Show Us the Money

Washington Matters

Show Us the Money

In the presidential campaigns, this is economy week (again), with Barack Obama and John McCain each touting his plan for improving the lives of ordinary Americans, while lambasting his opponent's ideas. Too bad that neither one is telling us the truth.


John McCain is again promising to balance the budget in four years, after having abandoned that pledge several weeks ago in favor of more and bigger tax cuts. The only problem is, he's not abandoning the tax cuts and offers not a single step or fact to make his balanced budget claim believable. Obama, meanwhile, keeps adding to his spending pledges, making a balanced budget equally unlikely.


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McCain would extend all of Bush's tax cuts that are set to expire by 2011 ($700 billion over five years), eliminate the alternative minimum tax ($60 billion a year), cut the top corporate tax rate from 35% to 25%, increase the dependent exemption, lower the estate tax rate and add a host of other tax cuts. The nonpartisan Tax Policy Center says his plans would reduce taxes by about $1.1 trillion in his four-year term.


On the spending side, McCain promises to freeze discretionary domestic spending (no gain or loss), eliminate all earmarks, (a savings of only $17 billion a year), get rid of unspecified corporate pork programs, and reduce an undetermined amount of waste in defense. At the same time, he'd continue the commitment to Iraq, which is costing us over $100 billion a year.


That leaves a deficit of hundreds of billions a year that McCain says would disappear because the cuts in taxes would spur growth to the point that revenues would still be higher than they would be without the tax cuts. Even if he succeeds in getting the economy back on track, there'd never be enough additional revenue to balance the budget.


Obama's plan isn't any more realistic. While McCain accuses him of wanting to raise everyone's taxes, he's actually pushing a cut for most taxpayers and is open to reducing corporate taxes and the estate tax. He would raise taxes on those making over $250,000, but not enough to make up the difference. His total tax cut amounts to about $870 billion over what would be his first term, according to the Tax Policy Center, meaning he's hardly a tax-raiser, as McCain charges, but hardly fiscally prudent either.


Plus Obama has a host of big spending plans, neatly toted up today by the Los Angeles Times. They include a $65 billion a year health plan, $15 billion a year invested in alternative energy incentives, $6 billion a year to rebuild the nation's infrastructure, and several smaller programs. The total tab, according to Obama's own campaign, is $80 billion a year.


He argues that the new spending can be financed if the U.S. gets out of Iraq, which he says will save $90 billion a year. But even Obama is edging up to the notion that a quick withdrawal from Iraq is unlikely. Besides, what savings in cash and military resources are achieved in Iraq will then have to be spent on the war in Afghanistan, which is intensifying and which Obama has long said needs greater attention.  


It's time for the fairy tales to stop, especially from two candidates who have long promised to chart a policy path based on pragmatism and reality. Neither man is being honest about what he would be able to do in office and neither is fairly describing his opponent's plan.


So here's a modest proposal. Drawing up a budget plan for fiscal 2010 -- or at least updating the one President Bush will leave behind -- will be one of the first orders of business for the new president. Why not go ahead and draw it up now, release it to the public and let us subject it to a truth test?

But don't hold your breath waiting for it.