Obama Knocks McCain on Economy

Both Barack Obama and John McCain will hit the hustings this week to talk about issue No. 1, the economy. Obama will hit "red states" (although just about everyone I know is sick to death of this hackneyed designation) of Virginia, Ohio, and North Carolina. McCain will hit much the same territory. Neither candidate is going to roll out new positions but instead play up differences and emphasize their "awareness."

We have two developments on this front, starting today.

The Obama camp rolled out a compare-and-contrast report on Obama and McCain economic policy.

Here is the link to the PDF file


It's not on the website yet, but will probably arrive soon. The upshot: McCain's tax policy favors the rich and doesn't do nearly as much as Obama promises for the middle class. The secondary argument is that Obama's had more specifics and a longer-term focus on economic woes than McCain. Interestingly, in the description of the "gap" between Obama and McCain economic policy, there was no accusation McCain was merely seeking a third term home for most Bush economic policies. That may have been an oversight. The Bourbon Room doubts that line or attack has been expunged.

The campaign just finished a conference call with former Clinton Commerce Secretary William Daley (he's now a vice chairman of Obama's campaign) and Jason Furman, Obama's senior economic policy adviser.

Daley noted Obama's been far more specific about short-term and long-term economic policies than McCain, calling for the first economic stimulus plan before Hillary Clinton and for a month now he's advocated a second stimulus plan. One part of Obama's first stimulus plan, increased unemployment insurance, was added into the funding bill for the Iraq and Afghanistan wars. Obama's second stimulus bill calls for $50 billion in new spending: $20 billion in tax rebates; $!0 for cash-strapped states (to cover infrastructure and Medicaid costs, the campaign says), and $10 billion to slow home foreclosures.

The campaign says it won't pay for the stimulus because offsetting it with tax increases or spending cuts would defeat the purpose of a short-term stimulus.

The other development today, is the appearance of a Republican National Committee ad attacking Obama on energy.

Here's the link: http://www.youtube.com/watch?v=gE8_NecN3WA

And here's the script with back-ground data provided by the RNC:

Title: “Balance” TV
(30 sec.) ANNOUNCER: “Record gas prices, a climate in crisis. John McCain says solve it now.
With a balanced plan -- alternative energy, conservation, suspending the gas tax, AND more
production here at home. He’s pushing his own Party to face climate change. But Barack Obama?
For conservation, but he just says no to lower gas taxes. No to nuclear. No to more production. No
new solutions. Barack Obama: Just the Party line. The Republican National Committee is responsible
for the content of this advertising.

Original Script Fact
gas prices, a climate in
No verification necessary.
“John McCain says solve it
No verification necessary.
“With a balanced plan --
alternative energy,
conservation, suspending the
gas tax, AND more
production here at home.”
All policy positions are available on Senator McCain’s campaign website:
www.johnmccain.com (accessed on July 2, 2008).
“He’s pushing his own Party
to face climate change.”
Elisabeth Bumiller and John M. Broder, Greenhouse Gas Must Be Capped, McCain
Asserts, N.Y. Times, May 13, 2008, at A1.
“But Barack Obama? For
conservation, but he just says
no to lower gas taxes.”
Senator Hillary Rodham Clinton lined up with Senator John McCain, the presumptive
Republican nominee for president, in endorsing a plan to suspend the federal excise
tax on gasoline, 18.4 cents a gallon, for the summer travel season. But Senator
Barack Obama, Mrs. Clinton’s Democratic rival, spoke out firmly against the
proposal, saying it would save consumers little and do nothing to curtail oil
consumption and imports. (John M. Broder, "As Clinton Seeks Gas Tax Break For
Summer, Obama Says No," The New York Times, 4/29/08)
“No to nuclear.” Newton, Iowa Speech, December 12, 2007
“I am not a nuclear energy proponent.”
“No to more production.” "Offshore drilling would not lower gas prices today, it would not lower gas prices next
year and it would not lower gas prices five years from now." (The Associated Press,
June 20, 2008, “Obama Criticizes McCain on offshore drilling”)
“No new solutions. Barack
Obama: Just the Party line.”
Obama, 97% Party Line Voting 2007 (CQ.com)
“The Republican National
Committee is responsible for
the content of this
No verification necessary.


