Bonus Moment: The Stupid (and the) Economy

Wondering what St. John McCain's economic policy is? You wouldn't be alone - since the media is having too much fun trying to figure out how Senator Bulletproof can stay in the Democratic Nomination race.

Unhappily for St. John, the Wall Street Journal doesn't give a rats ass about the Democrats - and some people who do - do read it once in a while.

Social Security

First some turkee for the Baby-Boomers and elderly who love Hillary so much, they'd supposedly rather vote for McCain than Senator Obama:

Mr. McCain's chief economic aide, Douglas Holtz-Eakin, a former head of the Congressional Budget Office, says economic circumstances forced changes concerning Social Security policy. Vast budget surpluses projected in 2000 evaporated with a recession, the Bush tax cuts and the cost of responding to Sept. 11.

As a result, the McCain campaign says the candidate intends to keep Social Security solvent by reducing the growth in benefits over the coming decades to match projected growth in payroll tax revenues. Among the options are extending the retirement age to 68 and reducing cost-of-living adjustments, but the campaign hasn't made any final decisions.

"You can't keep promises made to retirees," says Mr. Holtz-Eakin, referring to the level of benefits the government is supposed to pay future retirees. "But you can pay future retirees more than current retirees."

Asked about the apparent change in position in the interview, Sen. McCain said he hadn't made one. "I'm totally in favor of personal savings accounts," he says. When reminded that his Web site says something different, he says he will change the Web site. "As part of Social Security reform, I believe that private savings accounts are a part of it -- along the lines that President Bush proposed."

Or, rape and pillage Social Security to pay for more tax cuts, and do a bait-and-switch to private savings accounts (also to pay for more tax cuts) held in Treasury bonds by the Bush-led McCain-led government.

Taxes

Ah yes, as if we need more debt and more tax breaks for the wealthy. All those yachts provide so much stimulus to the economy, don't they:

On taxes, Sen. McCain is walking a fine line between courting keep-taxes-low Republicans while insisting he is the candidate of fiscal discipline. Two weeks ago, ABC's George Stephanopoulos asked him on "This Week" if he were a "'read my lips' candidate, no new taxes, no matter what?" referring to a pledge made by President George H.W. Bush, which he later broke. "No new taxes," Sen. McCain responded. "But under circumstances would you increase taxes?" Mr. Stephanopoulos continued. "No," Sen. McCain answered.

Asked in The Wall Street Journal interview to clarify, Sen. McCain softened that stance. "I'm not making a 'read my lips' statement, in that I will not raise taxes," he says. "But I'm not saying I can envision a scenario where I would, OK?"

Behind the scenes, his campaign is searching for ways to pay for Sen. McCain's tax proposals. In addition to extending the Bush tax cuts, the 71-year-old candidate would slash the corporate income-tax rate from 35% to 25% at a cost to the Treasury of $100 billion a year, estimates Mr. Holtz-Eakin.

In all, his tax-cutting proposals could cost about $400 billion a year, according to estimates of the impact of different tax cuts by CBO and the McCain campaign. The cost will make it difficult for him to achieve his goal of balancing the budget by the end of his first term.

To pay for the cut in corporate tax rates, Sen. McCain is considering eliminating some corporate tax breaks listed by a bipartisan tax reform panel appointed by President Bush, who ignored its report. The panel outlined different ways to change the tax code to spur U.S. competitiveness.

Among the candidates for elimination are a 2004 break for manufacturers -- written so broadly that it includes computer software makers, construction firms and architects -- a low-income housing credit, and tax breaks for life-insurance companies, credit unions and exporters. Undoing those breaks would raise a maximum of around $45 billion a year, still leaving a big hole.

Similar holes appear concerning the supposed savings from eliminating the ever-evil and ever-present "earmarks" St. John has supposedly crusaded against.

Industry and Regulation

The Straight-Talk Express drove into a ditch a significant amount of time before the Vicki Iseman affair (by "affair" I mean a financial, not sexual, one) - it just took a major-news outfit made up of Republicans to report it - which is so very sad:

Another question is how Sen. McCain would regulate business. He has fought with the drug industry to allow the importation of pharmaceuticals from Canada and permit the government to negotiate over drug pricing; tangled with broadcasters to force them to hand over transmission channels so they can be used by police and fire departments and other users; and taken on the airline industry over a consumer-rights bill, among other slugfests.

But some lobbyists in industries he has targeted are sanguine, figuring Sen. McCain won't focus much on issues such as drug importation once he has a bigger stage. One member of Sen. McCain's health-care task force, which endorsed drug importation, was a former McCain aide, Sonya Sotak, who lobbies against drug importation in her day job as an Eli Lilly lobbyist. "I don't impose my professional views on the senator," she says.

During his years at the Commerce Committee, Sen. McCain became the focus of lobbying from the telecommunications and health-care industries, given his focus on those fields. Now, health professionals, lobbyists, and individuals in the computer, television and movie industries are among his largest industry contributors, says the nonpartisan Center for Responsive Politics.

The law firm of Philadelphia-based Blank Rome LLP, which lobbies for cable company Comcast Corp. and drug company Abbott Laboratories, among others, is among Sen. McCain's largest contributors. The firm's employees have donated $188,000 to him, according to the center.

And catch this little tidbit Clintonites:

"My desire to support McCain has nothing to do with any client of my law firm," says David Girard diCarlo, the firm's chairman. Former Democratic vice presidential candidate Geraldine Ferraro, who backs Sen. Clinton, is a senior official at Blank Rome, which has raised $113,000 for the Democratic presidential candidate.

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