McCain’s economic do-over

MCCAIN’S ECONOMIC DO-OVER…. After a series of duds, the McCain campaign came up with a “Homeowner Resurgence Plan” last week, which was arguably the biggest policy fiasco McCain has had in months. It led the campaign to look for a “do-over” on economic policy in the middle of a financial crisis.

After some humiliating fits and starts, McCain actually presented a new proposal this morning.

Senator John McCain unveiled $52.5 billion in new economic proposals on Tuesday aimed at easing financial distress on the nation’s seniors, workers and the unemployed.

Mr. McCain said he would propose that people 59 years and older who withdraw money from IRAs or 401(k) retirement plans in 2009 and 2010 pay a tax rate of 10 per cent on the money rather than their higher normal tax rates. The plan would cost $36 billion, based on McCain campaign internal estimates, according to Douglas Holtz-Eakin, Mr. McCain’s chief economic adviser.

In addition, Mr. McCain proposed a reduction in the tax on long-term capital gains to 7.5 percent from 15 percent in 2009 and 2010 at an estimated cost of $10 billion, an acceleration in the tax write-off for stock losses, allowing Americans to deduct $15,000 in losses a year for the tax years 2008 and 2009 (current rules allow deductions for up to $3,000 in losses), and a suspension on the tax on unemployment insurance benefits in 2008 and 2009.

Even if we put aside the striking disarray that led to today’s announcement, this was hardly worth waiting for. Some of McCain’s latest plan, including the retirement proposal and not taxing unemployment benefits, is similar to what Obama said yesterday. The rest is a regressive tax cut that primarily helps millionaires, and a capital gains tax cut that, as a practical matter, is “a lousy stimulus.”

Is this really supposed to improve McCain’s footing on economic issues? It seems unlikely to have any real impact.

Washington Monthly - Donate today and your gift will be doubled!

Support Nonprofit Journalism

If you enjoyed this article, consider making a donation to help us produce more like it. The Washington Monthly was founded in 1969 to tell the stories of how government really works—and how to make it work better. Fifty years later, the need for incisive analysis and new, progressive policy ideas is clearer than ever. As a nonprofit, we rely on support from readers like you.

Yes, I’ll make a donation

Steve Benen

Steve Benen is a producer at MSNBC's The Rachel Maddow Show. He was the principal contributor to the Washington Monthly's Political Animal blog from August 2008 until January 2012.