Hari Sevugan -mailed this point-by-point response within moments of the release of the RNC energy script.

"What we need to solve our energy crisis is an honest debate about the choices before us, not more attack ads that mislead voters about the facts. There's a real choice in this election between John McCain's promise to continue the Bush approach of trying to drill our way out of our energy crisis - which even he admits won't lower prices this summer - or Barack Obama's plan to provide meaningful short-term relief for our families and to make a historic investment in alternative energy development that will create millions of new jobs, keep the cost of energy affordable and secure our energy independence once and for all," said Obama spokesman Hari Sevugan.



“Record gas prices, a climate in crisis. John McCain says solve it now. With a balanced plan -- alternative energy, conservation,
McCain Opposed Legislation Extending The Renewable Energy Production Tax Credit; Recent Study Concluded More than 116,000 Jobs Could be Lost If the Tax Credit is Not Extended. In 2006, John McCain voted against a proposal sponsored by Senator Jeff Bingaman that included a four year extension of the production tax credit. In addition, McCain supported the filibuster of the 2007 energy bill that sought to extend the production tax credit to 2011. While McCain missed the vote to on the bill, according to his staff he did, in fact, support the continuing the filibuster, which eventually killed the bill. A 2008 economic study by Navigant Consulting finds that “over 116,000 U.S. jobs and nearly $19 billion in U.S. investment could be lost in just one year if renewable energy tax credits are not renewed by Congress, according to preliminary results released today by the American Wind Energy Association and the Solar Energy Industries Association. The study concluded that over 76,000 jobs are put at risk in the wind industry, and approximately 40,000 jobs in the solar industry. The states that could lose the most jobs include: Texas, Colorado, Illinois, Oregon, Minnesota, Washington, Iowa, North Dakota, Oklahoma, Pennsylvania, and California. The lion’s share of these states would lose more than 1,000 jobs.” [Vote 42, 3/14/06; Vote 425, 12/13/07; Forbes, 12/13/07; U.S. News & World Report, 12/14/07; American Wind Energy Association and the Solar Energy Industries Association press release, 2/4/08]

McCain, Asked If He Supported Government Investment In Wind And Solar Industries, Said “I’m Not One Who Believes That We Need To Subsidize Things.” McCain, when asked what his position is on subsidies for wind and solar, said “I'm not one who believes that we need to subsidize things. The wind industry is doing fine, the solar industry is doing fine. In the '70s, we gave too many subsidies and too much help, and we had substandard products sold to the American people, which then made them disenchanted with solar for a long time.” [Grist, 10/1/07]

McCain Repeatedly Voted Against Renewable Energy Mandates. John McCain has repeatedly voted against renewable energy mandates, including a measure to require that renewable sources be used to produce at least 10 percent of the electricity sold by electric utilities by 2020. [Vote 141, 16/05; Vote 50, 3/14/02; Vote 55, 3/21/02; Vote 50, 3/14/02]

McCain Repeatedly Voted Against Tax Credits to Encourage the Use Alternative Energy Sources. John McCain has repeatedly opposed measures to provide tax credits to encourage investment in renewable energy technologies. For example, in 2007 he supported the filibuster of energy legislation that sought to have revoke $13.5 billion in tax cuts for the five largest oil companies and instead provide tax incentives for solar, wind, geothermal, biomass, wave energy and other renewable sources of energy. McCain was the only Senator to miss the vote on the bill, but his staff noted that he did, in fact, support the filibuster that eventually killed the proposal. [Vote 425, 12/13/07; Vote 125, 5/21/01; Vote 246, 7/30/99; Forbes, 12/13/07]

McCain Repeatedly Voted Against Renewable Fuel Mandates. John McCain repeatedly voted against renewable fuel mandates, including a measure to require refiners to use 8 billion gallons of renewable fuels each year, by 2012. He also supported an effort to delay renewable fuel mandates and to allow states to opt out of the mandates. [Vote 139, 6/15/05; Vote 138, 6/15/05; Vote 73, 4/29/04; Vote 74, 4/29/04; Vote 207, 6/5/03; Vote 203, 6/3/03; Vote 204,6/3/03; Vote 88, 4/25/02; Vote 78, 4/23/02; Vote 18, 2/5/92]

