McCain bucks Congress' waste of dollars
We've heard a lot of talk about change from Democrats in this political season. Yet it is John McCain who proposes the most useful change by shaking up Washington's bipartisan culture of spend, spend and spend some more while funneling tax goodies to fat cats.
A pledge to end corporate welfare, a one-year pause in discretionary spending, a threat to veto earmark-stuffed bills and a promise to keep taxes low anchor the economic plan McCain outlined this week. Reining in Washington's proliferate ways sounds like a typical Republican agenda. (OK, maybe not that corporate welfare part -- but that's what makes McCain an appealing maverick.)
However, promoting those goals is a challenge for a GOP candidate this year because spending by Congress and handouts to powerful interests mushroomed while the Republicans ruled in the Senate, House and White House. It got so bad that Democrats captured control of the Congress two years ago partly on a promise to impose fiscal discipline on Washington.
Yet, things haven't changed. The New York Times reports that a bipartisan Senate effort has loaded a bill to help homeowners threatened by foreclosure with billions of dollars of tax breaks to automakers, airlines, alternative energy producers and other businesses. Sounds like something McCain might see as corporate welfare.
That came on the heels of a report on pork-barrel spending from Citizens Against Government Waste. The group's 2008 Congressional Pig Book found that Congress had approved $17.2 billion for 11,610 earmarked projects -- the second highest total ever -- in 12 appropriation bills. The money goes for such things as a sheep institute in Montana, a lobster institute in Maine and olive fruit fly research in France.
No doubt some industries in these troubled economic times can make a case for tax relief, but tax breaks seem to hang around long after the economic justification has passed. And no doubt some earmarks are popular. Illinois Democratic and Republican lawmakers got $1.65 million for the Shedd Aquarium, one of my favorite places in Chicago. Yet I would have a hard time explaining to a Texan who may never visit the Shedd why his tax dollars should support this gem by the lake.
Democratic presidential candidates Barack Obama and Hillary Clinton have sponsored earmarks, she famously for a hippie museum. Only McCain eschews such pork spending. It's what gives him credibility on the fiscal front.
His best tax idea is an alternative system where Americans could opt to file with a simple two-tax-rate form, avoiding the complications of the current code. The rationale is that Americans would come to appreciate a simpler, fairer tax system. This is a radical idea that strikes at the heart of a byzantine tax code that now encompasses 67,000 pages and is aimed as much at letting government manage our lives as raising necessary revenues.
A staunch free-trade advocate, McCain also advocates reducing the corporate tax rate from 35 percent to 25 percent. Brushing aside Democratic corporation bashing, McCain understands a tax rate that is the second highest in the world is an impediment to American investment and job creation.
He offers a pro-growth agenda in contrast to the simple-minded roll-back-the-Bush-tax-cuts and anti-free-trade mantra of the Democrats. Particularly muddled was the thinking by Obama at Wednesday's Democratic debate. He favors raising the capital gains tax from 15 percent to as high as 28 percent. Told revenues from this tax go down when the tax goes up while collections increase when the capital gains rate falls, Obama stood firm. He pointed to the huge incomes of hedge-fund managers, suggesting this is a tax fairness issue. In other words, to score class warfare points, Obama would raise this tax even though it would reduce economic activity and thus revenues for government.
That's the kind of change our economy can do without.
