Monday editorial: Adopting Bushonomics
The Democratic candidates for president are working hard to convince voters that a John McCain presidency would be the equivalent of a third term for George W. Bush. Mr. McCain is making their job easier.
The Arizona senator and presumptive Republican nominee already shares the president’s views on the need to stay the course in Iraq. Now, as he begins rolling out his domestic proposals, Mr. McCain seems determined to echo the president there as well. Last week, he unveiled his cure for what ails the American economy: more tax cuts!
Not only does he want to extend the tax cuts Mr. Bush and the Republican Congress enacted in 2001 (parts of which he voted against in the Senate), but he also has some new ones all his own. It’s Bushonomics: The Sequel.
Mr. McCain proposes a summer-long suspension of the 18.4 cents per gallon federal gasoline tax. “The effect will be an immediate economic stimulus,” he said. That’s true; it will stimulate people to keep burning gasoline.
Gasoline prices averaged $3.41 in St. Louis on Friday because oil was at a near-record $114.82 per barrel. Mr. McCain’s gas tax holiday would save customers $3.68 on a 20-gallon fill-up. That’s in the short run. In the long run, it wouldn’t help at all.
The surest way to reduce oil prices is to cut demand; as painful as they are, high gasoline prices encourage conservation. That’s how a free market works, and a traditional economic conservative — as Mr. McCain likes to boast he is — would stay out of the way.
A cut in gasoline taxes would take us in the wrong direction — toward more consumption and even higher oil prices. As a result, we would be sending more American dollars to the oil sheiks, Iranian extremists, African dictators and Latin demagogues who sit on the world’s oil supply.
Plus, the federal gasoline tax funds the Highway Trust Fund, which pays for building and repairing highways, roads and bridges. The trust fund already is $2 billion in the red because Congress authorized more road projects than the fund can afford. A summer-long tax holiday would add $8 billion to $10 billion to the shortfall.
Mr. McCain also proposes a grab-bag of other tax cuts: The corporate income tax rate would fall to 25 percent from 35 percent. He would double the exemption for dependents for individual income taxes. People could choose to file under present income tax law rates or under a new “flatter-tax” program with only two tax rates. Guess which one they’d choose.
He’d also phase out the alternative minimum tax, not a bad idea in and of itself, but he says nothing about how he’d replace the lost revenue.
All of this would cut federal revenue at a time when the Office of Management and Budget reports that the budget was $310 billion in deficit for the first half of the fiscal year. That number could go higher if a recession reduces tax collections.
Mr. McCain promises $100 billion in spending cuts to help offset his tax cuts, but he’s fuzzy about how he’d reach that number. He’d veto all congressional earmarks, which would save $18.3 billion. Much of the rest would come from what he describes as “program review and other budget reforms.”
In the meantime, he’d put a one-year freeze on discretionary spending except for defense and veterans’ benefits. Discretionary programs include education, law enforcement, housing, transportation, national parks, environmental protection and cleanup and countless other important and essential government functions and services.
All candidates, Democrats included, talk more about the nice things they would do for voters than how to finance them. But Mr. McCain has undergone a peculiar transformation as his quest for the White House has advanced.
He opposed most of the Bush tax cuts in 2001 and 2003. He said it didn’t make sense to cut taxes during a war, particularly when most of the benefits flowed to the wealthy. He was right then. He’s wrong now.
Oh, gee! Who couldn’t see this coming?
The mission of the Editorial Board between now and the election can be summed up simply:
McCain = Evil
Obama = GREAT!
And it’s only 188 days (Oct. 26th ) before the Post Editorial Board will be endorsing Obama along with Jay Nixon and every other Democrat on any ticket, anywhere in the country.
It has been spending, not revenue, that has been out of control. It should shock no one here that while you whine about how McCain has not detailed spending cuts to your likely (ie the military) you completely ignore his promise to veto any bill containing earmarks.
With the Bush tax cuts while the tax RATES have gone DOWN tax REVENUE has gone UP… doubled actually. This happens every time you cut tax rates.
None of this could in even the vaguest sense be called ‘news’ as the most basic of economic principles have always escaped your understanding. Elsewhere on this site it was announced today just how poorly this newspaper is doing… profit wise. People aren’t reading the Post… so they are not buying it, so others will not advertise in it. At most any other business, this would mean that a change would be on the way… put out a product that people want.
Not at the Post, where year after year they put out only far left dogma… year, after year, after year.