Originally published Thursday, July 17, 2008 at 12:00 AM
Election 2008
Voters want solutions; do candidates have them?
The economy is deteriorating so quickly and dramatically that it threatens to overtake many proposals the presidential candidates have been...
The Associated Press
WASHINGTON — The economy is deteriorating so quickly and dramatically that it threatens to overtake many proposals the presidential candidates have been offering for months.
Democrat Barack Obama and Republican John McCain are suggesting tax, spending and regulatory plans in response to soaring gasoline prices, a home-lending crisis and other woes hitting consumers. But it is far from clear that their ideas can seriously improve matters or even pay for themselves without expanding the deficit, as the candidates claim.
A year ago, the Iraq war and terrorism dominated the campaign, and that was reflected in candidates' rhetoric and poll results. Obama's opposition to the war helped propel him to the Democratic nomination, while McCain's national-security credentials swayed some GOP voters.
The landscape has shifted. New problems are cropping up almost daily, and voters will be demanding answers.
"I don't think either candidate has really spelled out how they would get us out of the mess we're in," said Rea Hederman Jr., who tracks the economy and campaign for the conservative Heritage Foundation.
Inflation has rarely been mentioned in the presidential contest, but that seems likely to change soon. The government reported Wednesday that consumer prices rose in June at the second-fastest pace in 26 years.
Polls show voters are clearly more concerned about the economy and gas prices than about the Iraq war and national security. McCain and Obama undoubtedly will return to these issues and offer new proposals, but perhaps the voters' chief question should be: Can they really help?
"The president doesn't have that much impact on the short-run fluctuations of the economy," said Alan Viard, an economist at the right-of-center American Enterprise Institute. The candidates will continue to talk about plans to help ease Americans' pain, he said, but voters should be wary.
For example, Viard said, McCain's proposal to temporarily suspend the federal tax on gasoline would do little more than encourage people to keep driving instead of conserving fuel. Obama has called McCain's plan a gimmick.
An Associated Press-Yahoo News poll conducted in June found that voters give Obama a slight edge over McCain in handling economic matters.
Democrats love to note McCain said in December, "the issue of economics is not something I've understood as well as I should."
The candidates offer fundamentally different approaches. McCain wants to cut taxes at most income levels, although high earners would reap the biggest benefits. Obama would raise taxes on the wealthy and pour more spending into subsidies of education, health care and other programs.
![]()
Obama says his programs would be paid for with tax increases or other savings. McCain says he would balance the federal budget by 2013. Economists are skeptical of both claims.
The candidates' specific non-health tax proposals would reduce tax revenues by $3.6 trillion in McCain's case, and $2.7 trillion in Obama's, over the next 10 years, says the Tax Policy Institute, a joint venture of the liberal-leaning Brookings Institution and Urban Institute.
"Including interest, the tax cuts would increase the national debt by $4.3 trillion [McCain] or $3.3 trillion [Obama] by the end of 2018," the institute said.
The candidates diverge on tax policies. McCain would continue President Bush's first-term tax cuts (which he initially opposed); increase the tax exemption for those with dependents; reduce the corporate income tax; exempt the great majority of estates from the estate tax; and eliminate the gas tax for this summer.
Obama would end the Bush tax cuts for high earners; eliminate income taxes for elderly people making less than $50,000 a year; reduce taxes on people making less than $75,000 a year; keep the estate tax on estates worth more than $3.5 million; and raise the capital-gains tax.
Obama calls for a "second stimulus" package of tax rebates amounting to less than a third of the $168 billion package approved last year. McCain says he would consider a stimulus package.
Copyright © 2008 The Seattle Times Company
A Bing deal for Microsoft, News Corp.?
Amazon, Wal-Mart escalate Web price war
6.8-magnitude quake rattles Tonga
8 charged in probe of terrorism-recruiting network in U.S.
Hate crimes against gays, religious groups up, FBI says

New Beginnings Christian Fellowship
Coming in this Sunday's Pacific Northwest Magazine: Pastor Braxton's mission is to preach a message that appeals to everyone.
nwautos
Local riders say they've seen a surge in scooter interest in recent years, mostly from people wanting another commuting option. Seattle now ranks as o...
Post a comment
nwjobs
Post a comment
Michelle Goodman blogs about work/life balance.
Do you suffer from "sitting disease"?
Post a comment
- Illegal workers quietly let go
- Sprouts, raw fish on attorney's 'do not eat' list
- Jerry Brewer | Jerry Brewer: Seahawks can't lean on the Hutch Crutch now
- Woman stabbed by stranger in North Seattle
- Tattoos at Mill Creek church pierce skin, soul
- UW, WSU once again meet to see who's worse
- Food-safety lawyer's wish: Put me out of business
- Husky Football Blog | Ranking the Pac
- Vikings easily beat the Seahawks
- Tugboat sinks at Seattle waterfront pier
- Illegal workers quietly let go
425 - Climate change speeds up since 1997 Kyoto accord
224 - Bellevue residents blast new bikini espresso stand
182 - Big demand, grim outlook for state Basic Health Plan
114 - Washington State coach Paul Wulff says he's excited about Cougars' future
113 - New Husky recruit: Enes Kanter
109 - Next Seahawks GM should be Mike Holmgren
108 - Seattle woman charged with knife attack on boyfriend's ex
94 - Jose Lopez appears to be on his way out
89 - Middleton says Huskies "plan on scoring at least 50 points'' Saturday
87
- Sprouts, raw fish on attorney's 'do not eat' list
- Tattoos at Mill Creek church pierce skin, soul
- Food-safety lawyer's wish: Put me out of business
- Illegal workers quietly let go
- Architects, chefs find 'kid' within to build Gingerbread Village
- Nicole Brodeur | Homeless woman bent on giving
- Rediscovering Moab, 'the most beautiful place on Earth'
- UW, WSU once again meet to see who's worse
- Hutch gets $10M from Bezos family for immunotherapy research
- Elton John & Billy Joel reschedule Seattle concerts





