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Posted at 2:12pm on Apr. 15, 2008 McCain Adviser Holtz-Eakin Gives a Teleconference

More on McCain’s Economic Proposals

By blackhedd

I just attended a press call given by Douglas Holtz-Eakin, Senator McCain’s senior adviser for economic policy. He was there to take questions from the press, to clarify some important statements that the Senator made in Pittsburgh.

Doug didn’t really have too much to add to what McCain said. The headlines are: a proposal to eliminate the 18-cent-per-gallon federal tax on gasoline for several months this summer; support for proposals to improve student-loan availability this fall in the face of the continuing credit crisis; support for a quite complex program that would facilitate private workouts of distressed mortgages; and some clear statements on tax and fiscal policy.

The important takeaway from the McCain campaign is that Washington does not have a revenue problem, as the current tax system has no trouble taking 19% of GDP out of the economy. Rather, we have a spending problem.

Much has been made of McCain’s statements in favor of a two-track income tax system, but Doug clarified that the Senator has yet to espouse a specific proposal. The general drift is that he wants to enact a simplified (presumably flatter) tax system that individuals can choose, at their option, when paying their taxes. Again, no further details.

The most important points were made in terms of spending and revenue reductions. The Senator hopes to enact about $195 billion (by my count) in annual revenue reductions through a variety of means (including changes in the corporate tax rate, and “base-broadeners” like eliminating what is often called “corporate welfare"). And the revenue cuts would be balanced by equal-sized cuts in discretionary spending, including earmarks. Pretty good stuff, and a pretty good start.

On taxes, Doug stated that McCain intends to scrap the alternative-minimum tax altogether, not just patch it as the Democrats have been doing. Good idea.

He also stressed repeatedly that we have no need to increase taxes. The combination of spending cuts and revenue reductions will be revenue neutral.

-Francis Cianfrocca (“blackhedd”)

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