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Oracle of Delphi

Greenspan: We can't afford McCain's tax cuts (Political)

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WASHINGTON - Alan Greenspan says the country can't afford tax cuts of the magnitude proposed by Republican presidential contender John McCain — at least not without a corresponding reduction in government spending.

"Unless we cut spending, no," the former Federal Reserve chairman said Friday when asked McCain's proposed tax cuts, pegged in some estimates at $3.3 trillion.

"I'm not in favor of financing tax cuts with borrowed money," Greenspan said during an interview with Bloomberg Television. "I always have tied tax cuts to spending."

McCain has said that he would offset his proposed cuts — including reducing the corporate tax rate and eliminating the Alternative Minimum Tax that has plagued middle-class families — by ending congressional pork-barrel spending, unnecessary government programs and overhauling entitlement programs such as Medicare and Social Security.

Democrats pounced on Greenspan's comments, in part because McCain professed last year that he was weaker on economics than foreign affairs and was reading Greenspan's memoir, "The Age of Turbulence," to educate himself.

"Obviously he needs to go back to that book and study it some more," Sen. Claire McCaskill, D-Mo., said during a conference call arranged by the campaign of Democratic nominee Barack Obama.

McCaskill said eliminating congressional earmark spending — estimated at $17 billion annually — cannot offset McCain's proposed tax cuts.

"That's a huge amount of money, but it's not even a drop in the bucket to pay for $3.5 trillion in tax cuts," she said. "So, every time he throws up earmarks and he's asked how he's going to pay for it, he knows he's being disingenuous, he knows he's not being forthcoming."

McCain aides dispute numbers

McCain campaign officials dispute the $3.3 trillion figure, saying it assumes eliminating 2003 tax cuts made by the Bush administration and then cutting from that higher level. They say McCain is proposing tax cuts worth $600 billion from current levels.

"John McCain opposed President Bush's tax cuts in 2003, because they didn't include the necessary spending controls. Sen. McCain's proposed job-growing tax cuts are modest in comparison to his plans to slow the exploding growth of federal expenditures — meaning that contrary to Chairman Greenspan's assertions, this relief isn't proposed on borrowed money," said McCain spokesman Tucker Bounds.

While McCain opposed the 2003 cuts and previous Bush administration tax cuts from 2001, he now says he would leave them intact. Obama has said he would repeal Bush tax cuts benefiting families making over $250,000 annually to pay for programs and provide middle-tax class relief.

Conservative summit miffed

Meanwhile, organizers of a conservative summit in Washington said McCain and his running mate, Alaska Gov. Sarah Palin, missed an opportunity by not addressing the gathering. Some 2,100 activists from 44 states, plus another 10,000 people who signed up to watch online, participated in the three-day Values Voter Summit.

On Saturday, McCain was less than 10 miles away, working in at his campaign headquarters in Arlington, Va. Palin was leaving Alaska and traveling to a rally in Reno, Nev. Last year, McCain and seven other GOP presidential candidates spoke at the summit.

"I think there is some disappointment that he's not here. I think there's greater disappointment that Palin is not here," said Tony Perkins, president of the Family Research Council, a key sponsor of the summit. "I think people would have liked to have heard from her."

Activists attending the summit were unanimous in their enthusiasm for Palin, including several who said their support for McCain was lukewarm before he selected her.

Gary Ward, pastor of the Rocky Point Church in Stephenville, Texas, said he supported former Arkansas Gov. Mike Huckabee for the GOP nomination but that his enthusiasm for McCain has been increased by his choice of Palin and his recent statement that he believes life begins at conception.

"That was absolutely the right answer," Ward said.

Elizabeth Kish, an administrative assistant from Gainsville, Fla., said she was put off by McCain's record on immigration and was considering voting for Libertarian Party candidate Bob Barr until Palin's selection.

"Once he chose Palin that was it for me," said Kish, who was wearing a "Pro-Life Pro-Palin" button and another button featuring pictures of Chief Justice John Roberts and Supreme Court Justice Samuel Alito under the slogan, "The Kind of Change I Believe In."

Link: http://www.msnbc.msn.com/id/26689925/

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I can think of about $10,000,000,000/month that we can quit spending.

You might want to change this to: "I can think of about $10,000,000,000/month that we can quit borrowing and then spending."

Sad thing is, even that wouldn't get us back to a balanced budget since we'd still be spending significantly more than we take in each month.

If there was some way to do it, I'd like to see the president and the entire congress put on trial for treason for putting the country in such a perilious financial situation. I know this all goes back beyond the current Bush administration and the members of congress who were in office over the past 8 years, but it would certainly make me feel better as a start!!

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Greenspan was a major contributer to the mess we're in now so I automatically question his judgment...... but he's still right in this case.

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heh, i wouldnt put it past the old man to try and shave off considerable government spending.

Agreed.

But the keyword is "try".

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Agreed.

But the keyword is "try".

You mean try and pull a Reagan by cutting all the safety net government spending, thereby hurtling the people at the bottom even further behind while accelerating the elimination of the middle class? If these economic policies keep continuing, there will be a vast polarization of the social classes: Rich and Destitute. Sounds like the feudal days...

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Greenspan was a major contributer to the mess we're in now so I automatically question his judgment...... but he's still right in this case.

That's exactly what I was going to write... :)

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