McCain Calls for Suspending Federal Gas Tax Republican presidential hopeful John McCain called for a temporary lifting of federal fuel taxes in order to cut gas prices during the busy summer driving season. "The effect will be an immediate economic stimulus" for families and businesses alike, McCain says.

McCain Calls for Suspending Federal Gas Tax

McCain Calls for Suspending Federal Gas Tax

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McCain outlined several economic proposals in his speech in Pittsburgh. Read a full transcript of his remarks.

With oil prices hitting new highs, Sen. John McCain of Arizona on Tuesday called for a summer vacation from federal gas taxes.

McCain said that temporarily lifting the gas tax of 18 cents a gallon between Memorial Day and Labor Day would give Americans a break at every fill-up during the busy summer driving season.

The presumptive Republican White House nominee has been trying in recent weeks to show concern for Americans facing tough economic times, while still limiting the role of the federal government. During a wide-ranging speech at Carnegie Mellon University in Pittsburgh, he said Americans are in danger of losing confidence.

"I leave it for others to speculate on the technical definition of a recession," McCain said. "It's all a little beside the point if it's your plant that's closing and your job that's gone, and when you are facing foreclosure, or back in debt after years of hard effort, or hardly able to buy food, gas or heating for your home."

The gas tax break would cost the government about $10 billion in lost revenue. McCain also called for expanded aid to college students, who may have trouble getting student loans this fall from increasingly cautious lenders. And he repeated the proposal he made last week to help struggling homeowners refinance.

"If you can't make your payments, and you're in danger of foreclosure, you will be able to go to any post office and pick up a form for a new home loan. In place of your flawed mortgage loan, you'll be eligible for a new, 30-year fixed-rate loan backed by the United States government," McCain said.

He did not mention that the plan relies on lenders' willingness to forgive a portion of the loans.

Rewriting the Tax Code

On tax deadline day, McCain also called for an overhaul of the federal tax code. He suggested cutting the corporate tax rate, doubling the exemption for dependent children and offering taxpayers a streamlined, alternative tax system with a bigger standard deduction.

"Americans do not resent paying their rightful share of taxes. What they do resent is being subjected to thousands of pages of needless and often irrational rules and demands from the IRS," McCain said.

He also would offset some of his tax cuts by reducing federal spending. He proposed a one-year freeze in the government's discretionary spending and repeated his promise to fight lawmakers' pet-spending projects.

"I will veto every bill with earmarks until the Congress stops sending bills with earmarks on them," McCain said.

McCain gave only a nod to health care and energy policy in his speech, although he's promised to make both a part of what he calls his "pro-growth agenda." And, he reiterated his support for free trade, one day after his Democratic rivals addressed a manufacturing forum in Pittsburgh and called for tougher trade policy toward China.

"We can compete with anyone," McCain said. "Sens. Obama and Clinton think we should hide behind walls, bury our heads and industries in the sand, and hope we have enough left to live on while the world passes us by."

Wrestling with Globalization

Many voters, including Republicans, have grown wary of unfettered trade.

"We have to look at jobs in this country and protect good manufacturing jobs that are the basis of middle-class America. They're the basis of what this country was built on," said Pat Hassey, CEO of Allegheny Technologies, a specialized metals company based in Pittsburgh.

Even though Hassey's company does much of its business overseas, he said he can no longer afford what he called a "one-sided" trade policy.

McCain acknowledged that economic challenges brought on by globalization can be wrenching.

"Change is hard," McCain said. "And while most of us gain, some industries, companies and workers are left to struggle with very difficult choices. And government should help workers get the education and training they need for the new jobs that will be created by new businesses in this new century."

That may be easier said than done.

"It's not that easy to take a 50-plus-year-old steelworker and make them into a database administrator. It's not going to happen," said Chris Briem, an economist at the University of Pittsburgh's Center for Social and Urban Research.

McCain — who has recently been getting a crash course in economics — said on Tuesday that the economy cannot be separated from the rest of life.

"When we debate economic policy, we are talking, after all, about the deepest hopes that carry us each along in the work we do," he said.

That's especially true this election year, when the economy is uppermost in voters' minds.