McCain Adviser Holtz-Eakin On Deficits: ‘You Have To Pay For That Somehow Or You’re George Bush III’»

In an appearance on CNN’s Late Edition this weekend, Sen. John McCain’s (R-AZ) top economic adviser Douglas Holtz-Eakin dug into Sen. Barack Obama’s (D-IL) spending plan, claiming it would expand deficits:

Senator Obama’s plan is Washington in action. It’s $2 trillion more spending by the federal government. You have to pay for that somehow or you are George Bush III.

Watch it:

Earth to Holtz-Eakin: McCain’s proposed Bush-style tax cuts for corporations and the super-rich are far more fiscally reckless than anything proposed by either Democratic candidate. McCain’s plan would effectively double Bush’s tax cuts and create the largest deficits in 25 years and the largest debt since World War 2. As the New York Times wrote:

Fiscal monitors…estimate that, even taking into account that there are some differences between the proposals by Senators Hillary Rodham Clinton and Barack Obama, the impact of either on the deficit would be less than one-third that of the McCain plan.

Holtz-Eakin would have a leg to stand on if McCain had given any credible explanation of which programs he’d slash to balance his budget.

But he hasn’t.

The FactChecker at the Washington Post gave McCain’s plan to pay for his doubling of the Bush tax cuts by eliminating $100 billion in earmarks “Four Pinocchios” (the highest rating for deceit), calling it “largely fantasy” and “voodoo economics.”

So, in this case, we agree with Holtz-Eakin. Senator McCain, “you have to pay for that somehow or you are George Bush III.”

McCain Campaign Attacks Wonk Room, But Offers No ‘Alternative Figures’ On Deficit Projections»

Late last week, the Wonk Room reported a new analysis by the Center for American Progress Action Fund finding that John McCain would recklessly exacerbate the fiscal irresponsibility of the Bush Administration and create the largest deficit in 25 years.

When contacted by Slate magazine for a response to our deficit analysis, the McCain campaign offered this:

Spokesman Brian Rogers dismissed the CAP study as coming from “a left-wing Democratic front group” but did not provide alternative figures. “The fact that they falsely criticize Sen. McCain’s policy proposals is unfortunate, but it’s hardly surprising,” he wrote in an e-mail.

Well, needless to say, we don’t believe our analysis is false, and we are very open to a debate on its merits. Note that you can read our methodology in detail on page 3 of the report.

Unfortunately, despite supposed outreach to the lefty blogosphere and promises to run a different kind of campaign, the McCain camp seems more interested in attacking us than engaging in a substantive debate on our methodology or our conclusions.

We’ve contacted the McCain campaign for further comment on where they think our analysis went wrong, and we’ve been told that they’d “be in touch if they have a different comment” for us. We look forward to it.

McCain’s 2013 Economy: $780 Billion Deficit»

McCain’s “magic carpet ride” speech yesterday asked us to consider America in 2013 in the fourth year of a John McCain presidency.

We did. Here’s what we found:

In 2013, after McCain’s four years of Bush-style fiscal irresponsibility, tax breaks for corporations, and more tax cuts for the wealthy, America would have a $780 billion deficit (4.3% of GDP) and national debt of $8.5 trillion (47% of GDP). That’s over $1.5 trillion more debt than would be accumulated under a continuation of current Bush policies.

John McCain’s 2013: More of the same, but worse.

McCain’s Budget Would Create Largest Deficit In 25 Years, Largest Debt Since WWII»

Sen. John McCain promises that, as president, he would “cut taxes and balance the budget.” But his current economic plan 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 — and would accumulate the biggest debt since the second World War, according to a new analysis by the Center for American Progress Action Fund. McCain’s current fiscal plan would recklessly exacerbate the fiscal irresponsibility of the Bush Administration further by gutting revenues far below the average level of the past 25 years.

For the past 25 years, deficits have never been more severe than 5% of GDP, with surpluses as high as 2.4% of GDP in the year 2000. Under McCain, yearly deficits would increase sharply, beginning with $505 billion in FY2009 (3.4% of GDP) and skyrocket to $1.2 trillion (5.7% of GDP) by FY2017. In 2018 these deficits would reach 6% of GDP, tied with the largest deficits since WW2 in 1983. Current Bush policies would keep the deficit in 2017 to $660 billion (3.1% of GDP).

According to the study, McCain’s economic plan, (which includes a corporate tax cut, a full repeal of the AMT, and an extension of the Bush tax cuts) would leave a debt of $12.7 trillion (the highest since 1951 when America was still holding debt from WW2) by the last budget of a two term presidency starting in 2009 (FY2017). This debt is $3.5 trillion more severe than the one resulting from an extension of current Bush policy, which would leave a debt of $9.2 trillion (43% of projected GDP).

McCain would slash government revenues, which have averaged 18.3% of GDP for the past 25 years, to their lowest levels since before 1962. Revenues would average only 16.3 percent of GDP for the duration of his two terms. Under current Bush policy, revenues would remain above 18 percent of GDP.

This analysis currently incorporates the most generous possible savings McCain has offered thus far: an $18 billion cut of wasteful earmarks and a $15 billion “freeze” in wasteful spending, with the savings grown at the rate of GDP growth over his presidency. These “savings,” which come no where near paying for his reckless tax cuts, already include “heavy cuts in after-school pro­grams, student aid, public broadcasting, and job training.” To fill the gaping remaining hole, McCain supporters have suggested policies that would lead to “massive cuts” in Social Security.

Read the full report.