CRFB Responds to Senator McCain's Convention Speech

Last night at the Republican National Convention, Senator John McCain proposed between $524 billion and $563 billion in annual spending increases and tax cuts, according to a new analysis by the Committee for a Responsible Federal Budget.

The policies discussed by Senator McCain included:

• Keeping taxes low (by making permanent nearly all of the 2001 and 2003 tax cuts and indexing the AMT patch) for $391 billion in 2013.
• Cutting corporate tax rates for between $55 billion and $68 billion in 2013.
• Reforming the health care system for a net cost of between $54 billion and $65 billion in 2013.
• Doubling the dependent tax exemption for between $15 billion and $30 billion in 2013.
• Reforming the unemployment program for at least $4 billion in 2013.
• Fostering the development of nuclear, clean coal, and renewable energy technology for at least $5 billion in 2013.

To pay for these tax cuts, Senator McCain promised that he would cut government spending by getting rid of failed programs, reforming the way government works, vetoing pork barrel spending bills, and reducing the overall size of government. These cuts together could add up to $215 billion, and might be accompanied by another $47 billion in new revenue from closing corporate tax loopholes and auctioning off pollution permits. The campaign has offered few specifics, however, as to what programs would be cut.

"Although the McCain campaign has discussed their tax cuts in considerable detail, they have been quite vague when it comes to spending reductions," explained Maya MacGuineas, president of the Committee for a Responsible Federal Budget. "While it is difficult to announce painful spending cuts during a presidential election, the American people are badly in need of some straight talk on this issue."

If Senator McCain is able to achieve all his proposed spending cuts, according to the Committee's analysis, it will still leave a budget hole of $200 to $300 billion in 2013.

"It is hard to imagine that Senator McCain will be able to pass everything he has promised on the campaign trail and still balance the budget by 2013. We are in a deep fiscal hole, and we need a serious and credible plan to get us out of it," said MacGuineas.

The Committee for a Responsible Federal Budget has released a complete analysis of all the proposals put forward by Senator McCain and Senator Obama, entitled Promises, Promises: A Fiscal Voter Guide to the 2008 Election at http://www.usbudgetwatch.org.