Obama campaign: "McCain economic plan represents a continuation of the same economic policies"

[ProSense]

Monday, July 7, 2008

Obama Campaign Memo on McCain Economic Proposals

MEMORANDUM

To: Interested Parties
Fr: Jason Furman, Economic Policy Director, Obama Campaign
Re: The McCain Economic Plan: Four More Years?

Earlier this year, Senator John McCain said that the nation had made “great progress economically” under the leadership of George W. Bush. On the eve of John McCain’s “Jobs First” economic tour this week, one thing is clear: the McCain economic plan represents a continuation of the same economic policies we have seen for the past eight years.

As currently constructed the McCain plan does not address the immediate challenges facing our economy, like the 438,000 jobs that have been lost in the past six months, the 400 percent increase in the cost of gas at the pump, and a massive contraction in the housing market. The McCain plan offers no hope of relieving burdens for middle-class families struggling with wages that have been stagnant for a generation and household incomes that have fallen $962 in this economic “expansion.” Instead, the McCain plan would continue the economic policies of the last eight years that have added $4.0 trillion to the deficit, primarily with tax cuts for the wealthiest 2 percent of Americans who did not need and did not ask for them. Indeed, McCain’s plan proposes to double down on these policies, with tax cuts that are more expensive and stacked against average Americans than anything President Bush has ever proposed.

According to the Wall Street Journal, the McCain campaign plans to spend the week “repackag proposals he has already outlined” rather than improving on their economic plan. But no amount of repackaging can alter three basic facts about the McCain plan:

1. Senator McCain has no plan for immediate fiscal stimulus to help struggling families or jumpstart our economy. In January Senator McCain said the economy was not slipping into recession and said he was “skeptical” about the stimulus measures being considered. His top economic adviser said stimulus plans were typically unnecessary “junk.” That same month Barack Obama proposed a fiscal stimulus plan centered on rebates to workers and seniors, a package similar to what was ultimately passed on a bipartisan basis. At the same time, Senator Obama warned that if the economy worsened further another round of stimulus would be needed. On June 9th, Senator Obama called for a second stimulus, with at least $50 billion in immediate measures to help jumpstart our economy. On July 3, in the wake of news that our economy has now lost jobs for six straight months, Senator Obama asked Senator McCain to join him in passing an immediate stimulus plan. However, since January when John McCain announced during a debate that he thought Americans were better off because of George Bush’s economic policies, he has failed to propose any immediate measure to give our economy shot in the arm by putting more money in the pockets of Americans hit hardest by the downturn.

2. The McCain tax cut plan completely leaves out 101 million households – including those working and middle-class Americans hardest hit by this downturn. In contrast, Senator Obama’s plan benefits 95 percent of workers and their families. The principal middle class tax cut proposed by John McCain is an increase in the dependent exemption that will not be fully in effect until 2016. Most households without children would see nothing under the plan – a total of 101 million households, including 67 million households currently paying income taxes but who would not benefit because they have no dependents, and 34 million low-income households with no income tax liability but generally paying payroll taxes. Nearly all seniors (37 million out of 38 million) would be left out. Even for families with children, the increase in the dependent exemption provides only a modest tax cut. In the first year of the plan, it would be worth about $125 to a middle-class family with two children. That same family would eventually see their taxes increase under the McCain plan, because his health care plan would raise taxes on middle-class families over time. This is completely inadequate, and will not help the very people whose reduced spending is contributing to our slowing economy. The Obama plan offers more generous tax relief for middle class families, including a “Making Work Pay Credit” that would benefit 95 percent of workers and their families, providing $1,000 for a typical working family. Obama’s plan would also expand tax credits to help families save, send a child to college, pay for childcare, and afford their mortgage, while eliminating income taxes for all seniors making less than $50,000.

3. McCain’s plan continues the Bush policies of tax cuts that are not paid for, which will push our deficits higher and further weaken our economy. His plan continues giving tax cuts to those who need them least and didn’t ask for them, including the wealthiest 2 percent of households and large corporations – including big oil which gets $4 billion in new tax breaks from John McCain. Although economists generally agree that short-run stimulus measures should not be paid for, it is critical that sustained policies like middle-class tax cuts be paid for in order to avoid economic damage in the short run and inevitable tax increases in the future. Currently, McCain’s budget plan “will add $200 billion to $300 billion or, depending on his voluntary tax system, even more” annually to the deficit according to the New York Times. If McCain cut back on his more than $100 billion in annual corporate tax cuts – including $1.2 billion for Exxon-Mobil alone – plus other tax cuts for the most affluent, he could afford to pay for more tax cuts for middle class families.

1. Senator McCain does not have an immediate plan to jumpstart our economy, and has failed to support Barack Obama’s fiscal stimulus plan.

In this campaign, Senator McCain and I are having a robust discussion about our different visions for what we’ll do as president. But when it comes to creating jobs and brokering relief for families who are struggling, we can’t wait six months for the next president, and that’s why today I’m calling on Senator McCain and all members of Congress, to come together and support this 50 billion dollar stimulus package. Let’s show the American people that we can come together, Republicans and Democrats, to ease the burden on working families let’s not wait another 6 months for more bad news.
- Barack Obama in Fargo North Dakota, July 3, 2004

The economy is facing a serious downturn: Our economy has lost 438,000 jobs in 2008, six straight months of job loss. In May, the unemployment rate jumped from 5.0 percent to 5.5 percent – the largest once month increase in more than 22 years. Our housing market continues to deteriorate and consumer expectations for the future have fallen to the lowest levels ever recorded. Experts from Lawrence Summers to Robert Shiller agree that another round of fiscal stimulus is warranted.

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[Alter Ego]

1. I was wondering when he was going to bring back "McCain = Bush".

Thanks, Barack.

[Hope And Change]

2. K & R!