(AFP) – Sep 13, 2008
CHICAGO (AFP) — Barack Obama's White House campaign Saturday seized on a warning from former Federal Reserve boss Alan Greenspan about John McCain's tax plans to portray the Republican as economically reckless.
In an interview with Bloomberg Television Friday, the legendary ex-chairman of the US central bank said the nation could not afford 3.3 trillion dollars of tax cuts proposed by McCain without matching cuts in spending.
Greenspan, a long-time friend of McCain and a Republican, said about the Arizona senator's plans to extend massive tax cuts imposed by President George W. Bush: "I'm not in favor of financing tax cuts with borrowed money."
McCain has said he would pay for his cuts by ending pet funding projects for US lawmakers' districts known as "earmarks."
But Senator Claire McCaskill said that would save no more than 17 billion dollars and was a "drop in the bucket," expressing frustration that "no one is holding John McCain's feet to the fire" on how he would pay for his cuts.
"It's time for John McCain to back up his claim of honor by being honest with the American people on how he's going to pay for his plan," she said on a media call. "That's what Alan Greenspan was talking about yesterday."
Obama is promising to cut taxes for 95 percent of all working Americans, and accuses McCain of distorting his own proposals by running advertisements that claim most voters would pay higher taxes under an Obama administration.
The Democrat says he would be fiscally responsible and match the cuts with an array of revenue measures.
The measures include higher taxes on those earning more than 250,000 dollars a year, ending the war in Iraq and so saving 10 billion dollars a month, and scrapping hefty tax breaks for major companies.
Laura Tyson, a former chief economic adviser to president Bill Clinton who is now a counselor to Obama, said that "McCain has said his professor and mentor is Alan Greenspan."
"And that's why Alan's comments yesterday are so very important. He's saying look, these numbers just don't add up and it's not good for the US economy to finance large tax cuts with borrowed money," she said on the call.
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