McCain Campaign Conference Call, 6/16/08


JUNE 16, 2008

Listen to the audio of the call here.


ROGERS: Good afternoon, everyone. Thanks for joining us, this conference call of the McCain campaign, to discuss Senator Obama’s remarks in Flint, Michigan today. With us on the call, we have Victory 2008 chair Carly Fiorina and McCain senior adviser Doug Holtz-Eakin. I’ll just kick it over to Carly Fiorina for some opening comments, and then, after she and Doug speak, we’ll be happy to take your questions. Carly?

FIORINA: Great. Thanks so much, and good afternoon, everyone. Thank you so much for joining us. I think this speech today is, once again, an example of the the contrast between Barack Obama’s rhetoric and the reality of his record.

Let’s just start with the most obvious statement of all, “Competitiveness requires competing. And competing means that we must be a nation that engages fully in free trade.” Many have called Barack Obama the most protectionist candidate that the Democratic Party has ever fielded. And indeed his record supports that charge.

He has said, on numerous occasions, that we should unilaterally renegotiate the NAFTA free trade agreement. He voted against free trade agreements with our friends and allies like Colombia and South Korea.

It’s fairly clear, I think, from the reality of his record, if you set aside his rhetoric, that Barack Obama does not believe that Americans can compete with anyone in the world. Just to give a few facts about trade, American workers make and sell about $200 billion of just heavy machinery, alone, to countries every year.

Our companies export more than $70 billion worth of aircraft and parts, more than $148 billion worth of electrical machinery and equipment. In other words, in all, one out of every five American jobs depends on factory exports. That is true in Barack Obama’s home state of Illinois and it is true throughout the United States.

And the answer to our competitiveness agenda is not to increase the size of USTR. No one has ever said that the size of USTR is a problem. The answer is to compete fully, which is very different from the position that Barack Obama has taken in his calls for renegotiation of NAFTA, or in his protectionist policies of voting against free trade with nations like Colombia and South Korea.

Secondly, I think it’s fair to say that, throughout this speech, Barack Obama proposes a variety of big government solutions. He seems to think that government bureaucrats in Washington can do better than families in making their own choices about education or health care, or that big government bureaucrats can do better than American businesses or entrepreneurs or factory workers.

FIORINA: There are stark differences between the reality of Barack Obama’s record and the reality of John McCain’s record, starting, first and foremost, with a established record of bipartisanship activity on John McCain’s part and no record of bipartisanship on Barack Obama’s part.

John McCain believes that America can compete with anyone in the world. Our education system has to be the finest in the world, and that means both K-12 programs and worker retraining programs, which John McCain has been calling for for over a year, that prepare our children and our workers for the rigors of the 21st century.

We must have world-class infrastructure, we must achieve energy independence, a subject that John McCain will speak on tomorrow. But we will achieve these goals not through a massive build-up of Washington bureaucracies, but by unlocking and unleashing the creativity, ingenuity and determination of the American people.

Government has a role to play. Government can invest in building capabilities and can motivate others to invest, as well, through the proper application of incentives. But government shouldn’t tell parents how to educate their children or spend the taxpayers’ money on programs that American business can achieve more efficiently and effectively.

And first and foremost, competitiveness requires competing, and that’s what John McCain believes the American worker can do. And I’ll turn it over now to Doug Holtz-Eakin.

HOLTZ-EAKIN: Thank you for taking the time to be with us today. I think it’s important to distinguish between the words in a speech and the track record on another area, and that’s in tax policy. Tax policy has gotten a lot of attention in recent days, but I think it’s important to look at even the sources he cites, the Tax Policy Center, and look and there and you will see some very simple truths.

Truth number one, one candidate cuts taxes. One candidate has lower taxes in the future than we have today, and that candidate is John McCain. The Tax Policy Center says that those tax cuts help all Americans across the board, from the lowest- to the highest-paid Americans.

Another candidate raises taxes; that candidate is Barack Obama. And those tax increases damage the very fabric of the job creation machine, the small businesses of America, and the authority on that is Barack Obama himself, who has said he would defer his tax increases if the economy is weak, a frank admission that this is a damaging impact on our job creation, the most important thing that we need right now.

A second problem with the Barack Obama tax policy is it doesn’t add up. The numbers simply can’t all be true. He’s promised to raise taxes. At the same time, he’s promised to cut taxes on 95 percent of Americans. And, as we heard today, he’s got an agenda that includes trillions of dollars in new spending over the next five years.

All of those cannot be true at the same time and it is up to Mr. Obama to reconcile those numbers for the American public instead of promising things in different places at different times. If you look at the tax policy itself, there’s a huge difference between what he says and what any seasoned practitioner would believe to be true.

Take his stance on capital gains. In the beta version of Obama on capital gains, he simply said it was going to go higher but wouldn’t say how high. In version one, it was going to be 25 percent capital gains tax rates, an obvious impact on small businesses in America.

In version two, he quickly dialed that capital gains tax rate to zero percent for, quote, “start-ups.” Now ask yourself, who is a “start-up” and who gets the ideal percent capital gains? This is a full employment act for tax lawyers. So we’ll have G.M., which was once a start-up, eligible for a zero percent capital gains. Over how many years will you get zero percent capital gains?

