On MSNBC’s Morning Joe today, host Joe Scarborough pressed Sen. John McCain’s (R-AZ) top economic adviser, Douglas Holtz-Eakin, on McCain’s infamous flip-flop on the Bush tax cuts. Scarborough noted that McCain’s current position is “that we couldn’t afford tax cuts in 2001 because of deficits, but we can afford them now.” “Can we afford to extend George W. Bush’s tax cuts?” he asked.
Holtz-Eakin filibustered, claiming that “McCain has a plan to bring the budget into balance by 2013.” After Scarborough repeated his question five times, Holtz-Eakin finally relented, saying, “Yes.” Scarborough then pointed out the absurdity of McCain’s changing position from 2001 to 2008:
SCARBOROUGH: You’re saying we can afford, just a yes or no, we can afford to extend George W. Bush’s tax cuts?
HOLTZ-EAKIN: Yes.
SCARBOROUGH: Ok. But in 2001, when Sen. McCain voted against George Bush’s tax cuts, he said we couldn’t afford it because it would create a deficit. In 2001, we had a 155 billion dollar surplus. This year, in 2008, when he now supports the tax cuts, as you know, we are moving towards a 300 billion dollar deficit. How can we afford tax cuts in 2008 with 300 billion dollar deficit that John McCain said we couldn’t afford in 2001 when we had 155 billion dollar surplus?
Beyond a blanket promise to “control spending,” Holtz-Eakin could not explain how McCain’s budget could afford the tax cuts. Watch it:
The reason Holtz-Eakin refused to explain how McCain would “balance the budget” while extending and enhancing the Bush tax cuts is simple: He can’t do it.
McCain has claimed that he can pay for his massive tax cuts by either cutting $100 billion a year in earmarks or $100 billion in overall spending. But the Washington Post’s Fact Checker calls this “voodoo economics” worthy of four Pinocchios:
An analysis by the Center for American Progress Action Fund has determined that McCain’s fiscal proposals “would create deficits as deep as 5.7% of GDP by the end of a two term presidency — the highest federal budget deficit in 25 years.”
Transcript:
SCARBOROUGH: This is what he said in 2001, “I cannot in good conscience support a tx cut in which so many of the benefits go to the most fortunate among us, at the expense of middle-class Americans who most need tax relief.” And then of course, a few days ago, we had somebody else from the McCain campaign, Carly Fiorina, repeat what John McCain has said, that we have to have those tax cuts now. That we couldn’t afford tax cuts in 2001 because of deficits, but we can afford them now. Do you think that we can really afford tax cuts in 2008?
HOLTZ-EAKIN: John McCain has a plan to bring the budget into balance by 2013 by doing what he wanted to do back in 2001, which is control spending. Be a little careful with America’s money, I mean we’re spending hand over fist. It — I’m an economist, I can’t even count how much money’s been spent in the past 8 years. So…
SCARBOROUGH: So, can we afford the tax cuts now?
HOLTZ-EAKIN: Ah, look, we’ve got an economy that’s raising about 19 percent of America’s income in federal taxes. Americans don’t need the federal government taking more of their taxes, they need to be able to go out, have a vacation, send the kid to college, take care of the necessities at home.
SCARBOROUGH: Can we afford to extend George W. Bush’s tax cuts?
HOLTZ-EAKIN: We’ve got a tax system right now, the top rate’s 35 percent. We’ve got dividends and capital gains that are 15. We can..
SCARBOROUGH: No no, I’m asking the question, a yes or a no, can we afford to extend…
HOLTZ-EAKIN: Oh yeah.
SCARBOROUGH: …George W. Bush’s tax cuts.
HOLTZ-EAKIN: This is all about how much you spend. When you do this in your life, if you spend the money, you might put it on a credit card, but you’re going to pay some points. So, it’s how much you spend. You know, John McCain’s got a great record of using the taxpayer’s money wisely.
SCARBOROUGH: Ok.
HOLTZ-EAKIN: So that’s what we need to do.
SCARBOROUGH: You’re saying we can afford, just a yes or no, we can afford to extend George W. Bush’s tax cuts?
HOLTZ-EAKIN: Yes.
SCARBOROUGH: Ok. But in 2001, when Sen. McCain voted against George Bush’s tax cuts, he said we couldn’t afford it because it would create a deficit. In 2001, we had a 155 billion dollar surplus. This year, in 2008, when he now supports the tax cuts, as you know, we are moving towards a 300 billion dollar deficit. How can we afford tax cuts in 2008 with 300 billion dollar deficit that John McCain said we couldn’t afford in 2001 when we had 155 billion dollar surplus?
HOLTZ-EAKIN: It look — the guy’s a pretty good forecaster, right? He ran in 2000 on a tax cut that put the middle class first in line, protected Social Security and had strict spending controls. What did we see? Social Security wasn’t protected, no control on spending, so, you know, let’s do it right the next time. He’s committed to taking care of important problems and that means having the economy grow, letting people have a job and bringing the budget to balance.
SCARBOROUGH: But again, you can understand why it’d be confusing to Americans that John McCain said we can’t afford tax cuts in 2001 because of the deficit and then the deficit’s about 400 billion dollars worse eight years later, and he says, well forget what I said in 2001, now we can support it.
HOLTZ-EAKIN: Oh no, I think that if they had just given him the controls in 2001, we’d be fine. But the American people didn’t. Now they have a chance to give it to a man who will fufill his pledges to the American people, will take care of their business and will, you know, keep the economy going and have a balanced budget at the end of it.
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