As the campaigns of John McCain and Barack Obama flail away at the details of each other's economic blueprints, independent analysts say neither candidate's plan will balance the federal budget any time soon.
McCain this week contended that by the end of his first term he would erase the budget deficit, projected this year at more than $400 billion.
"The problem with the McCain proposal is that he has an ambitious goal out there with no plausible way of achieving it," said Robert L. Bixby, executive director of the Concord Coalition, a nonpartisan group that advocates "generationally responsible" fiscal policy. McCain, he said, "has proposed an enormous amount of tax cuts and a very vague plan of spending restraints."
Obama, Bixby said, "doesn't have the [balanced budget] goal, so we're not quite sure what the fiscal policy goal is. He's got some very ambitious proposals - healthcare coverage and tax breaks for the middle class and for education and investment. It could all be quite expensive, and I think it's uncertain whether he's made credible provisions to pay for them by raising taxes or cutting other spending."
An analysis of the candidates' tax plans, released last month by the nonpartisan Tax Policy Center, estimated that McCain's program would reduce tax revenues by $3.6 trillion over the next 10 years while Obama's would cost $2.7 trillion over that time. And both would greatly increase the national debt, now more than $9 trillion.
The analysis excludes the impact of the candidates' healthcare proposals. Obama's expanded-coverage plan would cost an estimated $50 billion to $65 billion a year, his campaign estimates. McCain's campaign contends his proposal is revenue neutral - offsetting the cost of new tax credits of $2,500 for individuals and $5,000 for families who purchase their own health coverage by making employer-paid insurance benefits a taxable benefit.
Obama has proposed raising about $100 million annually in new revenue by allowing the so-called Bush tax cuts for individuals earning more than $250,000 to expire by 2011. McCain's campaign this week argued that Obama's vote in June for a nonbinding budget resolution, essentially a five-year guideline for the future, reflected his support for increasing taxes on the middle class. The Democratic-led resolution was based on the assumption that the Bush tax cuts on all income levels would expire and return to their higher pre-2001 rates.
FactCheck.org, a project of the nonpartisan Annenberg Public Policy Center at the University of Pennsylvania, called the McCain camp's allegations false and cited a Tax Policy Center analysis that says Obama's campaign proposals would mean tax cuts for all taxpayers earning less than $169,480.
But Tucker Bounds, a McCain spokesman, said the campaign stands by its assertion. "What Barack Obama is proposing on the campaign trail every day is in sharp contrast to the votes that he's cast in the US Senate, and it is incumbent on him to reconcile his voting record with his words or take the heat for his votes that are on the record in the US Senate," Bounds said.
Meanwhile, Democrats yesterday jumped on McCain for remarks he made about Social Security on Monday in Denver, where he relaunched his economic plan. "Americans have got to understand that we are paying present-day retirees with the taxes paid by young workers in America today. And that's a disgrace. It's an absolute disgrace and it's got to be fixed," McCain told the audience.
"We've got news for him: That's the way Social Security was designed under [Franklin Delano Roosevelt]," US Representative Kathy Castor, Democrat of Florida, told reporters in a conference call with other Obama supporters, arranged by the Democratic National Committee.
Castor and others said McCain is threatening the future solvency of Social Security with his proposal, similar to one by President Bush, to partially privatize Social Security by allowing younger workers to set aside a small amount in personal savings accounts while preserving benefits of current retirees.