Economy -- McCain Tax Cuts = Bush On Steroids

June 30, 2008

by Faiz Shakir, Amanda Terkel, Satyam Khanna, Matt Corley, Ali Frick, and Benjamin Armbruster

ECONOMY

McCain Tax Cuts = Bush On Steroids

Sen. John McCain (R-AZ) consistently fearmongers that "Democrats...want to raise your taxes...I want to lower your taxes" and threatens that under Sen. Barack Obama's (D-IL) tax plan, "Americans of every background would see their taxes rise." Not only is McCain's claim that Obama will raise every American's taxes false, but in reality, it is McCain's economic and tax plans that Americans should fear. His plan would double President Bush's tax cut while offering little in the way of offsetting those costs. As New York Times columnist and Princeton University economics professor Paul Krugman noted, McCain's economic proposals are "Bush made permanent" that "would leave the federal government with far too little revenue to cover its expenses." But while McCain tries to rebut claims that his administration would not represent a continuation of Bush's policies, even his top surrogate, Sen. Lindsay Graham (R-SC), acknowledged reality, admitting recently that McCain's economic policies would "absolutely" be an "enhancement" of Bush's. Oddly though, McCain's top economic adviser Douglas Holtz-Eakin has tried to claim Obama is a continuation of Bush, a remark even conservatives find absurd. Today, a Center for American Progress Action Fund event -- dubbed "McCain University" -- will educate and inform voters, reporters, and pundits about the consequences of adopting McCain's policies.

BIG CORPORATIONS WILL CASH IN: Part of McCain's overall economic policy is to reduce the federal corporate tax rate from 35 percent to 25 percent. What does this actually mean for America's largest corporations? According to a new report from the Center For American Progress Action Fund, McCain's tax plan would save corporations $175 billion per year, with $45 billion going to America's 200 largest corporations as identified by Fortune Magazine. McCain has also said the "nation cannot reduce its dependency on oil unless we change how we power our transportation sector." But at the same time, he is calling for increased oil exploration and production, which will not only do little to relieve energy prices here at home but also will put billions more into Big Oil's pockets. McCain's corporate tax rate reduction plan would save the five largest U.S. oil companies a grand total of $3.8 billion per year. Exxon Mobil, whose $11.7 billion 2007 fourth quarter profits shattered records, will see an extra $1.2 billion under McCain's tax plan. America's big corporations seemed to have taken notice of the potential benefits. A recent analysis by the Public Campaign Action Fund found that McCain's campaign has received $5.6 million from the PACs and executives of the Fortune 200, including nearly $800,000 from oil and gas industries.

THE RICH WILL GET RICHER: The largest American corporations aren't the only ones who will cash in under McCain's plan. Add the richest Americans to the list. In a recent study, the nonpartisan Tax Policy Center has found that McCain's tax plan "would primarily benefit those with very high incomes, almost all of whom would receive large tax cuts that would, on average, raise their after-tax incomes by more than twice the average for all households." Indeed, McCain offers no benefit for the poorest taxpayers; Obama's plan increases after-tax income for the poorest taxpayers by 5.5 percent. The Tax Policy Center also found that Obama "offers three times the break for middle class families than" McCain. While Obama will raise taxes on the richest 1 percent of taxpayers, McCain will increase after-tax income of the richest 3.4 percent. In fact, another beneficiary of McCain's plan are the McCains themselves. A recent paper by the Center for American Progress Action Fund found that John and Cindy McCain would save $373,429 under McCain's tax plan.

