McCain and the Economy- What's his plan?

[Neil D]

Strategists: McCain must hammer on economy

By DAVID PAUL KUHN | 10/13/08 4:53 AM EDT

John McCain must demonstrate unwavering focus on the economy and a sharp break from the Bush administration's economic policy.

Top Republican strategists believe John McCain’s stalled presidential campaign can only be revived if the Arizona senator takes an immediate and decisive turn in direction, one marked by an almost unwavering focus on the economy and a sharp break from Bush administration economic policy.

While Barack Obama’s past associations with controversial figures such as former radical William Ayers should be a part of McCain's closing argument, they say, the GOP nominee needs to primarily concentrate on the historic nature of the current economic crisis and explain why he is better suited to lead the country out of it.

“Either McCain wins the argument over the economy or he loses,” said Newt Gingrich, the former Republican Speaker of the House. “When the economy is this central to everybody’s life, when everybody is as worried as they are now, then when you are not talking about the economy you are not winning.”

“Can he come back? I think he can. But time is running very short. I would give it about a week, at the most, to turn this around,” said John Weaver, McCain’s former top strategist. “We are speaking in angry Greek and the public wants to hear economic English.

“If we think we can make the public care about William Ayers or some other things when they are afraid of losing their jobs, not being able to pay for college or work ten more years because they are worried about their retirements, we are kidding ourselves,” Weaver continued.

Whit Ayers, a longtime Republican pollster, was equally direct. “It's hard to imagine the voters thinking about anything else when the Dow Jones is dropping 500 points a day,” he said.

As much as anything else, several strategists said, McCain needs to put more distance between himself and the Bush administration’s economic policy.

“The meta frame should have been every mistake George Bush made [barack Obama] wants to continue,” said Grover Norquist, a prominent conservative anti-tax activist.

Norquist added that McCain must liken Obama to a sequel of Bush’s domestic blunders, “more earmarks and more spending” and then return to the promise to “reform Washington.”

Gingrich agreed, arguing that McCain must acknowledge that “the Bush-Paulson strategy clearly failed,” referring to Treasury Secretary Henry Paulson’s stewardship of a $700 billion bailout package that has thus far failed to stabilize the financial markets.

McCain should explain that “Obama is worse” for the economy than even President Bush, said Gingrich, and then offer “what he can do” in a “bold and dramatic” framework. An example, Gingrich added, would be to propose a temporary moratorium on the capital gains tax.

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[Neil D]

Here is is folks, McCain's economic plan...To be honest, I see something for seniors, and for those of you with lots of stocks....but for most Middle class people...I don't see much....do you?

John McCain unveils new economic measures

BLUE BELL, Pa. -- Eager to show his understanding of Americans' economic distress, Republican John McCain unveiled new economic prescriptions today that include slashing the tax rate on capital gains in half and helping seniors grappling with shrinking retirement accounts.

The new slate of proposals comes just three weeks before the election and on the eve of the final presidential debate between the Arizona senator and his Democratic opponent Barack Obama at Hofstra University in Hempstead, N.Y. They are part of McCain's effort to right his campaign and regain voters' trust in his handling of the economy, an area in which more voters favor his opponent. He also must convince voters that he does not represent a continuation of the Bush administration's policies.

"If I am elected president, I will help to create jobs for Americans in the most effective way a president can do this: with tax cuts that are directly specifically to create jobs and protect your life savings," he told a cheering crowd gathered in the gymnasium of a community college in Montgomery County.

"When I leave office I can promise you that this nation will not be on the same path as it is today. I will not play along with the same Washington games and gimmicks that got us into this terrible mess in the first place. I am going to Washington to fight for you."

McCain's standing in the race has been damaged by the nation's economic troubles, and there was new evidence of that trend in polls this morning from Quinnipiac University. Obama is now leading McCain in Colorado, Michigan, Minnesota and Wisconsin by significant margins, according to the poll conducted for the Wall Street Journal and WashingtonPost.com.

In the Philadelphia suburb of Blue Bell, McCain called for reducing the maximum tax rate on long-term capital gains by half from 15% to 7.5% in 2009 and 2010 -- a proposal his campaign hopes would restore liquidity to the markets.

Assailing Obama's proposal, which the Illinois Senator introduced Monday, to suspend penalties on withdrawals of up to $10,000 from 401k accounts through 2009, McCain said it would encourage early withdrawals. "This is an invitation to capital flight and therefore to continued instability in the market, at a moment when exactly the opposite is needed."

In a measure aimed at seniors, he called for lowering the tax rates on withdrawals from IRA and 401k accounts to 10%, the lowest rate, this year and next year. His campaign estimated that the proposal -- which would apply to the first $50,000 withdrawn -- would give some 9 million people more flexibility with their retirement funds.

"Retirees have suffered enough and need relief, and the surest relief is to let them keep more of their own savings," McCain said as the crowd applauded and a woman yelled "that's right!"

He argued his capital gains tax reduction on stocks held more than a year -- which drew a far bigger cheer from the crowd than his plan to use $300 billion buying up bad mortgages -- "will promote buying, raise asset values, help companies and shore up the pension plans for workers and retirees."

Overall, McCain argued, as he has before, that "it will not be enough for the federal government to correct the excesses of Wall Street without reforming its own reckless practices."

Promising to "rein in" spending in Washington that he calls "out of control," the senator renewed his call for a one-year freeze on most government spending and promised to "veto the pork barrel special interest projects that are wasting your tax dollars, driving up our debt and weakening our dollar."

The Obama campaign quickly responded, criticizing the McCain plan for ignoring the middle class.

"John McCain's latest gambit is a day late and 101 million middle-class families short," said Obama-Biden campaign spokesman Bill Burton. "McCain's plan would spend $300 billion to bailout the same irresponsible Wall Street banks that got us into this mess without doing anything to help jump-start job growth for America's middle class. His plan continues to provide no tax relief at all to 101 million hardworking families, including 97% of senior citizens, and it does nothing to cut taxes for small businesses or give them access to credit."

Burton also argued that McCain's proposal to lower the capital gains tax "in a year in which people don't have an awful lot of capital gains," shows "how little he understands the economy."

McCain's economic advisor Douglas Holtz-Eakin said the new package's price tag would be $52.5 billion over two years.

McCain has already called for suspending rules that require investors to sell their stocks at age 70 1/2 -- to avoid forcing them to sell in the midst of a financial crisis, when their assets may be worth less.

The new measures McCain talked about today would build on his recent proposal to use $300 billion of the government's $700-billion rescue package to buy up bad mortgages, resetting the terms more favorably for struggling homeowners. Obama castigated that proposal as a bailout for irresponsible lenders.

On Monday in Toledo, Obama outlined his own $60-billion package that included new tax credits for companies that create full-time jobs, a 90-day moratorium on home foreclosures and a relaxation of rules that would allow families to withdraw up to $10,000 from their retirement savings without penalty.

According to the new polls, Obama is leading McCain by 9 percentage points in Colorado and by 11 points in Minnesota. In Michigan, where McCain recently announced he would pull out to focus on other battleground states, Obama leads McCain 54% to 38%. In Wisconsin, where McCain campaigned last week, Obama edges McCain 51% to 37% in polling conducted after their second debate.