HOLTZ-EAKIN: If you spin off a division from an existing company, is that a start-up? These are the sorts of simple promises that are simply at odds with actual practices of good tax policy in the United States.

Another place where I’d like to echo back to what Carly said is in trade. Seasoned trade specialists, who understand the importance of this to the United States, know that international trade negotiations are the international equivalent of bipartisan work in the Senate — it requires constant engagement — and that free trade agreements, far from being one-time events, are steps along the path to better trade relations between nations.

And to simply say, no, I won’t do this; I will wait and have the perfect smart trade agreement is to naively believe there’s another deal waiting out there, when, in fact, the rest of the world will continue moving on trade, and the United States will simply be left behind.

This is a fabulous collection of words, but the substance underneath is questionable in its economic content and hard to decipher without a little more explanation. Do you want to open it up for questions?

ROGERS: Absolutely. Moderator, do you want to open it up?

QUESTION: A question for Ms. Fiorina: Ma’am, you said that no one is calling for an increase in the size of USTR. If I’m not mistaken, Senator Graham, who’s one of Senator McCain’s biggest supporters, has called for the addition of a trade prosecutor within USTR.

I wonder if Senator McCain believes that would also believe a good move, or whether he thinks that there has been enough enforcement action, in terms of cracking down on violators of trade agreements with the United States?

FIORINA: I’m not personally aware of Graham’s statement on that specific, but I will say that Senator McCain has said, on many occasions, that he will prosecute our agreements with other nations, that he will ensure that those agreements are followed and that, where our trading partners are not adhering to the standards that they signed up for — for example, WTO standards — that we should prosecute those trading partners.

FIORINA: And he has given examples of China on specific occasions.

I believe what Senator Obama is calling for is something quite different, which is, he claims that one of the problems with our free and fair trade agreements as that the USTR bureaucracy is simply not up to the challenge.

And I’m aware of no one who believes that it’s a lack of personnel that’s causing issues with free and fair trade. In fact, to be very accurate, Barack Obama’s comments about the unilateral renegotiation of NAFTA, his votes against the free trade agreements with Colombia and South have caused more trouble in the current time period with our trading allies than anything else.

QUESTION: On energy, last week Senator McCain was highly critical of oil company profits. And, you know, I want to know, what is an acceptable level that he sees for their profits?

If he’s not supporting a windfall profits tax, you know, what does he think, as president, he can do to — or should do to reign those profits in and ensure lower gas prices?

HOLTZ-EAKIN: This is Doug Holtz-Eakin. There are probably two important things to recognize in this regard. The first is that Senator McCain has a very strong record of having actions to back his words.

And, in particular, he opposed the 2005 Energy Act supported by Senator Obama, signed by President Bush, that had more tax breaks for oil companies at a time when their profits are simply extraordinary.

And I think these are the kinds of profits that got his attention. Why are we having additional government help at a time when they’re already making lots of money?

He proposes as part of his tax policies to treat oil companies like other businesses, give them standard cost recovery under good tax principles, but no more, and repeal all the hand-outs they’ve received over the past.

The second concern is that executives in America seem, at times, to not recognize that they have a responsibility to their shareholders and that their shareholders might perhaps have some say on the pay they receive and the way that oil company profits have influenced their compensation.

In this regard, he’s simply asking that corporate America hold themselves to the same standard he holds Congress, which is to be transparent and accountable to your constituency through your kind of behaviors that you undertake.

QUESTION: Yes, I had a question about Barack Obama announcing today that he’s going to go to Iraq and Afghanistan.

Do you think, A, that that is in response to your campaign demanding that he do so? And, B, are you satisfied now that he’s going to go ahead and make this visit?

FIORINA: Well, I think, first, it’s a very good thing that Barack Obama has decided that he will visit the reality on the ground in Iraq and Afghanistan.

And, hopefully, he will be moved by the facts on the ground. He will have to acknowledge that the surge is working. And perhaps that will cause him to change his position, which so far has been, the surge has failed; we are losing, and we need to withdraw precipitously.

John McCain has visited Iraq eight times. He understands fully the facts on the ground. It is why he proposed the surge, against the policies, at the time, of both President Bush and Secretary of Defense Rumsfeld.

He is delighted that surge was implemented. He is gratified that it is working. And he believes that to withdraw precipitously will create a more dangerous situation for America in the region, and that we will have to return to Iraq.

So I think it is terrific that Senator Obama will be confronted by the reality on the ground. And we’ll see how his position changes after that visit.

QUESTION: But do you see this as him acquiescing to Senator McCain’s demand?

FIORINA: You’ll have to ask Barack Obama what his motivation for the visit is. I just think it’s good for the American people that he see the reality.

HOLTZ-EAKIN: This is Doug. One would hope he would take as a standard finding out the facts on the ground before deciding things. One of his sharp criticisms, in today’s speech, and in the past, has been that John McCain would have a lower corporate tax rate and not drive jobs to Ireland and low-tax places on the globe.