INCREASED DEFICITS: McCain has not explained how he would pay for these reckless tax cuts. His plan would cost nearly $300 billion and, so far, he has accounted for just $33 billion, or 11 percent of that total. Holtz-Eakin himself said, "You have to pay for that somehow or you are George Bush III." Indeed, a Center for American Progress Action Fund analysis released last month confirms Holtz-Eakin's assessment. McCain's entire economic plan, tax cuts included, would create massive deficits by the end of a two-term presidency -- the highest federal budget deficit in 25 years -- and would accumulate the biggest debt since the Second World War. Under McCain, yearly deficits would increase sharply, beginning with $505 billion in FY2009 that would skyrocket to $1.2 trillion by FY2017. In 2018 these deficits would reach 6 percent of GDP, tied with the largest deficits since WWII, while McCain's plan would leave a debt of $12.7 trillion after a two term presidency. McCain has claimed that he would eliminate earmarks (citing a constantly shifting figure of costs saved) to pay for his economic plan. The Washington Post FactChecker, however, gave McCain's plan to pay for his doubling of the Bush tax cuts through eliminating earmarks "Four Pinocchios" (the highest rating for deceit), calling it "largely fantasy" and "voodoo economics."

AFGHANISTAN -- CIVILIAN DEATHS UP 62 PERCENT IN 2008: New U.N. figures show that the number of civilians killed in Afghanistan in the first half of this year rose 62 percent over the same period last year, marking increased instability and deteriorating conditions in Afghanistan, the "Forgotten Front." The U.N. report shows that insurgents caused 422 civilian deaths while government or NATO forces caused 255, with 21 deaths unclear. A NATO spokesman said that "those numbers were far, far higher than we would recognize" but "provided no alternative figures." Earlier this month, Joint Chiefs of Staff Chairman Adm. Michael Mullen told staff at a public meeting that in Afghanistan "violence is up this year by every single measure we look at." Thirty-nine coalition forces were killed in Afghanistan this month, making June the deadliest month of the war and marking the first month that coalition deaths in Afghanistan surpassed those in Iraq. Military commanders "believe they need three brigades, or 10,000 troops, to address the situation in Afghanistan, but with the heavy U.S. commitment in Iraq, those numbers are difficult to muster."

IRAN -- HERSH: U.S. INCREASING COVERT OPERATIONS AGAINST IRAN: The New Yorker’s Seymour Hersh reported yesterday that late last year, "Congress agreed to a request from President Bush to fund a major escalation of covert operations against Iran." The "Presidential Finding" was designed to destabilize religious leadership and gather "intelligence about Iran's suspected nuclear-weapons program. "But the scale and the scope of the operations in Iran, which involve the Central Intelligence Agency and the Joint Special Operations Command (JSOC), have now been significantly expanded," Hersh wrote. "The Finding was focused on undermining Iran's nuclear ambitions and trying to undermine the government through regime change" and involved "working with opposition groups and passing money." Those activities reportedly include capturing members of the Iranian Revolutionary Guard and taking them into Iraq for interrogation. When asked to respond to Hersh, U.S. Ambassador to Iraq Ryan Crocker stated, "I can tell you flatly that U.S. forces are not operating across the Iraqi border into Iran." Responding to Crocker, Hersh said, "The fact is we're inside. We're not necessarily 'cross-border.' We have teams inside Iran."

IRAQ -- U.S. ADVISED IRAQI MINISTRY ON OIL CONTRACTS WITH WESTERN COMPANIES: Two weeks ago, the New York Times reported that the Iraq Oil Ministry was set to award no-bid contracts to develop Iraq's oil fields to five Western oil companies. Today, the Times discloses that "a group of American advisers led by a small State Department team played an integral part in drawing up [the] contracts," which is "the first confirmation of direct involvement by the Bush administration in deals to open Iraq's oil to commercial development." The advisers "provided template contracts and detailed suggestions on drafting the contracts," though they claim their involvement was meant only "to help an understaffed Iraqi ministry...and that they in no way helped choose which companies got the deals." Critics point to the presence of advisers as confirmation that the administration is "working behind the scenes to ensure Western access to Iraqi oil fields." The White House has denied pushing Iraq towards any decision. "Iraq is a sovereign country, and it can make decisions based on how it feels that it wants to move forward in its development of its oil resources," said White House spokesperson Dana Perino. Frederick D. Barton, of the Center for Strategic and International Studies, told the Times that explanations like Perino's are disingenuous. "We undermine our own veracity by citing issues like sovereignty, when we have our hands right in the middle of it."

