Hopefuls stick to parties' classic economics

DEMOCRAT-GAZETTE PRESS SERVICES

For all the efforts of Sens. John McCain and Barack Obama to portray themselves as willing to break with their parties to get things done, the economic debate that opened their general election campaign this week previews a classic clash. It is a battle between Republican supply-side economics and a Democratic tradition that uses government levers to try to reduce inequality and spur the economy.

McCain, who once opposed the Bush tax cuts, has now made extending those cuts a central plank in his economic plan, which is based largely on the Republican credo that tax reductions stimulate the economy. And he is pushing another strain of fiscal conservatism that has not been much in evidence of late: a call for smaller government and a vow to cut pork-barrel spending.

He often adds a dash of populism, speaking against excessive corporate pay packages Tuesday, and has pushed for a gasoline-tax reprieve. And while McCain has portrayed his tax cuts as benefiting the middle class, most of the benefits would go to those with high incomes and to corporations, including his calls for the elimination of the alternative minimum tax.

Obama often speaks of the traditional liberal goal of trying to redistribute the tax burden to reduce economic inequality, and at least in his public pronouncements has not emphasized the market-friendly, deficit-reduction aspects of the economic approach credited to President Clinton and Treasury Secretary Robert E. Rubin in the 1990s. Obama’s plan would raise taxes on people making more than $250,000 by allowing Bush’s tax cuts on top earners to expire, and he has signaled that he would consider increasing the current cap on income subject tothe Social Security payroll tax.

He has also proposed, for instance, more spending on providing access to health care, which critics say would widen the deficit when coupled with tax cuts.

While McCain asserted in a speech in Washington on Tuesday that under Obama’s tax plan, Americans of every background would see their taxes rise, Obama’s plan calls for cutting taxes on people earning less than $75,000 a year and for eliminating the federal income taxes on the elderly who make less than $50,000 a year.

Overall, the two candidates’ approaches - which come from one candidate who has been described as a maverick, and another who is often called “post-partisan” - each hew pretty closely to his party’s traditional economic playbook. And that is increasingly forming the basis of their attackson one another as each links his opponent to unpopular presidencies.

For instance, Obama and the Democrats have been accusing McCain of running for Bush’s third term by providing tax breaks. McCain shot back Monday, in an interview on NBC News, that Obama seemed to be running for “Jimmy Carter’s second” term by relying on tax-and-spend policies.

But the debates have been colored by an unpredictable dynamic as the economy has worsened, forcing the two candidates to reconsider or recalibrate some of their positions. As the home mortgage crisis deepened this spring, McCain decided that more federal intervention was needed to help homeowners keep their homes than he had previously indicated, and on Tuesday, breaking with the Bush administration, he said he would support extending unemployment benefits.

And the faltering economy led Obama to say in an interview on CNBC this week that he might “possibly defer” some of his tax increases if economic conditions warranted a delay.

VICE PRESIDENT HUNT

Obama is considering former top military leaders among his possible running mates, according to senators who met Tuesdaywith the Democratic presidential candidate’s vice presidential vetting team.

North Dakota Sen. Kent Conrad told The Associated Press that the team asked him about potential candidates from three broad categories - current top elected officials, former top elected officials and former top military leaders.

Conrad would not disclose which names they discussed, and the Obama campaign has been keeping the process a secret.

“We talked about many names,” Conrad said, including “some that are out of the box, but I think would be very well-received by the American people, including former top military leaders.”

A running mate from the military ranks could help address concerns that Obama lacks foreign policy experience and provide a counterpoint to the military experience of the McCain-led Republican ticket.

Obama has a three-person team that includes one-time first daughter Caroline Kennedy, former Deputy Attorney General Eric Holder and Jim Johnson, the former CEO of mortgage lender Fannie Mae, managing the vetting process.

The vetters have been meeting with Democratic lawmakers on Capitol Hill to get their input. Conrad met with Holder and Johnson.

“I sensed from this meeting that they are still very much building the list and at the same time evaluating possibilities,” Conrad said.

Johnson and Holder also met with North Dakota’s other Democratic senator, Byron Dorgan, who confirmed that former military officials were discussed, along with a “good many names” of other potential candidates.

House Majority Leader Steny Hoyer of Maryland also met with Johnson and Holder. He also would not disclose names they discussed.

Many former military leaders have been involved in the 2008 Democratic presidential campaign. Some of Obama’s most prominent campaign advisers have been retired Gen. Tony McPeak, who was Air Force chief of staff during Operation Desert Storm; retired Maj. Gen. Scott Gration, who flew repeated combat missions and has worked with Obama on a range of military issues since before he began his presidential campaign; and Richard Danzig, who was secretary of the Navy under President Clinton.

He might also look at some of former rival Hillary Rodham Clinton’s top military advisers in a gesture of unity, retired generals who include Hugh Shelton, former chairman of the Joint Chiefs of Staff; or Wesley Clark, who led the war in Kosovo and sought the Democratic presidential nomination four years ago. Virginia Sen. Jim Webb, who served as Navy secretary under President Reagan, has also been frequently mentioned as a possible running mate.

NBC News reported that one name being discussed is retired Gen. James Jones, the former NATO Supreme Allied Commander.

SECRET SERVICE EXPENSES

The Secret Service is providing the earliest and most expensive day-to-day protection for the major presidential candidates and their spouses in U.S. history.

By law, candidates are not entitled to Secret Service protection until 120 days before the general election. That would be July 8 this year. But Homeland Security Secretary Michael Chertoff authorized protection for Obama on May 3, 2007 - 15 months before the law required it - in response to a recommendation by the fivemember congressional advisory committee that oversees protection for presidential candidates.

McCain, who initially resisted protection, accepted Secret Service coverage April 27.

The budget for agents to provide protection to presidential candidates has jumped from $65 million in 2004 to $110 million this year - a 69 percent increase.

Information for this article was contributed by Michael Cooper and Larry Rohter of The New York Times, Nedra Pickler and Mary Clare Jalonick of The Associated Press and Stewart M. Powell of the Houston Chronicle.

Front Section, Pages 8 on 06/11/2008

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