He should check the facts on the ground that led his own adviser, Jason Furman; that led Charlie Rangel, the chief Democratic tax writer in the House, and Governor Deval Patrick to all support a lower corporation tax rate.

Making decisions on the basis of facts is a hallmark of John McCain. One would hope that Senator Obama would adopt that standard.

QUESTION: In Obama’s speech, there’s a lot, here, on education. And he says, at one point, that we don’t know a lot about what John McCain wants to do on education.

And that’s true. We don’t know a lot about what John McCain wants to do. For example, he’s talking about paying for — if you commit your life to teaching, American will pay for your college education.

QUESTION: He’s got a big $10 billion pre-school education plan.

What is McCain proposing?

FIORINA: Well, let’s just take a couple of specifics that McCain is public on. And having been to many, many town hall meetings with John McCain, I can tell you he talks about education all the time.

But, for example, on the proposal that John McCain has made for veterans benefits, he absolutely believes and quotes often that the G.I. Bill transformed the face of America by providing G.I.s returning from World War II with an education. He would propose the same transformative effect on America today.

But he also would propose, unlike Barack Obama, that those education benefits are transferable from the veteran to their family, which is an item of great concern. It is one of the reasons, I think, why the Defense Department supports John McCain’s plan in this regard.

Secondly, John McCain has said that No Child Left Behind is imperfect, without a doubt. But he also says that we probably shouldn’t just start over after seven years of that; we should reform No Child Left Behind, we should absolutely fully fund it and we should be able to hold teachers accountable for the performance in the classroom.

And finally, he has said that at the heart of the problem is, what are teachers teaching in classrooms? He has said we must encourage and motivate and incent people to become teachers, we must reward good teachers, and we must accelerate out of the classroom teachers who are no longer teaching at an adequate level the children in their classrooms.

QUESTION: So is there a specific — any specifics on encouraging people to go into teaching? I mean, any — is there any more than that, that — than just a policy statement?

HOLTZ-EAKIN: This is Doug Holtz-Eakin.

The senator will speak more about education in the weeks and months to come. It is safe to say that he’s fully supportive of the notion that we ought to fully fund No Child Left Behind.

He does believe that Title 1 money was intended to educate the less affluent children of America and that it ought to go to them and their parents, either for supplemental skills, where it’s needed, or, if need be, to move to a new school and get a better education, that the Title 2 money should (inaudible) teachers who need help and not be channeled through bureaucracies that are unresponsive.

And he’s going to lay out a lot of detail on these things so that we can have a culture of success in education that is simply absent today and a culture that is oriented not on the schools or even the parents, but on the children succeeding through mechanisms that involve federal assistance.

FIORINA: And I guess the last thing that I would say is, in this regard, I think Barack Obama and Senator McCain have fundamentally different philosophies.

FIORINA: John McCain has said, on many, many occasions, that he believes we must provide parents with the power of choice as to how their children are educated, and we must invoke the discipline of competition.

And that means, for example, that parents should have the choice. Do they want to put their children in charter schools, in private schools, in public schools? Do they want to engage in home-schooling?

There are many, many examples, New Orleans being one of them, where, when you give choice to parents and families, the level of education rises.

And, indeed, if you look at the track record, as you may know, John McCain visited New Orleans. He was impressed by the impact of charter schools in New Orleans, on the level of education for that city in general, and impressed, as well, that that culture of success, to use Doug’s terms, really had raised a new standard for what parents and children were prepared to accept in their education, going forward, a new higher standard.

QUESTION: Hi, Doug, this question’s for you. I’m wondering if you could talk, a little bit more, about lifting the federal moratorium that McCain mentioned today, and why you’re advocating drilling off the coast of these states?

Because aren’t these federal waters? And don’t they belong to all of the American people?

I mean, doesn’t the, kind of, bounds go to about a mile off the coast?

HOLTZ-EAKIN: So the specifics on the moratoria are that there exists legislative moratoria that are passed each year in the appropriations process, and have been around for well over 20 years, prohibiting exploration and drilling in the Atlantic-Pacific OCS.

And then the first President Bush put in place a presidential administrative moratorium. It was extended to 2012 by then-President Clinton.

Senator McCain, today, said that we should remove these bars to exploration and drilling on the Outer Continental Shelf. One could be done by the administration itself. The second would require bipartisan action, with Democrats in the House and the Senate.

And Senator Obama’s active engagement and genuine reaching across the aisle would be helpful in that regard.

And at that point, he believes that the very successful model that was implemented in the Gulf Coast, with the state of Louisiana, is an appropriate standard to proceed.

And, in that model, the state of Louisiana identified areas that seemed both environmentally acceptable and did not impede other objectives. They received, in response, in exchange, some share of the receipts involved in the royalties from the leases. And we got more oil for the American consumer.

That’s a nice constellation of success. And the senator thinks it’s the one we should pursue.

ROGERS: Well, thanks, Doug, and thanks, Carly, and thanks to everybody who got on this afternoon. If you do have any additional questions, call this press office at 703-650-5550.

Thanks, everybody. Have a good day.