proposal by exposing the health benefits to payroll taxes, thus forcing millions of American families to “foot the bill”, or add $1.3 trillion to the national deficit.

But, having promised to balance the budget by 2013 and not raise taxes, McCain is stuck in the impossible.