LA Times: McCain Has “Opposed Standards To Require That Utilities Use Less Fossil Fuel By Generating More Power From Renewable Sources, Such As Wind And Solar… [And] Rejected Federal Tax Breaks For Renewable Energy Producers, But Backs Billions Of Dollars In Subsidies For The Nuclear Industry.” “McCain's record of tackling energy policy on Capitol Hill shows little of the clear direction he says would come from a McCain White House. Instead, the Arizona senator has swerved from one position to another over the years, taking often contradictory stances on the federal government's role in energy policy. At times he has backed measures to ease restrictions on oil drilling off the coast and in Alaska's Arctic National Wildlife Refuge. Other times he has voted to keep them. He has championed standards to require that automakers make vehicles more fuel-efficient, yet opposed standards to require that utilities use less fossil fuel by generating more power from renewable sources, such as wind and solar. McCain has rejected federal tax breaks for renewable energy producers, but backs billions of dollars in subsidies for the nuclear industry. He has criticized corn-based ethanol for doing ‘nothing to increase our energy independence.’ Yet while campaigning in 2006 in the Midwest corn belt, McCain called ethanol a ‘vital, vital alternative energy source.’” [Los Angeles Times, 7/1/08]

suspending the gas tax,

Economists Said A Gas Tax Holiday Could Actually Increase Gas Prices. “Economists and energy analysts say it would have little impact on mitigating the rise in gasoline prices. In fact, it could lead to the opposite result. The federal gasoline tax represents a flat fee of 18.4 cents a gallon nationwide. With gasoline currently averaging $3.39 a gallon, the tax represents a mere 5 percent of today’s pump price. While that’s not trivial, consider that gasoline prices have more than doubled since 2004. The problem is that lowering gasoline prices at the pump would encourage more consumption. So in the long run, it would push prices up. […] “You don’t want to stimulate consumption,” said Lawrence Goldstein, an economist at the Energy Policy Research Foundation. “The signal you want to send is the opposite one. Politicians should say that conservation is where people’s mindset ought to be.” Mr. Goldstein said that instead of freezing the federal tax, the government should help lower-income populations pay for gasoline. It would be cheaper and benefit those households that need it most. The United States the has lowest gasoline taxes among industrialized countries. It also has the highest gasoline consumption level in the world. Energy experts say the two are related.” [New York Times, 4/15/08]

Factcheck.org: A Gas Tax Holiday Has Been Criticized By More Than 300 Economists, Was To Start On Memorial Day, And Has A Near Zero Chance Of Enactment. Factcheck.org wrote, “That ‘gas tax holiday,’ an idea that has been criticized by more than 300 economists, was to have started on Memorial Day, however, and has a near-zero chance of enactment.” [Factcheck.org, 6/26/08]


Nationally: $9 billion in highway funds and more than 300,000 in lost jobs.

Florida: $361.4 million in highway funds and more than 12,500 in lost jobs.

Michigan: $208.4 million in highway funds and more than 7,200 in lost jobs.

Ohio: $265.9 million in highway funds and more than 8,900 in lost jobs.

Pennsylvania: $330.5 million in highway funds and more than 11,400 in lost jobs.

Wisconsin: $137.3 million in highway funds and more than 4,700 in lost jobs.



