Expensive Campaign Promises To Face Reality Check
WASHINGTON — Senator Obama promises $4,000 credits to help pay college tuition. Senator Clinton backs $25 billion for home heating subsidies. And Senator McCain wants to not only extend President Bush's tax cuts, but eliminate the alternative minimum tax at a cost of about $2 trillion over 10 years.
Then there's reality.
These campaign pledges — and dozens more in the manifestos of the leading presidential candidates — face a collision with the real world come January.
That's when the new president will start putting together a real budget and economic plan, one drafted against the backdrop of record federal deficits exceeding $400 billion. Even more challenging is the growth of the Medicare and Social Security retirement programs, which budget experts say could require wrenching benefit cuts, politically difficult tax hikes, or both to handle the retirement of the baby boom generation.
In that environment, promises to effectively rebate the first $500 of Social Security payroll taxes (Mr. Obama), provide $1,000 tax credits for retirement savings (Mrs. Clinton) or cut the corporate income tax by 10 percentage points (Mr. McCain) may turn out to be campaign fantasies.
"They're operating in Never Never Land. ... None of them are honestly addressing the real challenges that they're going to be facing if they're elected," the former budget director and chief of staff for President Clinton, Leon Panetta, said. "We're facing a deficit bubble that is getting increasingly worse and at some point is going to explode on us."
Mr. Obama and Mrs. Clinton face a situation eerily familiar to 1992, when Mr. Clinton ran a campaign promising middle-class tax cuts and universal health care. Instead, worsening deficit predictions led him to push through Congress a tax-heavy deficit reduction plan that helped Republicans take over Congress in 1994. For Mr. McCain, the parallel is to the one-term presidency of George H.W. Bush, who inherited a budget crisis — and a Congress controlled by Democrats — that ultimately led him to break his "read my lips" pledge not to raise taxes.
For now, however, the campaigns are sticking with policy papers that don't add up but cater to political constituencies.
