Former Clinton Adviser Analyzes McCain Economics

Laura D'Andrea Tyson, economic adviser to Senator Obama, says Senator McCain's economic plan is a basically a continuation President Bush's tax cuts. She says it would also be "simply impossible" to balance the budget without slashing Social Security.


Senator McCain has his own economic plan, of course. And now for a look at the plan from her point of view is Laura D'Andrea Tyson. She headed the president's Council of Advisers and the National Economic Council during the Clinton administration. She now advises Senator Obama in economic policies. She's a professor at the Haas School of Business at the University of California, Berkeley, and joins us from there. Thank you for being with us.

Dr. LAURA D'ANDREA TYSON (Professor of Business Administration and Economics, Walter A. Haas School of Business, University of California at Berkeley; Economic Adviser to Senator Obama): It's a pleasure, Scott.

SIMON: What are the key elements of Senator McCain's plan as you see it?

Dr. TYSON: Well, the key element really is to take tax cuts, which actually he was one of the opponents of the Bush tax cuts, to not only retain them, extend them, but actually to double up on them. They're heavily biased towards wealthy Americans and towards corporations.

SIMON: That phrase, "Wealthy Americans." Senator McCain and other proponents of tax cuts think that the American people should understand exactly what people like you make of that phrase, "Wealthy Americans."

Dr. TYSON: OK. Senator Obama has promised, and Senator McCain has not made this explicit promise, but Senator Obama has promised that there will be no tax increases of any sort - capital gains, dividends, income tax rate, payroll tax rates - for families making less than 250,000 dollars a year. The truth is that you look at these numbers, and you can say that 95 percent of American taxpayers will actually get net tax cut from Senator Obama, and 101 million taxpayers in the United States will not get a tax cut of any sort from Senator McCain. Not only that, but he's not even promising to rule out the possibility of a tax increase on those families.

SIMON: At the same time, you don't see a President McCain as being just an extension of the Bush administration, I gather?

Dr. TYSON: You know, what's interesting to me is that Senator McCain has been known in the past to disagree with President Bush, in particular in the essential parts of the economic proposals that we're talking about, tax cuts and deficits. And nonetheless, if you actually look at what Senator McCain has put on the table, what you do see is a continuation and, as I said, a doubling down on the kinds of tax cuts that President Bush put in place in 2001 and 2003. At that time, Senator McCain said those tax cuts were morally indefensible at a time of war, were not necessary for the economy, would worsen the deficit, and would be regressive. And now he's changed his position. He's not the McCain he used to be.

SIMON: Where do you see the economy going, Dr. Tyson?

Dr. TYSON: We have really underinvested for many years in things that economists think of as the foundation for economic growth: education, infrastructure, our roads, our highways, our airports, our utility grid. So we need to invest. You started with a question about Senator McCain.

SIMON: Yeah.

Dr. TYSON: I talked about tax. How about he's been known over time to be a kind of hawk on the deficit? If you actually look at the economic plan he's put out, the estimates of the increase in the deficit over ten years coming from Senator McCain are 3.4 trillion dollar increase in the deficit. Senator McCain says he wants to balance the budget by 2013. If you look at his numbers, it's simply impossible unless he has in mind to do things like cut Social Security and Medicare by more than 50 percent. He's not going to do that. So he has no plan for bringing the deficit down. Indeed, his plan increases the deficit significantly.

SIMON: Laura D'Andrea Tyson who chaired the president's Council of Economic Advisers and the National Economic Council under President Clinton. She now advises Senator Obama on economic policies. Thanks so much for being with us.

Dr. TYSON: Thank you, Scott.

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