- The Washington Times - Friday, April 25, 2008

ANALYSIS/OPINION:

John McCain, Hillary Clinton and Barack Obama have now offered detailed proposals on many of the budget and tax priorities they would embrace on Day One in the Oval Office. But universally absent from the programs are estimates of budget deficits that would result from implementing their proposals. It is not enough to promise a balanced budget, as Mr. McCain does, or to commit oneself to restoring fiscal responsibility, as Mrs. Clinton has done. Voters deserve to know what budget-deficit levels the candidates would consider to be so egregious that they would delay implementing some of their spending and tax-cutting promises.

In many cases, a benefit (refundable tax credits for college tuition, for example) is promised without an estimate of its cost. In other cases, the cost estimates appear to be low-ball figures. For example, Mrs. Clinton and Mr. Obama have offered plans for universal health care with annual costs estimated by the campaigns to be $110 billion and $50-$65 billion, respectively.

Mr. McCain has offered a panoply of tax proposals, which include making the Bush tax cuts permanent, reducing the corporate income-tax rate by 10 percentage points, providing refundable tax credits for health insurance, doubling the personal exemption for children, permanently repealing the alternative minimum tax, allowing firms to write off the full cost of equipment investment during the first year, increasing the current estate-tax exemption and reducing the applicable tax rate, etc.

The two Democrats have their own tax packages, including promises to extend many of the middle-class tax cuts enacted during the Bush administration (e.g., alleviating the marriage penalty, instituting a 10 percent tax bracket, and doubling to $1,000 the child tax credit.). For all the legitimate complaints about the lack of specificity in Mr. Obama’s rhetoric about “hope” and “change,” the reality is that his economic plan is filled with countless refundable tax credits aimed at working- and middle-class families (e.g., a mortgage-interest credit, credits to partially offset payroll taxes, increases in the earned-income tax credit, and a refundable tax credit to cover the first $4,000 in annual college tuition.). On the spending side, in addition to health care, both Democrats are promising expensive infrastructure programs and alternative-fuel initiatives. Mrs. Clinton has her own plans for college aid, child care and retirement help. All three are now talking about programs to help homeowners in trouble.

Democrats pledge to finance their programs in part by eliminating the Bush tax cuts for families earning more than $250,000 per year. Mr. McCain promises to veto all pork-barrel earmarks, and, far less credibly, to eliminate many corporate tax loopholes and waste in government. This isn’t nearly enough. With budget deficits projected to exceed $400 billion in fiscal 2008 and 2009, the presidential candidates need to be far more forthcoming on the deficit levels they find acceptable and the date they would begin curtailing their promises in order to reverse the disastrous fiscal situation the next president will inherit.


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