Wall Street Journal: Suspending The Gas Tax “Smacks Of Poll-Driven Gimmickry.” “Less credible is Mr. McCain's call for Washington to suspend the 18.4-cent-a-gallon federal gasoline tax between Memorial Day and Labor Day to help consumers hit by high oil prices. There are few tax cuts we don't like, but this one smacks of poll-driven gimmickry. If Mr. McCain wants to cut the price of gasoline, he should tell the Federal Reserve to stop fueling the commodity boom by cutting interest rates.” [WSJ Editorial, 4/16/08]

Cato Economist: “The Likely Market Response To A Tax Holiday Is To Keep The Prices Exactly Where They Were Before The Tax Holiday And Just To Take In The Extra Revenue.” Cato Institute economist Jerry Taylor said, “The likely market response to a tax holiday is to keep the prices exactly where they were before the tax holiday and just to take in the extra revenue. The reason that is, is let’s assume for instance that all the service station owners tried to cut gasoline prices to reflect the cut in the federal gasoline tax, which is about 18 cents a gallon. Well, if you believe that the supply of gasoline is relatively fixed over the summer, I suspect that that's true, then reducing price is going to increase demand but there’s no more gasoline to put into the market. That increased demand is going to bid the price right back up to where it was before the prices were cut in the first place.” [CNN, 4/30/08]

Cheney: Gas Tax Holiday “A False Notion” That Won’t “Have Much Of An Impact.” Vice President Cheney said, “I think it's a false notion, in the sense that you're not going to have much of an impact, given the size of the gasoline tax on the total cost of the gallon of gas…You might buy a little bit of relief there, but it's minimal.” [AP, 6/2/08]

Sen. Cornyn: “The Money’s Going To Have To Come From Somewhere… While It Could Provide Perhaps Some Temporary Relief, We Really Need A Long-Term Solution.” Asked about a gas tax holiday, Cornyn said, “Well, the money’s going to have to come from somewhere, because as you know, the gas tax pays for construction of new roads and maintenance of the roads we have. So, while it could provide perhaps some temporary relief, we really need a long-term solution.” [CNN, 4/30/08]

Grassley: Not Sure He’d Vote For McCain’s Gas Tax Holiday, Saying “That’s Not The Best Way To Make Policy.” “U.S. Sen. Chuck Grassley, R-Iowa, said today he’s not sure he would vote for a summerlong suspension of the federal gasoline tax, a key proposal made by his party’s presidential nominee, John McCain. Grassley told reporters it might do more good for oil companies to disgorge some of their profits. McCain has proposed suspending the 18.4 cent tax on gasoline and the 24.4 cent tax on diesel fuel between Memorial Day and Labor Day. With gasoline prices surging, hitting $4 per gallon in some parts of the country, consumers are feeling the pinch… ‘I have mixed emotions. I’d like to support John McCain for doing it, suggesting it,’ he said. But he added just because the proposal has been made, ‘that’s not the best way to make policy.’ Grassley said he has sympathy for people paying high gas prices but added oil company executives might do well to publish profit margins then surrender some of those profits to lower prices. ‘It would do our country more good than lowering the gas tax,’ he said. He said it would help the oil companies’ image, too.” [Quad City Times, 4/30/08]

AND more production here at home. He’s pushing his own party to face climate change.
McCain Admitted His Offshore Drilling Proposal Would Have Mostly “Psychological” Benefits. “Yesterday, McCain admitted that his offshore drilling proposal would probably have mostly ‘psychological’ benefits, NBC/NJ’s Adam Aigner-Treworgy reports. At a town hall in Fresno that primarily focused on energy issues, McCain was asked a question about the price of gas and the viability of various short-term solutions. ‘In the short term I'd like to give you a little relief for the summer on the gas tax,’ McCain began, referring to his controversial proposal to temporarily suspend the federal tax on gasoline. But then he made a surprisingly candid admission: ‘I don't see an immediate relief, but I do see that exploitation of existing reserves that may exist -- and in view of many experts that do exist off our coasts -- is also a way that we need to provide relief. Even though it may take some years, the fact that we are exploiting those reserves would have psychological impact that I think is beneficial.’” [MSNBC’s First Read, 6/24/08]

McCain Admitted Offshore Drilling Would Take Years to Develop. McCain said of the impact of offshore drilling, "[W]ith those resources, which would take years to develop, you would only postpone or temporarily relieve our dependency on fossil fuels." [McCain Town Hall, Greensdale, WI 5/29/08]

