John McCain, Generational Thief
In the months since their bitter contest last fall, Barack Obama time and again reached his hand out to former rival John McCain, only to get slapped in the face for his troubles. Within days of Obama's pre-inauguration dinner honoring the Arizona Senator, McCain decried the President's supposed lack of bipartisanship on the $787 billion stimulus bill, a package he continues to denounce as "generational theft." As it turns out, of course, it is John McCain who has long supported dangerous tax cuts and emptying the U.S. Treasury for future generations. And to be sure, if American voters hadn't busted him at the polls in November, he'd be a repeat offender.
It wasn't always this way. Congressman McCain the self-described "foot soldier in the Reagan revolution" arrived at the Capitol in 1983. That was one year after the passage of the massive Reagan tax cuts, cuts which subsequently produced record-setting deficits. (During his own campaign last fall, McCain conveniently forgot that Reagan was forced to raise tax rates twice to help stem the flow of red ink he had produced.) And in 2001 and again in 2003, Senator McCain voted against George W. Bush's irresponsible and regressive plan to slash taxes for the wealthiest Americans who needed them least. In June 2001, the so-called deficit hawk sounded more like Ted Kennedy in balking at Bush's $1.4 trillion give-away to America's rich and famous:
"I cannot in good conscience support a tax cut in which so many of the benefits go to the most fortunate among us at the expense of middle-class Americans who need tax relief."
Alas, that was before McCain ramped up his second run for the White House and with it, began a born-again embrace of supply-side orthodoxy targeting Republican primary voters.
McCain didn't merely reverse course in 2004 and call for the Bush tax cuts to be made permanent. Drinking the supply-side Kool Aid, McCain by 2006 was proclaiming (wrongly, of course) that "tax cuts, starting with Kennedy, as we all know, increase revenues." And by the kick-off of campaign 2008, McCain declared, again mistakenly, that the major tax cuts passed in 2001 and 2003 have "increased revenues."
But it was McCain's own 2008 tax proposals which would have constituted a raid on the federal treasury that would in comparison have made George W. Bush look like a pickpocket. As a study by the Center for American Progress revealed last March, McCain was proposing a $2 trillion IOU for America's children and grandchildren:
Our analysis suggests that the McCain plan shares five key characteristics of Bush policies. First, it is enormously expensive, costing more than $2 trillion over the next decade and essentially doubling the Bush tax cuts. Second, the McCain plan would predominantly benefit the most fortunate taxpayers, offering two new massive tax cuts for corporations and delivering 58 percent of its benefits to the top 1 percent of taxpayers. The Bush tax cuts provide 31 percent of their benefits to the top 1 percent of taxpayers.
Third, the McCain tax plan continues the shift of the tax burden from investment income onto earned income. Fourth, the plan not only fails to address current tax shelter problems in the tax code but in fact will lead to increased sheltering. Fifth, McCain cannot pay for his tax cuts without massive reductions in Social Security, Medicare, or other key programs that benefit the vast majority of Americans.
Then as Wall Street teetered on the brink of collapse last fall, McCain doubled-down on his bet. In October, McCain proposed a halving of the capital gains tax rate from 15% to 7.5%, a cut providing almost 60% of its benefits to families earning over $1 million a year. As ThinkProgress detailed, that $10 billion McCain budget-buster would again have gone to those families who needed it least:
Households earning less than $50,000 a year collected a mere 2.5 percent of capital gains in 2005, according to the Tax Policy Center. Families earning more than $1 million a year collected 59 percent of capital gains. Moreover, most middle-class families with capital gains hold their investments in retirement accounts shielded against capital gains taxes.
As ThinkProgress also pointed out, taxpayers "making $1 million or more would get two-thirds of the benefit, and an average tax cut of more than $72,000," while "those making less than $50,000 would get, on average, nothing." Among the former, of course, were Cindy and John McCain. Had he won, McCain and his beer heiress wife would have walked off with another $55,000 capital gains windfall on top of the $373,000 they would have pocketed from making the Bush tax cuts permanent. And that manna from heaven didn't include hundreds of thousands more from Cindy's proceeds from the acquisition of her Anheuser-Busch stock by Belgian beverage firm InBev.
Still, even with his overwhelming rejection by the American electorate, John McCain even in defeat wants to gut the budget for years to come. McCain in February proposed an all tax cut alternative to the Democratic stimulus package that would have produced rivers of red ink for as far as the eye can see. And as Paul Krugman noted, McCain then joined with the "Crazy 36" Senate Republicans in supporting the Demint amendment, a gambit which:
"Would have replaced $800 billion of stimulus with $3.1 trillion of non-stimulative tax cuts. These, by the way, are the same people now accusing Obama of engaging in 'generational theft.'"
And so it goes. After claiming President Obama is off to a "bad beginning," John McCain offered this advice, "Let's start over now and sit down together." For their part, Democrats grouse that John McCain "has gone from being an angry old candidate to being an angry old defeated candidate."
Of course, you'd be "bitter and angry," too, if you twice admitted to not knowing much about the economy, thought the recession was "psychological" and even as Wall Street imploded announced, "the fundamentals of our economy are strong."
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