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McCain releases budget proposals, containes no numbers.

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BUDGET MAGIC....Josh Marshall reads about John McCain's plan to balance the budget and is flabbergasted:

The general routine [in] the face of this kind of candidate announcement is that journalists and economists look at the numbers to see if they add up. In most cases, the exercises generates fairly unsatisfying contradictory opinions, with some experts saying one thing and other experts another.

But here's the thing. McCain doesn't have any numbers. None. Not vague numbers of fuzzy math. He just says he's going to do it. Any other candidate would get laughed off the stage with that kind of nonsense or more likely reporters just wouldn't agree to give them a write up.

Sure, but what's a Republican to do these days? They're supposed to be fiscal conservatives, which means they have to pretend to love balanced budgets. So McCain does. Raising taxes is, however, verboten by party fiat, which leaves an aspiring GOP president only two choices: (a) reducing spending and (B) magic. Unfortunately for our hero, proposing actual, concrete budget cuts of any substance is political suicide and he knows it. This leaves magic as the only alternative.

In McCain's case, this seems to take the form of blather about eliminating earmarks (a reform that might be worthwhile but wouldn't actually cut the budget); more blather about "wasteful spending" (the political blowhard's best friend); a bit of nonsense about reducing defense expenditures after we've won all the wars we're fighting (sure, you betcha); and finally, every stumped pol's favorite gimmick: an across-the-board one-year spending freeze. This is a standard last-ditch device that gets hauled out whenever there's no actual plan to do anything serious.

Now, that's all bad enough, but can you imagine how bad it would be if McCain actually had the balls to put numbers to this twaddle? No more magic! Instead it would just be a bad joke.

So McCain really doesn't have much choice. Given the economic pieties imposed on Republicans these days, he's probably picked the least bad option available to him. There are worse things than a few days of mockery, after all.

Kevin Drum 8:03 PM Permalink

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How would one go about imposing a spending freeze? The demographics suggest each year there will be more retirees on Social Security. Do we quit paying after we reach 11 months? "Sorry, we don't have any money left?" What if things take a turn for the worse in Iraq? "Sorry, no more money for bullets or body armor?"


Extreme examples, I admit, but between Social Security and Iraq, that's a pretty big hunk of the budget.

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July 8, 2008

Skepticism on McCain Plan to Balance Budget by 2013



WASHINGTON — The package of spending and tax cuts proposed by Senator John McCain is unlikely to achieve his goal of balancing the federal budget by 2013, economists and fiscal experts said Monday.

“It would be very difficult to achieve in the best of circumstances, and even more difficult under the policies that Senator McCain has proposed,” said Robert L. Bixby, executive director of the Concord Coalition, a nonpartisan budget watchdog group.

Mr. McCain, the presumptive Republican presidential nominee, is proposing billions of dollars in tax cuts. But advisers to Mr. McCain said those costs would be more than offset by savings from slower growth in spending.

In his proposal, Mr. McCain said he would hold overall spending growth to 2.4 percent a year. That is a tall order because federal spending has been growing an average of more than 6 percent a year in the last five years.

Mr. McCain said he would also slow the growth of Social Security, Medicare and Medicaid, and fiscal experts agree that he would need to do that to achieve his goal. But Mr. McCain did not give details of how he would alter those benefit programs, which have powerful constituencies, including older Americans, a huge health care industry and state and local government officials.

A longtime foe of pet projects known as earmarks, Mr. McCain said he would stop such spending. The Bush White House says earmarks this year total $17 billion, a comparatively small share of a $2.9 trillion budget.

Mr. McCain proposed a one-year freeze in most domestic spending subject to annual appropriations, “to allow for a comprehensive review.” This proposal would affect education, scientific research, law enforcement and scores of other programs.

Mr. Bush’s battles with Congress suggest it would be extremely difficult for Mr. McCain to win approval for such a freeze.

Mr. McCain said he was counting on “rapid economic growth” to help reduce the deficit. While a growing economy generates additional revenue, several of Mr. McCain’s tax proposals would be costly, experts said.

He would “phase out and eliminate” a provision of the tax code known as the alternative minimum tax, which has ensnared a growing number of middle-class Americans in recent years.

By his own account, repealing this tax “will save middle-class families nearly $60 billion in a single year.” That is $60 billion that would presumably not be available to the Treasury.

Mr. McCain also wants to extend many of the Bush tax cuts, scheduled to expire by Jan. 1, 2011. That could reduce tax collections below the levels assumed under current law, and it could widen the deficit, many economists said.

In January, the Congressional Budget Office estimated that extending the Bush tax cuts would cost more than $700 billion in the next five years.

Since January, the economy has been weaker than expected, making the goal of a balanced budget more difficult to achieve. The budget deficit in the current fiscal year is running much higher than in the previous year.

Other McCain proposals, like doubling the personal tax exemption for dependents and cutting the corporate income tax rate, would also reduce revenues, economists said.

C. Eugene Steuerle of the Urban Institute, who worked in the Reagan administration, said Mr. McCain “may well be committed to balancing the budget in five years, but does not tell you how he would reach that goal.”

J. Bradford DeLong, a professor of economics at the University of California, Berkeley, who worked at the Treasury under President Bill Clinton, said, “Senator McCain and his advisers want to claim they will balance the budget by 2013, but they have given us no clue and no plan to meet all the commitments he has made and still get there.”

On the other hand, history shows the deficit sometimes shrinks faster than experts expect.

That happened in 1998 in the Clinton administration, when the government ran a surplus for the first time in nearly three decades. And Mr. Bush cut the deficit in half faster than he or many fiscal experts had predicted.





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Oh gods, what the heck, Bush stated the same crap about having the budget balanced after the 2001 recession. Christ, we give so much crap to other countries on their budget deficits and overall debt, so how long before they come knocking on our doors?

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