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April 18, 2008

John McCain on "Political Capital w/Al Hunt"

Bloomberg

AL HUNT: We begin our program with Senator John McCain, the presumptive Republican nominee for present. Senator, thank you for joining us.

JOHN MCCAIN (R-AZ): Thanks, Al. I thank you for presumptive. I always love that phrase.

MR. HUNT: Senator, you and President Bush have had some big differences on issues like climate change and torture. But with your economic proposals this week featuring huge tax cuts, Republicans like Grover Norquist say on economics, you are now a George W. Bush Republican.

SEN. MCCAIN: I would disagree on one fundamental aspect the difference between myself and President Bush and that is spending. I think one of the major factors in getting into the economic difficulties - and they are severe - one of them is obviously letting spending out of - get out of control, the deficit increases. We have to borrow money from China. The dollar weakens.

The out-of-control spending - we Republicans, we Republicans presided over the largest increase in the size of government since the great society.

MR. HUNT: Would you agree -

SEN. MCCAIN: I urged them to veto these bills. Of course I'm for lower taxes. Of course I'm for the kind of conservative economic philosophy articulated by Milton Friedman and many others that I admire. But the spending, that's like saying you agree with somebody in everything but - you see what I mean - because spending restraint has got to be a part of any economic package if you're going to cut taxes.

MR. HUNT: Well, you have been a long-time champion of - let me read you what the head of the Concord Coalition, which is a basically Republican-oriented group, which has actually been associated with you, say when he looked at your economic plan, he said the problem is there is - and I'm quoting him - "a huge imbalance and that your tax cuts are specific and large, but the spending cuts are," quote, "small and vague." That is the Concord Coalition.

SEN. MCCAIN: Well, and I respect that and I respect the view of people who basically think that the status quo is satisfactory today. I don't. I think Americans are hurting and hurting badly. In fact, I think Americans are not better off than they were eight years ago when you look at what has happened to middle-income Americans. Look, I can find for the Concord Coalition $100 billion tomorrow, $35 billion in two big spending bills that the president signed into law, $35 billion pork barrel projects, another $65 billion in previous years -

MR. HUNT: And you get to 3.3 trillion - no, that is what your tax cuts are.

SEN. MCCAIN: We can get to - we can get a whole lot there. But right now in my view - and by the way, it's not - I don't agree with that number.

MR. HUNT: (Inaudible, cross talk) - tax cuts.

SEN. MCCAIN: If you're talking about 10 years - so I think I can save in one year $100 billion. I can save all kinds of money on Defense procurement reform. And by the way, I want the wealthy people like me and possibly like you to pay for their own prescription drugs, to pay for their own prescription drugs.

MR. HUNT: Well, you -

SEN. MCCAIN: I want Americans

MR. HUNT: said Americans - Warren Buffet. You cited Warren Buffet. He would pay for it.

SEN. MCCAIN: Anybody.

MR. HUNT: But Warren Buffet would go with - under that proposal would pay a couple of hundred bucks more for Medicare, probably a very good idea.

SEN. MCCAIN: Mm-hmm.

MR. HUNT: But he would get back multimillions in tax cuts. Buffet who says it's outrageous that he pays a lower tax rate than his secretary.

SEN. MCCAIN: Well, let's look at one aspect of Warren Buffet's great wealth due to his great genius and one graded the most respected person in America - capital gains taxes. Every time in history that we reduced capital gains taxes, there has been an increase in revenue going back to Jack Kennedy. So for Senator Obama to say that he wants to increase capital gains taxes obviously means he doesn't understand economics because -

MR. HUNT: But we did that under Ronald Reagan and revenues went up.

SEN. MCCAIN: And revenues - every time we have cut capital gains in recent history -

MR. HUNT: But didn't they go up when -

SEN. MCCAIN: - revenues have gone up.

MR. HUNT: But didn't they go up when Reagan increased capital gains taxes?

SEN. MCCAIN: Not to my knowledge, but I know -

MR. HUNT: After the '86 bill?

SEN. MCCAIN: After the '86 bill there was a whole package of things that happened so I'm not sure you sort them out. But I can point out from going back to Jack Kennedy, every time you cut capital gains taxes, revenues have gone up. And so why would you want to raise capital gains taxes? Why would you want to increase the cap on Social Security taxes so that, now, millions and millions of Americans would be included in them?

But back to capital gains one second - there's 100 million Americans that have an investment someway or another in the stock market. So now we're going to increase the taxes and decrease the income of 100 million Americans? That doesn't make any sense.

MR. HUNT: But you also said the Bush tax cuts were too tilted to the rich. You said that several times. Does that still worry you?

SEN. MCCAIN: Yes. And that's why I want us to have an increase from $3500 to 7,000; it's a tax exemption for every child in America. I don't think that's for the very rich. In fact, I think they have fewer children.

I'd like to close every loophole for the sugar industry, for the ethanol industry, for the gas and oil industry. There's a whole lot of -

MR. HUNT: So there are more specific tax loopholes closing that you will propose as you go on?

SEN. MCCAIN: Sure. But the fundamental belief on my part is - and that is that if you overtax Americans, it has a devastating effect on America's economy. And right now Americans are hurting.

MR. HUNT: You told Stephen Moore of the Wall Street Journal several years ago that you didn't know as much about economics as foreign policy and you still need to be educated, you said, with an ongoing process. Is that process complete now?

SEN. MCCAIN: Oh, yeah. Yeah. Listen, I understand economics. One reason is because they really are based on fundamental values and philosophy. The second thing is, of course I have spent years on these issues. And I guess that I think that I base my economic policies on my history, my experience, and knowledge. Senator Obama wants to raise the capital gains tax and wants to lift the cap. You lift the cap on Social Security taxes and you are now pulling in policemen who they and their wives file a joint tax return. You're going to pull in all kinds of people into paying higher taxes. That's affecting middle-income Americans.

MR. HUNT: Final question - you mentioned tax returns. On Friday, you released your tax returns, but not your wife's, who is a wealthy woman. Now, Hillary Clinton released Bill Clinton's tax returns. Four years ago, John Kerry released Theresa Heinz' returns to avoid being accused of hiding any wealth. Will you release your wife's returns before this election is over?

SEN. MCCAIN: I never have, Al, because my wife and I - we have separate incomes, we have a prenuptial agreement, and her business is her business. I have never been involved in it since before I ran for the Congress of the United States and so I just feel that she has a right to a separate tax return.

MR. HUNT: Could you personify transparency? And don't you think if you're running for president with different rules, don't you think Americans should know as much about the McCain family wealth as they do about the Obamas or the Clintons?

SEN. MCCAIN: I think they would respect the fact that my wife has her own business and her own life. But I understand your comment and I appreciate it.

MR. HUNT: Senator John McCain, thank you.

SEN. MCCAIN: Thanks for having me on.

MR. HUNT: Thanks for being with us here. When we come back, we'll talk about a new global crisis: soaring food prices.

(END)

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