Jared Bernstein of the Economic Policy Institute recently said, “I don’t think anybody’s numbers add up when they run for president. I do fear that (McCain’s) don’t add up the most.”
That’s not exactly the impression the New York Times wants to convey. In a front-page piece yesterday, the NYT analyzed the fiscal plans presented by the three remaining presidential campaigns and found that “each could significantly swell the budget deficit and increase the national debt by trillions of dollars.” Clinton and Obama, the Times said, would make things worse by spending more money. McCain, the Times said, would make things worse by cutting taxes.
The reasons reflect the ideological leanings of the candidates, with Senator John McCain proposing tax cuts that go beyond President Bush’s and the Democrats advocating programs costing hundreds of billions of dollars. But for fiscal experts concerned with the deficit, both approaches are worrisome.
With the national debt soaring to $9.1 trillion from $5.6 trillion at the start of 2001, in part because of the Iraq war and Mr. Bush’s tax cuts, a crucial question about the candidates to succeed him is “whether they are helping to fill the hole or make it deeper,” said Robert L. Bixby, executive director of the Concord Coalition, a nonpartisan organization that advocates deficit reduction. “With the proposals they have on the table, it looks to me like all three would make it deeper.”
This is the kind of pox-on-both-your-houses report that tends to dominate campaign reporting. If the NYT noted that one candidate (the Republican) is objectively and demonstrably worse than his rivals (the Democrats), it would constitute a “bias,” so everyone is tarred with the same brush. McCain, Clinton, and Obama are all playing fast and loose with the numbers, we’re told; they’re all just politicians played the same old slight-of-hand games.
Except that’s not true. There may be some over-promising going on, but there is a difference between the two sides’ approach.
Jonathan Cohn highlights the ways in which McCain is much more irresponsible.
…McCain’s plan could add $5.7 trillion to the national debt over the next decade. Clinton and Obama’s plan would add about a third as much.
Clinton and Obama can probably achieve most of their goals either by trimming (rather than ditching) some proposals, finding a politically acceptable way to raise a few taxes, or letting the deficit grow at a moderate rate. (Or, most likely, some combination of the three.) McCain, by contrast, is going to have to jettison some of his ideas altogether. Either he’ll have to let go of those tax cuts or he’ll have to let the deficit explode.
This is, arguably, a very important distinction — one about which the voters should know, as it says a lot about the candidates’ honesty and ability to govern.
The NYT piece eventually gets to some of these details, but not until after it insisted that all three candidates are effectively the same — in terms of the deficit, they have “one thing in common,” the article insists — in their “worrisome” approaches to fiscal sanity.
On a related note, Paul Krugman takes a closer look at the tax plan McCain has put on the table.
The McCain tax plan contains three main elements. First, Mr. McCain proposes making almost all of the Bush tax cuts, which are currently scheduled to expire at the end of 2010, permanent. (He proposes reinstating the inheritance tax, albeit at a very low rate.)
Second, he wants to eliminate the alternative minimum tax, which was originally created to prevent the wealthy from exploiting tax loopholes, but has begun to hit the upper middle class.
Third, he wants to sharply reduce tax rates on corporate profits.
According to the nonpartisan Tax Policy Center, the overall effect of the McCain tax plan would be to reduce federal revenue by more than $5 trillion over 10 years. That’s a lot of revenue loss — enough to pose big problems for the government’s solvency.
But before I get to that, let’s look at what I found truly revealing: the McCain campaign’s response to the Tax Policy Center’s assessment. The response, written by Douglas Holtz-Eakin, the former head of the Congressional Budget Office, criticizes the center for adopting “unrealistic Congressional budgeting conventions.” What’s that about?
Well, Congress “scores” tax legislation by comparing estimates of the revenue that would be collected if the legislation passed with estimates of the revenue that would be collected under current law. In this case that means comparing the McCain plan with what would happen if the Bush tax cuts expired on schedule.
Mr. Holtz-Eakin wants the McCain plan compared, instead, with “current policy” — which he says means maintaining tax rates at today’s levels.
But here’s the thing: the reason the Bush tax cuts are set to expire is that the Bush administration engaged in a game of deception. It put an expiration date on the tax cuts, which it never intended to honor, as a way to hide those tax cuts’ true cost.
The McCain campaign wants us to accept the success of that deception as a fact of life. Mr. Holtz-Eakin is saying, in effect, “We’re not engaged in any new irresponsibility — we’re just perpetuating the Bush administration’s irresponsibility. That doesn’t count.”
It’s the sort of fiscal double-talk that has been a Bush administration hallmark. In any case, it offers no answer to the principal point raised by the Tax Policy Center analysis, which has nothing to do with scoring: the McCain tax plan would leave the federal government with far too little revenue to cover its expenses, leading to huge budget deficits unless there were deep cuts in spending.
Are the Clinton and Obama plans perfect? No. Can they account for every dime in their fiscal and budget plans? No. When it comes to irresponsible promises, are they in McCain’s league? No.