October 29, 2008
Column # 1,418
Neither Candidate Fiscally Responsible
by Mike McManus
My grandchildren are visiting this week. On Halloween, we will trick or
treat with all six
As I think about their future, however, I am depressed as I compare the
political proposals of both Barack Obama and John McCain. Each of them
have outlined massive spending increases and tax cuts when the federal
deficit is huge and growing. The deficit for Fiscal 2008, which ended
Sept. 30 was a staggering $455 billion. Experts believe it will hit $1
trillion this year, as a result of declining tax revenues and increasing
Yet both candidates say they do not have to trim back any of their vast
pre-crisis proposals, although America's fiscal crisis has become grave
in the past month.
Indeed, both calling for a "fiscal stimulus" that could add $150 billion
to $300 billion more to the deficit.
Why? Politicians can ignore my grandchildren who are not old enough to
vote. Yet who will have to pick up the tab for whatever this generation
spends plus interest?
Let's recall a little history. To his credit, Clinton had a $236
billion budget surplus in his last year in office. The total Federal
debt was $5.6 trillion.
Bush proposed a tax cut projected to cost $1.3 trillion over a decade,
but also said, "My tax cut plan for America is responsible because it
sets priorities...My plan balances the budget."
In fact, the national debt has doubled just during his years to more
than $10 trillion.
That's a reason for healthy skepticism about McCain and Obama.
McCain has proposed bigger tax cuts than Obama. He also promised
spending cuts, but is not specific about where most would come from.
Yet he says he would balance the budget by the end of his first term.
According to the Tax Policy Center, McCain's tax cuts would cost $1.5
trillion in lower revenue over his first term, and $4.2 trillion over a
More than one-third of that would pay for extending the Bush tax cuts of
2001 and 2003 beyond their expiration in 2010. He would also change the
alternative minimum tax so it would impact fewer middle income taxpayers
and cut corporate taxes.
Finally, McCain proposes a $5,000 tax credit per family to buy health
insurance, although it would be partly paid for by taxing
worker-provided health care benefits. The net cost: $800 billion through
McCain's spending proposals are more modest than Obama's. He proposes
increasing the size of the military plus energy incentives, income
supplements to older, low-income workers and more money for the No Child
Left Behind program now costing $26 billion.
He says reductions in the forces in Iraq will save billions, though
neither he nor Obama count the cost of sending more troops to
Afghanistan. He says he'll cut corporate welfare, ending earmark
spending and freeze domestic appropriations except for Defense, Medicare
Social Security and veterans.
Obama would also extend the Bush tax cut for those earning less than
$250,000 a year, but would repeal tax cuts about that level
immediately. He proposes tax cuts for low income workers and small
businesses, and a cut on the alternative minimum tax, except for the
rich. Obama claims that his tax increases on the rich would pay for his
health care plan that costs $115 billion the first year.
Even though Obama would raise some taxes, his tax cuts would cost $1
trillion over his first term and $2.9 trillion over a decade.
Obama's health plan would extend health care coverage to half of the 45
million uninsured Americans by requiring all parents to get coverage for
their children, and would expand public programs such as Medicaid to
help pay for it. He would require bigger corporations to offer health
insurance to workers or pay into a fund that would subsidize coverage to
others, such as those in small businesses.
The federal cost of Obama's health plan is $1.6 trillion over 10 years
according to the Tax Policy Center vs. $1.3 trillion for McCain's.
Yet none of these proposals deal with the huge increased costs of Social
Security and Medicare due to the retirement of the baby boom generation,
which gets underway after 2010. The respected Concord Coalition
estimates that unfunded liability at $50 TRILLION.
It is time for Obama and McCain to learn from America's fiscal crisis.
Both individuals and the financial sector spent too much and saved too
Our candidates for President should be setting examples of fiscal
probity. Instead both offer proposals that lack any monetary
Speaking for my grandchildren, I vote against both Obama and McCain on
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