McCain wants to temporarily halt federal gas tax
PITTSBURGH -- John McCain called today for the federal government to free people from paying gasoline taxes this summer and ensure that college students can secure loans this fall, proposals aimed at stemming the public's pain now from the troubled economy.
In the longer-term, the certain Republican presidential nominee said he would double the tax exemption for dependent children and offer people the option of choosing a simpler tax system.
"We know from experience that no serious reform of the current tax code will come out of Congress, so now it is time to turn the decision over to the people,'' McCain said in a sweeping economic speech at Carnegie Mellon University a week before Pennsylvania's primaries.
To help people weather the downturn immediately, 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. He also renewed his call for the United States to stop adding to the Strategic Petroleum Reserve and thus lessen to some extent the worldwide demand for oil.
Combined, he said, the two proposals would reduce gas prices, which would have a trickle-down effect, and "help to spread relief across the American economy.''
Addressing the feared fallout of the ongoing credit crunch, McCain also said the Education Department should work with the country's governors to make sure that each state's guarantee agency -- nonprofits that traditionally back student loans issued by banks -- has both the means and the manpower to be the lender-of-last-resort for student loans.
Lawmakers, students and financial experts are worried that the credit crisis might make it more difficult for students and their families to find loans. Nearly two dozen lenders have dropped out of the federally backed student loan program.
Students, McCain said, "should not be denied an education because the recklessness of others has made credit too hard to obtain.''
Among other proposals, McCain said he would:
The four-term Arizona senator packaged the fresh proposals with long-standing positions in a wide-ranging economic speech on Tax Day in which he faulted not only Democrats but also fellow Republicans for failing to practice prudent spending and fix pricey entitlement programs.
"In so many ways, we need to make a clean break from the worst excesses of both political parties,'' McCain said, adding "somewhere along the way, too many Republicans in Congress became indistinguishable from the big-spending Democrats they used to oppose.''
He also argued that Democratic rivals Barack Obama and Hillary Rodham Clinton would impose the single largest tax increase since World War II by allowing tax cuts enacted in 2001 and 2003 -- and that McCain voted against but now wants to make permanent -- to expire.
"Both promise big 'change.' And a trillion dollars in new taxes over the next decade would certainly fit that description,'' McCain said. Playing on the title of an Obama book, McCain added: "All these tax increases are the fine print under the slogan of 'hope:' They're going to raise your taxes by thousands of dollars per year -- and they have the audacity to hope you don't mind.''
The speech was part of McCain's ongoing effort to counter the notion -- fueled by his own previous comments -- that he's not as strong on the economy as he is on other issues. He also sought to fend off criticism from Democrats, including Obama and Clinton, that his small-government, free-market stances don't mesh with people feeling the pinch -- particularly those hurting now.
He made his remarks a day after he said he believes the country has already entered a recession, a label the Bush administration has resisted even as a credit crisis, a housing slump, soaring energy costs and rising layoffs combined to soften the economy.
The speech also came the same morning the Labor Department reported another worrisome sign for the economy: Inflation at the wholesale level soared in March at nearly triple the rate that had been expected as the costs of energy and food both climbed rapidly. Oil prices hit a new high, rising over $112 a barrel for the first time.