(Danville, California)
Sen. John McCain shocked a lot of people a few weeks back when he admitted that economics are not his strong suit - that his strengths are military and foreign policy. Now his confession about his weakness in the area of economics may be true, but it's odd for a politician to make such a confession publicly. This may be true especially as the nation teeters on the edge of a recession.
Undaunted, McCain has now released parts of his economic plan. He did it in Pittsburgh, which is surprising too! Pennsylvania holds its primary next Tuesday, and it is a state that has been among the hardest hit during the current economic downturn (as well as the "rusting" of the nation's industrial heartland these past thirty years). In other words, McCain was risking a lot of criticism in the riskiest of all places. We'll see how he and his plans fare. In the meantime, here are some highlights of his plan and their possible political consequences.
1) FREEZE the Federal Gas Tax: This is bound to be criticized as a political gimmick. The eighteen-cent tax would not be collected from Memorial Day to Labor Day this year. Tourists will love this, but communities waiting for new roads or highway projects may have to wait still longer, as this tax is a key funding source. Democrats in Congress aren't known to be tax cutters. We'll see whether McCain's idea lives or dies on the Senate floor. Prospects: Dicey at best.
2) ELIMINATE the Alternative Minimum Tax: This idea is popular in both parties. The tax was originally intended to make sure the very wealthy would pay federal taxes. Now, many families in the $150,000 income range are being hit hard, and this group is no longer part of America's wealthiest. Elimination of the Alternative Minimum Tax has bipartisan appeal, but probably won't happen until this time next year, way after the election. Besides, how do you replace the revenue? Prospects: Promising, but a long wait.
3) CUT corporate taxes from 35 percent to 25 percent: This is a classic Republican vs. Democratic fight. The GOP always insists that companies will pour their tax savings into research and development, creating new products and jobs. Democrats argue that big business gives big bonuses to high-paid executives and shares little with the rank and file worker. Prospects: A very tough sell when the price of gasoline nears $4 a gallon, yet oil companies are making multibillion dollar profits!
Senator McCain's best prospects lie in two other areas: Making the Bush tax cuts permanent and cutting Congressional spending. Many economists now agree the tax cuts helped, especially after the 2001 recession. They may help stimulate the economy again, as people spend the money. But McCain has always railed against Congress for wasteful spending and politically charged "earmarks" on unrelated bills. The Congressional Budget is often like a year-round Christmas tree, with people on both sides of the aisle lavishing their districts with expensive projects. To rein in federal spending, McCain (or his opponents) must put an end to these earmarks!
I will be in Pennsylvania next week for the primary! Check back often at www.MarkCurtisMedia.blogspot.com
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