McCain promises to balance budget

Sen. John McCain (R-Ariz.) plans to promise on Monday that he will balance the federal budget by the end of his first term by curbing wasteful spending and overhauling entitlement programs, including Social Security, his advisers told Politico.

The vow to take on Social Security puts McCain in a political danger zone that thwarted President Bush after he named it the top domestic priority of his second term.


McCain is making the pledge at the beginning of a week when both presidential candidates plan to devote their events to the economy, the top issue in poll after poll as voters struggle to keep their jobs and fill their gas tanks.

“In the long-term, the only way to keep the budget balanced is successful reform of the large spending pressures in Social Security, Medicare, and Medicaid,” the McCain campaign says in a policy paper to be released Monday.

“The McCain administration would reserve all savings from victory in the Iraq and Afghanistan operations in the fight against Islamic extremists for reducing the deficit. Since all their costs were financed with deficit spending, all their savings must go to deficit reduction.”

The pledge is a return to an earlier position he'd later backed away from. On April 15, McCain backed off a February pledge to balance the budget in his first term when asked about it by Michael Cooper of The New York Times, who reported that McCain said “at a news conference … that ‘economic conditions are reversed’ and that he would have a balanced budget within eight years.”

McCain advisers admit that the document is a repackaging of previous policies, without dramatic new initiatives. Some Democratic officials had thought McCain might try to make a splash by proposing a bold middle-class tax cut.

Jason Furman, Obama's economic policy director, called McCain's pledge “preposterous." Furman pointed out that the Congressional Budget Office now estimates a 2013 deficit of $443 billion, assuming the Bush tax cuts are extended. And he estimated that McCain would have to cut discretionary spending—including defense—by roughly one-third to bring the budget into the black by then.

"McCain would have to pay for all of his new tax cuts and other proposals and then, on top of that, cut an additional $443 billion from the budget—which is 81 percent of Medicare spending or 78 percent of all discretionary spending outside of defense," Furman said.

McCain’s tour of swing states is designed to relaunch his candidacy after a high-stakes shakeup last week in his campaign organization, which has been widely criticized as soft and slow compared to the Obama machine.

Sen. Barack Obama (D-Ill.) also is spending the week emphasizing economic issues, and plans to tout the family-friendly, bottom-up benefits of his proposals.

Obama begins the week in Charlotte, N.C., with what his campaign calls “a discussion on economic security for America’s families.”

The Obama campaign sought to steal McCain’s thunder by holding a conference call Sunday to portray McCain as out of touch and not up to the job on economic matters.

McCain’s emphasis on balancing the budget is likely to excite conservatives, who have remained skeptical of his candidacy, and provoke derision from Democrats, who will argue that it’s a warmed-over version of proposals that President Bush failed to enact.

The budget was in surplus when Bush took office but now is deeply in the red—$410 billion, the White House projects, blaming the demands of war and homeland security.

McCain begins his tour in Colorado, then goes on to Pennsylvania, Ohio Michigan and Wisconsin—five of this year’s 10 most closely contested states.

As part of his effort to call attention to his plans, McCain plans interviews with the network anchors on Wednesday.

In “ Jobs for America: The McCain Economic Plan,” a 15-page document to be released Monday, the senator vows to “Bring The Budget To Balance By 2013” through:

--“Reasonable economic growth. Growth is an imperative – historically the greatest success in reducing deficits (late 1980s; late 1990s) took place in the context of economic growth.”

--“Comprehensive spending controls. Bringing the budget to balance will require across-the-board scrutiny of spending and making tough choices on new spending proposals.”

--“Bi-partisanship in budget efforts. Much as the late 1990s witnessed bipartisan efforts to put the fiscal house in order, bi-partisan efforts will be the key to undoing the recent spending binge.”

The plan’s big message is: “John McCain has a comprehensive economic plan that will create millions of good American jobs, ensure our nation's energy security, get the government's budget and spending practices in order, and bring relief to American consumers.”

Here are excerpts of the plan:

--Immediate relief for American families on gas and food prices: “Under his plan, the United States will be telling oil producing countries and oil speculators that our dependence on foreign oil will come to an end —and the impact will be lower prices at the pump. John McCain's policies will increase the value of the dollar and thus reduce the price of oil. …

“John McCain believes we should institute a summer gas tax holiday. Hard-working American families are suffering from higher gasoline prices. John McCain called on Congress to suspend the 18.4 cent federal gas tax and 24.4 cent diesel tax from Memorial Day to Labor Day.”

--Reforming Washington to regain the trust of taxpayers: “A one-year spending pause. Freeze non-defense, non-veterans discretionary spending for a year and use those savings for deficit reduction. A one-year pause in the growth of discretionary spending will be imposed to allow for a comprehensive review of all spending programs. After the completion of a comprehensive review of all programs, projects and activities of the federal government, we will propose a plan to modernize, streamline, consolidate, reprioritize and, where needed, terminate individual programs.”

--Supporting small businesses: “John McCain's Lexington Project will address the rising costs of energy that are hurting small businesses. He strongly supports increased domestic exploration of oil and natural gas. This will send a strong signal to oil markets that future supplies will be more plentiful, countering the rise in oil prices. …

“John McCain has a comprehensive health care reform plan that will reduce the spiraling cost of health care – a major burden for those small businesses that offer health insurance and a major impediment for those who cannot. He will provide $5,000 for health insurance to every American family—supporting small businesses that seek to offer insurance. John McCain opposes costly mandates or ‘pay or play’ requirements that would raise the financial burden on small business, cut the ability to hire, expand, or raise payrolls.”



--Cheap, clean, secure energy for America —The Lexington Project: “The current federal moratorium on drilling in the Outer Continental Shelf stands in the way of energy exploration and production. John McCain believes it is time for the federal government to lift these restrictions and work with states to put our own reserves to use. …

“Nuclear power is a proven, reliable, zero-emission source of energy, and it is time to recommit to advancing our use of nuclear power. The U.S. has not started construction on a new nuclear

power plant in over 30 years. … John McCain will put our country on track to construct 45 new nuclear power plants by 2030 with the ultimate goal of eventually constructing 100 new plants.”

--Health care reforms – better care, at lower cost, for every American: “John McCain will look to bring greater affordability and competition to our drug markets through safe re-importation of drugs and faster introduction of generic drugs. …

“John McCain will promote the availability of smoking cessation programs. Most smokers would

love to quit but find it hard to do so. Working with businesses and insurance companies to promote availability, we can improve lives and reduce associated chronic diseases through smoking cessation programs. …

“John McCain will give every family a refundable tax credit – cash towards insurance – of $5,000 (Individuals receive $2,500). Every family in America, regardless of the source of their insurance or how much they make will get the same help. Families will be able to stay with their current plan, or choose the insurance provider that suits them best and have the money sent directly to the insurance provider.”

--Taxes: simpler, fair, pro-growth and competitive: “John McCain will keep the top tax rate at 35 percent, maintain the 15 percent rates on dividends and capital gains, and phase-out the Alternative Minimum Tax. …

“Cut The Corporate Tax Rate From 35 To 25 Percent. …

“Allow First-Year Deduction, Or ‘Expensing’, Of Equipment And Technology Investment.”

--Trade: “Lower Barriers to Trade …

“John McCain will reform the half-dozen training programs to approaches that can be used to meet the bills, pay for training, and get back to work. John McCain believes that we can strengthen community colleges and technical training, and give displaced workers more choices to find their way back to productive and prosperous lives.”

Additional reporting by Jonathan Martin.