Senator Will Speak on Drug Premiums, Recession

WASHINGTON — American retirees with incomes greater than $85,000 a year would have to pay higher prescription drug premiums under a proposal Senator McCain plans to announce today in a major economic address in Pittsburgh.

The presumptive Republican presidential nominee will push the plan as a way to cut the costs of Medicare and control entitlement spending. The prescription drug change, which would apply to retirees who voluntarily enroll in Medicare, could result in savings in the "billions," his advisers said yesterday in a conference call previewing the speech. Singles with incomes of $85,000 or higher and couples with incomes of $160,000 or higher would be affected.

Mr. McCain also will call for a one-year "pause" in discretionary spending increases as part of a pledge to review all government programs, agencies, and departments. The Department of Defense and veterans' benefits will be excluded from the spending limits.

The Arizona senator has made curbing government waste a central plank in his campaign platform. He has previously pledged to veto any bill containing earmarks — pet projects often inserted into spending bills with little debate or oversight. In an effort to boost transparency, his advisers said, Mr. McCain will promise to post performance evaluations and information about all government contracts and bids on the Internet.

Today's speech will be Mr. McCain's third economic address in the past month as he has sought to respond to the credit crunch and increasing concerns that a recession is looming or already here. He told reporters yesterday that he believes the economy is now in recession.

Senators Clinton and Obama have criticized Mr. McCain for what they call his passive approach to the growing economic woes, while his latest proposals to help homeowners have been seen as a switch from his opposition to a government bailout.

His advisers tried to downplay those concerns yesterday, insisting that Mr. McCain's philosophy that government should be small but involved remained consistent. "He is a person who thinks there is a role for government," a senior policy aide, Douglas Holtz-Eakin, said.

Mr. Holtz-Eakin described Mr. McCain's address today as a "big and ambitious speech," saying he would lay out his vision on taxes, trade, the budget, health, education, and energy.