More McCainomics

Ezra Klein:

I just saw Doug Holtz-Eakin lay out the John McCain economic agenda at an Urban Institute event. Needless to say, he didn't really answer any of these questions. But one bit footwork struck me as particularly impressive. Most estimates of McCain's tax agenda suggest that making permanent the tax cuts, adding two new corporate cuts, and repealing the Alternative Minimum Tax would cost around $2-$3 trillion over 10 years. He disagreed. McCain's tax plan, he said, will only add $20 or $30 billion to the deficit.

On first listen, I assumed Holtz-Eakin was just using wildly different numbers than everyone else. Not so. As I reconstructed my notes, here's the magic: First, Doug Holtz-Eakin lambasted the "fantasy baseline" that assumes the Bush tax cuts will end, as they're currently set to do. This knocks a couple trillion off the total, particularly if you assume that it also means the repeal of the Alternative Minimum Tax. Then he moves us to a year-by-year time frame, rather than the more traditional 10-year window. Then, he assumes this stuff will partially pay for itself down the line. Then he assumes some closed earmarks and eliminated waste. And so we end up with $20-$30 billion a year. The actual hole in the deficit doesn't change -- that's still in the trillions -- but the amount McCain takes responsibility for is now in the low billions.

That, my friends, is straight talk.