McCain Reverts to Balanced Budget Pledge

PHOENIX – Senator John McCain is pledging once again to balance the budget by the end of his first term in 2013, his advisers said Monday, reverting to an earlier pledge he had abandoned in April when he proposed a series of costly tax cuts for corporations and high earners and said it might take two terms to balance the budget.

It is unclear how Mr. McCain plans to balance the budget, given that fiscal analysts who have examined his economic plans say that his calls to extend the Bush tax cuts while cutting corporate and other taxes would likely increase the deficit.

Mr. McCain plans to talk about the economy – which has eclipsed Iraq and terrorism in polls of voter concerns – all week.

In February, Mr. McCain had proposed balancing the budget by the end of his first term as president. But when he announced a series of tax cuts in April, he said that he would balance the budget within eight years. He said then that “economic conditions are reversed,” making it difficult to balance the budget earlier.

But now the McCain campaign is pledging once again to balance the budget by the end of the first term of a McCain presidency. Mr. McCain’s senior policy adviser, Douglas Holtz-Eakin, said in a conference call Monday morning that his “plan is to balance the budget by the end of his first term in 2013.’’

There has long been a battle between the supply-sider, tax-cutting contingent of Mr. McCain’s economic advisers and the deficit-hawk, budget-balancing contingent. In April, it appeared that the supply-siders had won, but since then there have been some indications that Mr. McCain is scaling back some of the tax cuts he proposed then.

In April Mr. McCain called for completely abolishing the alternative minimum tax, a tax that was designed to make sure that rich people who claim many tax deductions still pay their fare share of taxes, but which over the years has snared more middle-class taxpayers.

But this spring when his campaign briefed the Tax Policy Center, a think tank that evaluated his proposals, they indicated that he would not abolish the tax, but rather amend it to spare middle class taxpayers – closer to what Congress now does.

Similarly, the McCain campaign has suggested that its proposal to let corporations write off their equipment expenses more quickly would be phased out after a few years — which would shrink its overall cost.

To pay for his tax cuts, the McCain campaign has called for cutting pork-barrel spending and making entitlements less expensive, but fiscal analysts have questioned whether he could save enough money that way to pay for the tax cuts, and cautioned that the spending cut proposals were far vaguer than the tax cut proposals.

Later today in Colorado, he plans to use a comfy and colorful example to explain why he supports free trade.

“Five years ago, the outdoor footwear company, Crocs, was started by a couple of entrepreneurs with a great idea, ingenuity and drive,’’ he plans to say, according to excerpts of his speech. “This former small business now employs 600 people in Colorado alone, and sells over 50 percent of its products in 90 countries around the world. Building barriers to Crocs or any American company’s access to foreign markets will have a devastating effect on our economy and jobs, and the prosperity of American families.’