McCain comes to Wiegand Gym
Presumptive Republican presidential nominee John McCain laid out his views at Carnegie Mellon last Tuesday morning on the struggling economy and his proposals to turn things around.
Senator McCain (R–Ariz.) noted the university’s prowess in economics and finance as part of his decision to deliver an economic address in Wiegand Gym in the University Center.
Political science professor Kiron Skinner agreed, citing the university’s location as another perk. “McCain needs to have a high profile in Pennsylvania in light of the fact that most of the attention is on the Democratic contenders,” Skinner said.
Senators Hillary Clinton (D–N.Y.) and Barack Obama (D–Ill.) have been campaigning in Pennsylvania for weeks in preparation for the state’s primary this Tuesday. Chelsea Clinton and Michelle Obama both visited Carnegie Mellon recently.McCain didn’t say the economy is in recession; “I leave it for others to speculate on the technical definition of a recession. It’s all a little beside the point, if it’s your plant that’s closing and your job that’s gone,” he said.
But the Senator acknowledged times are tough.
In light of the record foreclosures and the subprime mortgage crisis, McCain proposed that the government back 30-year fixed-rate mortgages for those in danger of losing their homes.
McCain blamed Wall Street for the problems and the credit crunch that has stopped economic growth in its tracks.
“Something is seriously wrong when the American people are left to bear the consequences of reckless corporate conduct, while Mr. Cayne of Bear Stearns, Mr. Mozilo of Countrywide, and others are packed off with another 40 or 50 million for the road,” he said.
Despite comments like these, McCain did not suggest more regulation of the markets.
“In a free market, there must be transparency, accountability, and personal and corporate responsibility. The housing crisis came about because these standards collapsed — and, as President, I intend to restore them,” McCain said.
On taxes, McCain said he would not let Bush’s tax cuts expire, and simultaneously launched an attack on Clinton and Obama, saying that allowing the cuts to expire would result in the largest tax increase since World War II. Responding to charges that Bush’s tax cuts were only for the rich, McCain said seniors, parents, and small business owners would see their taxes increase as well.
In a humorous moment, McCain played on the Democrats’ theme of “change”: “Both promise big ‘change’ — and a trillion dollars in new taxes over the next decade would certainly fit that description.”
Still, Democratic Party Chairman Howard Dean insisted that McCain’s plans did not include enough change.
“As I listened to Senator John McCain’s remarks about the economy this week, I heard more of the same Republican policies that George Bush has brought us for the last eight years,” he said.
At Wiegand, McCain also touted his own “middle-class tax cut,” which he claimed would save 25 million middle-class families over $2000 a year. McCain added that stagnant growth of the middle class’s income coupled with inflation has made everyday life more difficult. To help families, McCain suggested doubling the value of dependents from $3500 to $7000.
Since his speech, McCain’s most talked-about proposal has been his summer “gas-tax holiday,” a way to stimulate the economy by lowering the price of gas through eliminating the gasoline tax from Memorial Day to Labor Day. The idea is that people would have more money left to spend at the beach or amusement park after they had driven there.
On the other hand, money from the gas tax is reinvested into the transportation infrastructure. The American Public Transportation Association wrote on its website, www.apta.com, “The truth is that we need the federal gas tax to pay for the much needed highway and public transportation infrastructure. Do we really want our bridges to fall down? No. Do we want to see bus routes and train lines cut? No.”
Critics of McCain and tax cuts in general say that tax cuts must be followed by cuts in spending. The Bush administration cut taxes, but splurged, resulting in record budget deficits. Trying to distance himself from Bush and woo Republican voters, McCain said, “Somewhere along the way, too many Republicans in Congress became indistinguishable from the big-spending Democrats they used to oppose. The only power of government that could stop them was the power of veto, and it was rarely used.”
McCain vowed to veto bills with earmarks, which are provisions marked for specific projects.
However, these pork-barrel projects (meant to convince certain parties into voting for a bill) are often tacked onto important bills. Thus, McCain wants to be able to veto only parts of a bill, a power called the line-item veto.
After Congress granted former President Bill Clinton that power in 1998, the Supreme Court struck down the line-item veto.
Aside from discussing power in the government, McCain promised “a one-year pause in discretionary spending increases with the necessary exemption of military spending and veteran’s benefits.”
In order to improve the business climate, McCain proposed cutting the business tax from 35 to 25 percent.
“As it is, we have the second-highest tax on business in the industrialized world,” he said. “High tax rates are driving many businesses and jobs overseas — and, of course, our foreign competitors wouldn’t mind if we kept it that way.”
McCain championed free trade and open markets. He also addressed outsourcing, the practice of companies moving operations overseas where costs and wage requirements are lower, resulting in fewer jobs for Americans.
Often, however, free trade has hurt American manufacturing (for instance, Pittsburgh’s steel industry), something McCain admitted. “Change is hard, and while most of us gain, some industries, companies, and workers are left to struggle with very difficult choices,” he said.
For workers who have lost their jobs, McCain wants to retrain them and help them get education and new skills.
“I’ll work with Congress and the states to make job training and unemployment insurance what they should be — a swift path from a job that’s not coming back to a job that won’t go away,” he said.