McCain Adviser Holtz-Eakin Admitted That Increasing Domestic Oil Production Would Have No Immediate Impact On Gas Prices. According to the Los Angeles Times, McCain’s senior policy adviser Douglas Holtz-Eakin told reporters on a conference call that, “allowing new offshore drilling would have no immediate impact on supplies or gas prices. But, he said, ‘there is an important element in signaling to world oil markets that we are serious.’” [Los Angeles Times, 6/18/08]

Los Angeles Times: McCain’s Plan To End The Moratorium On Offshore Drilling Is A “Worthless Suggestion” And “The Destruction Of Our Coasts Is Too High A Price To Pay For A Negligible Decrease In Gas Prices That’s 20 Years Down The Road.” “President Bush and presumptive Republican presidential nominee John McCain both recently proposed an end to the federal moratorium on offshore oil drilling. What's really needed, though, is a moratorium on worthless suggestions from politicians for lowering gas prices. GOP leaders like Bush and McCain are rolling out their own nonsensical non-solutions to the energy crisis after the Senate this month beat back an equally ridiculous attempt at gas-pump pandering by Democrats. … Enter Bush, who on Wednesday said he would end his father's 1990 presidential moratorium on most coastal drilling if Congress would lift its own, separate ban. His reasoning was so contradictory that it's a wonder he could finish his news conference without cracking up. While conceding that the long-term solution to high oil prices is to pursue alternative energy sources, he argued that "in the short run, the American economy will continue to rely largely on oil, and that means we need to increase supply." The U.S. Energy Information Administration says that even if oil companies are allowed to tap the 18 billion barrels under coastal waters that are currently off-limits, oil prices wouldn't be expected to fall until 2030. How is that a short-term solution? Coastal drilling isn't just opposed by a bunch of Prius-driving greenies from Santa Barbara. Existing moratoriums were put in place at the behest of tourism interests, fishermen, small businesses and coastal dwellers. That's because drilling in these waters benefits oil companies but causes direct economic harm to everyone else by trashing beaches, poisoning marine life and ruining views. … The destruction of our coasts is too high a price to pay for a negligible decrease in gas prices that's 20 years down the road.” [Editorial, Los Angeles Times, 6/21/08]

Gov. Schwarzenegger: Anyone Who Tells You That Ending The Ban On Offshore Drilling Will Lower Gas Prices “Anytime Soon Is Blowing Smoke.” “In a strong rebuke Thursday of lifting the ban on U.S. offshore oil drilling, California Republican Gov. Arnold Schwarzenegger seemed to knock the standard-bearers of his party: President Bush and Arizona Sen. John McCain. Schwarzenegger, a long critic of his party of the environment, used surprisingly frank language to buck politicians who support lifting the 27-year-old ban of offshore drilling. He did not criticize anyone by name. ‘Politicians have been throwing around all kinds of ideas in response to the skyrocketing energy prices, from the rethinking of nuclear power to pushing biofuels and more renewables and ending the ban on offshore drilling, it goes on and on the list,’ Schwarzenegger said. … ‘But, anyone who tells you this will lower our gas prices anytime soon is blowing smoke.’” [ABC News, 6/26/08]

Houston Chronicle Headline: “Most Oil Execs Respond Favorably As [McCain] Touts Policy And Raises Funds In Campaign Trip Here.” “The oil industry generally approved Tuesday as Republican presidential candidate John McCain charted his policies on energy with a speech in Houston. … McCain said the federal government should ease regulations on offshore oil drilling and refinery construction and expand the use of nuclear energy, but press for eventual reliance on alternate energy sources such as wind and sunlight. …. As promised, he called for dissolving the federal ban on offshore oil drilling on the Pacific and Atlantic coasts and some parts of the eastern Gulf of Mexico.” [Houston Chronicle, 6/18/08]