The Bush administration issued a secret plan last year allowing Pentagon’s Special Forces to kill or capture al Qaeda leaders in Pakistan. But more than six months later, the Special Ops forces "are still waiting for the green light. The plan has been held up in Washington by the very disagreements it was meant to eliminate."

"Our enemies will test the new president early," said Sen. Joe Lieberman (I-CT) on CBS yesterday. "Remember that the truck bombing of the World Trade Center happened in the first year of the Clinton administration. 9/11 happened in the first year of the Bush administration."

Bogus claims that China is drilling for oil off the Florida coast "continue to circulate almost three weeks after a senator representing the state derided the claims as ‘akin to urban legends.'" The truth is China's oil company, Sinopec, has an agreement with Cuba, but its lease is for an onshore site and no actual drilling has taken place.

Gas prices rose to a record high last night, reaching an average of $4.086, up seven-tenths of a cent from $4.079 the previous day. Prices "have risen 2.9% in the last month and are almost 38% higher than where they were a year ago."

The Pentagon is refusing orders from the EPA to clean military bases where dumped chemicals pose "imminent and substantial" dangers to public health and the environment. "Experts in environmental law said the Pentagon's stand is unprecedented."

The White House is trying to stop the EPA "from publishing a document that could become the legal roadmap for regulating greenhouse-gas emissions in the U.S." The document outlines how the government can regulate emissions under the Clean Air Act, but the White House wants instead "the document to show that the Clean Air Act is flawed" and that regulations should be developed under new legislation.

Nine in 10 Americans expect the "ballooning costs" of gasoline "to squeeze them financially over the next half year, an Associated Press-Yahoo! News poll said Monday. Nearly half think that hardship will be serious."

"A nearly 700-page study released Sunday by the Army found that [in early 2003], U.S.-based commanders prematurely believed their goals in Iraq had been reached and did not send enough troops to handle the occupation." This faulty view was reinforced by President Bush’s May 1, 2003 "Mission Accomplished" declaration, the report said.

And finally: Ari Fleischer's father does not love that his son became a Republican. In remarks to the Freemasons of the Nation’s Capital, the former White House press secretary said that his father once told a local paper that, "if his son was going to rebel, it's better I became a Republican than a drug dealer -- but not by much."

"The Group of Eight wealthy nations are looking at investing more than $10 billion a year to support new technologies to reduce carbon dioxide emissions, including carbon dioxide capture and storage (CCS)...as a measure to help meet a global target to halve greenhouse gases by 2050."

MISSOURI: "A new Missouri law is giving college professors information they can use to potentially lower the price their students pay for textbooks and other study materials."

MASSACHUSETTS: "Tuesday marks the one-year anniversary of the deadline for most Massachusetts residents to carry health coverage."

CALIFORNIA: "California patients are being injured at a rate of about 100 a month, according to data compiled by the state Department of Public Health."

THINK PROGRESS: Weekly Standard editor Bill Kristol: "Republicans are much more open to strong women."

WONK ROOM: Nancy Pfotenhauer, dirty energy spokeswoman.

THE CARPETBAGGER REPORT: Fox News's "ominous" downward trend as it loses its lead over rival cable networks.

ATTACKERMAN: U.S. forces appear to have killed Iraqi Prime Minister Nouri al-Maliki's cousin, who may have been a leader of an Iranian-backed "special group."

"Afghanistan's becoming stable."
-- Conservative radio host Hugh Hewitt, 6/29/08

VERSUS

"The number of civilians killed in Afghanistan has risen by almost two-thirds in the first half of the year compared with 2007, UN figures showed today."
-- The Guardian, 6/30/08

Think Progress

McCain Tax Cuts = Bush On Steroids

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