McContradictions on Spending

The New Republic has an article which provides a good follow up to this post yesterday. I commented on how McCain’s promised tax cuts would add more to the deficit than the spending increases for programs promised by Obama. The New Republic writes:

John McCain’s fantastical pledge on Monday to balance the budget by 2013 through massive tax cuts and unidentified budget reductions deserved the bad reviews it received. But the most unfortunate element of his incoherent promise is that it’s representative of his policy agenda these days. While the McCain campaign is trying to paint Barack Obama as a flip-flopper, the Arizona Republican is making diametrically opposed policy promises to different audiences at the same time. The contradictions are often in the details, but their obscurity is evidence of the campaign’s cynicism.

The article reviews many contradictions made by the McCain campaign. Here’s just one of the examples they discuss:

Take McCain’s ambitious health care plan. It would give every family a $5,000 health insurance tax credit at a cost of $3.6 trillion, by his campaign’s own account. Despite its size, McCain aides have said, repeatedly, that McCain’s health care proposal has no net cost. That’s because it would tax workers’ health benefits, which the Joint Committee on Taxation agrees will raise $3.6 trillion (in its analysis of the Bush proposal that served as the model for McCain’s plan). Taxing health benefits solves the budget problem, but it creates another: It raises taxes on tens of millions of middle-class families, according to a Center for American Progress Action Fund report one of us co-authored.

Rather than face up to the difficult choice between higher deficits and more taxes, McCain advisors are attempting to have the best of both worlds. Jonathan Cohn noted “rumors” that McCain was actually subjecting health benefits to income taxes but not to payroll taxes–a policy that would help middle-class families but explode the deficit. And the McCain campaign told Daily Tax Report that “health benefits would only be subject to income taxes, not payroll taxes.”

This makes no sense. The campaign’s own $3.6 trillion figure is based on both income and payroll taxes. To say the plan cuts taxes by $3.6 trillion, has no budget cost, and doesn’t raise payroll taxes is sort of like saying that Cindy McCain’s passion fruit mousse recipe has no fat, burns calories, and eliminates male pattern baldness: It’s impossible.

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