Doug Holtz-Eakin, McCain's top policy advisor, has the unenviable task of selling policies and proposals that only years before, at the Congressional Budget Office, he knew were incomplete, incoherent, or wrong. This economic advisor is a casualty of McCain's war of attrition to convince the ultra-right wing of his party that they should vote for him. Fiscal conservatism and common sense have gone out the window, along with the old Holtz-Eakin's opinions on budgeting.
Holtz-Eakin Wants More Time to Square 'McCainomics' Math and Find Loopholes. McCain's top economic advisor, "Mr. Holtz-Eakin says the mistake that people are making is treating the McCain platform as if it were a finished piece of work. 'It's April,' he said. 'We have until November.' The campaign will later unveil 'base broadeners' in the corporate tax code -- that is, loopholes it will eliminate -- that will pay for the faster investment write-offs, for example." [1]
Holtz-Eakin Misrepresented Potential Savings From Closing Tax Loopholes. Douglas Holtz-Eakin, a major economic advisor for McCain, said $30 billion could be saved per year by cutting "rifle shot" provisions, like tax breaks for small insurance companies. "A Treasury Department report Holtz-Eakin cited as the source of his estimate states $27 billion could be raised by eliminating narrowly used tax preferences spread over a decade, not a single year" [2]
Holtz-Eakin Refused to Detail McCain's Spending Cuts. Challenging the estimated costs of McCain's proposed tax cuts on a conference call with reporters, Mr. Holtz-Eakin, an advisor, said that the $5.7 trillion dollar price tag didn't factor in spending cuts outlined by McCain. However, "when reporters on a conference call [in April of 2008] asked McCain's advisers to detail all of their cost and savings estimates for his economic plan in writing, they refused." [3]
But He Still Insists "McCain Will Bring The Budget To Balance By The End Of His First Term." On a conference call, Senator McCain's economic advisor, former CBO head Douglas Holtz-Eakin, said that "Senator McCain's proposals, combined tax and spending initiatives, will bring the budget to balance by the end of his first term in 2013 and maintain balance or surplus thereafter." [4]
Holtz-Eakin's Own Study Contradicts Campaign Assertion That Tax Cuts Will Pay For Themselves. [McCain's] campaign asserts that his call to extend the tax cuts for everyone and reduce corporate tax rates will stimulate economic growth and maintain a healthy level of tax revenue. But studies - including one by Holtz-Eakin in his capacity as Congressional Budget Office director in 2005 - suggest that tax cuts don't pay for themselves over time." [5]
FLASHBACK: Holtz-Eakin Thought Same Tax Cut Logic Was "Overblow." Upon leaving the Bush Administration, McCain's economic advisor Douglas Holtz-Eakin assumed the post as director of the Congressional Budget Office, pleasing Republicans and scaring Democrats when he adopted a supply-side perspective in analyzing the effects of tax cuts on government revenues. However, upon taking the post, "what the budget office found," under Holtz-Eakin, "as study after study has shown, was that any new revenue that tax cuts brought in paled in comparison with their cost. This is why the deficit jumped under the last two tax-cutting presidents (Ronald Reagan and George W. Bush) and fell under the last two tax-raising presidents (George H. W. Bush and Bill Clinton)." Holtz-Eakin said to Congress in 2003 that the impact of the supply-side method of analyzing the cost of a tax cut, favored by Republicans, known as "dynamic analysis" had been "overblown," according to the New York Times. [6]
As McCain's campaign maintained a price tag of somewhere between $3 billion and $10 billion for his recently-revealed HOME Program, purportedly assisting somewhere between 200,000 and 400,000 homeowners, a top economic advisor for the campaign said in an interview on CNBC that McCain's plan would be as large "as it needed to be." Douglas Holtz-Eakin was asked how "wide in scope" the McCain plan would be and said, "If you're in a home and you feel that you need some assistance to keep an underwater mortgage going, you apply." [7]
Reality: McCain Campaign Claims The Program Would Help 400,000 Homeowners. The McCain campaign maintains that the HOME Plan will have a price tag of somewhere between $3 billion and $10 billion and purportedly assist somewhere between 200,000 and 400,000 homeowners. [8]
Douglas Holtz-Eakin downplayed the immediacy of tighter regulation on financial markets in March of 2008, saying, "Certainly, John McCain is interested in a 21st-century financial regulation system. But he always said we don't want to do things now that harm us in the future, so let's step back, study this problem carefully and move the ball forward." [9]
IRONY: Holtz-Eakin Criticized Democrats For Being "Short On Specifics" on Housing Crisis. "[The Democrats'] instincts are beginning to match their liberal records. And what we see in each case is a, sort of, run the same playbook again and again approach to these problems, largely short on specifics, but when there is specifics, it's usually the money they're going to take out of the taxpayer's pocket and transfer in some not very well specified way." [10]
With Holtz-Eakin as the top policy advisor, McCain's campaign only presented a mortgage crisis plan after being lampooned for their lack of attention to the problem. "In a speech late last month on the topic, McCain said he would evaluate new proposals based on the principle that it 'is not the duty of government to bail out and reward those who act irresponsibly,' but he offered no concrete solutions. After facing criticism for not addressing the problem, McCain issued an unusual statement that same week reiterating that he would consider proposals. But he only called on private lending institutions to help homeowners." [11]