Sen. John McCain, the presumptive Republican presidential nominee, offered the broadest look yet at his economic policies Tuesday, calling for tax cuts, a freeze in discretionary spending for a year, higher premiums for better-off Medicare recipients and elimination of federal gas taxes this summer to reinvigorate the economy.
Gas-tax holiday: McCain urged Congress to institute a "gas-tax holiday" by suspending the 18.4 cent federal gas tax and 24.4 cent diesel tax from Memorial Day to Labor Day.
The cost: By some estimates, the government would lose about $10 billion in revenue.
Its prospects: The plan is likely to face opposition from Congress and states. The federal gas tax helps pay for highway projects in most towns. McCain's chief economic policy adviser, Douglas Holtz-Eakin, said money would be taken from general funds to ensure that the Highway Trust Fund didn't run short. Its budget deficit is already projected at $500 billion.
Tax exemptions: McCain, speaking in Pittsburgh, proposed raising the tax exemption for each dependent child from $3,500 to $7,000 at an estimated $65 billion annual cost. Aides said McCain would offset it by cutting federal spending.
Medicare: He called for wealthier Medicare recipients to pay higher premiums for drug coverage. It would apply to singles earning more than $82,000 a year and married couples earning more than $164,000. It would affect about 5 percent of beneficiaries, about 1 million people, and net the government $2 billion a year, he said.
Simplified tax system: He proposed a simpler tax code that Americans could opt into, with only two tax rates and a "generous" -- though unspecified -- standard deduction.
Corporate tax rate: Lower it from 35 to 25 percent, meaning $100 billion in lost revenue.
PAYING THE BILL
Like his rivals, McCain was vague on how he'd pay for his plan. Aides said that his proposals would cost $195 billion.
Sen. Barack Obama: "John McCain used to oppose the Bush tax cuts to the wealthiest Americans. He used to say that tax cuts in a time of war were a bad idea. ... Now he wants to make those tax cuts permanent."
Sen. Hillary Rodham Clinton's chief policy adviser, Neera Tanden, dismissed McCain's ideas as "a George Bush redux of corporate windfalls and tax cuts for the wealthy."
McCain said his rivals would impose the single largest tax increase since World War II by allowing tax cuts enacted in 2001 and 2003 -- which McCain opposed -- to expire. "They're going to raise your taxes by thousands of dollars per year, and they have the audacity to hope you don't mind," he said, alluding to Obama's book, "The Audacity of Hope."
McCain will speak at an economic summit in Milwaukee.