McCain Adviser: Budget Will Balance Itself
With the federal budget deficit expected to balloon to a record $490 billion in 2009, it would seem nearly impossible for Sen. John McCain to make good on his pledge to balance the budget by 2013. After all, his economic plan is heavily focused on tax cuts. Not to fear, said John Taylor, Stanford economics professor and Hoover Institute senior fellow, during a McCain campaign conference call with reporters. The budget will balance itself — without cuts to Social Security and Medicare, the costs of which are set to explode with the beginning of mass retirement of Baby Boomers — because troop reductions in Iraq will lead to a decrease in spending, and lower taxes will bring higher revenues, Taylor said.
According to the remarks Sen. McCain’s already given, there’s going to be a reduction by 2013 in force levels, and that is a reduction in spending that’s a big part of what he plans for bringing the budget into line. In addition, there’s a proposal to [institute] a one-year freeze on spending to restore credibility in the government operations. That also takes some spending off the top…[With] all of these changes, still, there’s going to be a growth of spending of 2.5 percent per year, in this period. The reason the budget comes into balance is even with the tax proposals he’s made, revenue growth is quite a bit faster than that, over five percent per year. That’s what brings the budget into balance.
McCain adviser Carly Fiorina was quick to add that the Arizona senator did plan to address the Social Security and Medicare issue as president by calling for a bipartisan commission to find a way to make the entitlement programs solvent. Yesterday, in an interview with George Stephanopoulos, McCain declined to rule out the possibility of a payroll tax increase to increase revenue for Social Security. McCain spokesman Taylor Griffin suggested agricultural subsidies as one area where spending cuts could be made.
I’ll leave the analysis of Taylor’s statements to the economic experts, but it seems that McCain is clearly counting on a very rosy outlook for the future. With McCain’s vow to extend all of the Bush tax cuts, this sounds eerily familiar. Remember how President Bush was supposed to have us on track for a balanced budget by 2012?