But Barack Obama? For conservation, but he just says no to lower gas taxes. No to nuclear.
Obama Opposed Gas Tax Suspension Because It Would Cost Thousands Of Jobs And Wouldn’t Save Consumers Much Money. Obama said “Now, the two Washington candidates in the race have been attacking me lately because I don’t support their idea of a gas tax holiday. This is an idea that, when all is said and done, will save you – at most – half a tank of gas over the course of the entire summer. That’s about $28. It’s an idea that some economists think might actually raise gas prices. And without a plan to pay for it right away, it means that the money would come directly out of the fund we use to pay for construction projects, which could cost the state of North Carolina up to 7,000 jobs. This is the problem with Washington. We are facing a situation where oil prices could hit $200 a barrel. Oil companies like Shell and BP just reported record profits for the quarter. And we’re arguing over a gimmick that would save you half a tank of gas over the course of the entire summer so that everyone in Washington can pat themselves on the back and say that they did something. Well let me tell you – this isn’t an idea designed to get you through the summer, it’s designed to get them through an election. The easiest thing in the world for a politician to do is to tell you exactly what you want to hear. But if we want to finally solve the challenges we’re facing right now, we need to tell the American people what they need to hear. We need to tell the truth.” [Time, 4/29/08]

No to more production.
Obama: Offshore Drilling Wouldn’t Give Americans Appreciable Savings Until 2030. Obama said, “When I hear McCain say that he is now in favor of the same oil drilling off the coast that he was opposed to just a week ago, what he doesn't tell you is that George Bush's own energy department has said that this would have no impact on consumers until 2030…no appreciable impact for the next 22 years. Something they're not telling consumers.” [CNN, 6/20/08]

Obama: If There If There Was Any Evidence That Offshore Drilling Would Help People Who Are Struggling To Fill Up Their Gas Tanks This Summer Or In The Next Few Years He “Would Consider It, But It Won’t.” Obama said, “John McCain's proposal, George Bush's proposal to drill offshore here in Florida, and other places around the country, would not provide families with any relief, this year, next year, five years from now…Believe me, if I thought there was any evidence at all that drilling could save people money who are struggling to fill up their gas tanks by this summer or the next few years, I would consider it, but it won't.” [CNN, 6/20/08]

No new solutions. Barack Obama: Just the party line. The Republican National Committee is responsible for the content of this advertising."
Factcheck.org: Obama Proposed Spending $150 Billion To Develop “A Variety Of New Energy Technologies” Eight Months Before McCain First Mentioned His $300 Million Car Battery Prize So “Readers May Judge For Themselves Which Candidate Is More Aggressive About Promoting Energy Innovation.” Factcheck.org wrote, “And far from saying ‘no to innovation,’ Obama has proposed spending $150 billion over 10 years to develop a variety of new energy technologies, specifically including advanced biofuels, ‘clean coal’ technology, and wind and solar technologies. We find no specific reference to electric-car research, but we also find no evidence that Obama is opposed to developing electric cars. Furthermore, Obama laid out this $150 billion proposal in a speech on Oct. 8, 2007. That is more than eight months before McCain first mentioned his $300 million car-battery prize on June 23. Readers may judge for themselves which candidate is more aggressive about promoting energy innovation.” [Factcheck.org, 6/26/08]

Obama Would Institute A Windfall Profits Tax On Oil Companies And Use The Money To Help Families Pay Their Heating And Cooling Bills. Obama said, “That's why we'll put a windfall profits tax on oil companies and use it to help Indiana families pay their heating and cooling bills and reduce energy costs.” [Obama Energy Plan, 4/29/08]

Obama Would Institute A $1000 A Year Tax Cut To Middle Class Families To Help Pay For The Rising Cost Of Gas. Obama said, “We'll also take steps to reduce the price of oil and increase transparency in how prices are set so we can ensure that energy companies aren't bending the rules. And to help Indiana families meet the rising cost of gas, we'll put a middle class tax cut in their pockets that will save them $1,000 a year, and we'll eliminate income taxes altogether for seniors making less than $50,000.” [Obama Energy Plan, 4/29/08]

Obama Would Crack Down On Oil Speculators By Closing The “Enron Loophole.” “Obama proposed a four-step program that would, among other things, close a so-called ‘Enron loophole’ that protects some energy futures trading from oversight by the Commodity Futures Trading Commission, his advisers said. ‘I think everyone believes there's too much speculation in the oil markets, and a lot of it flows directly from that particular loophole,’ Gov. Jon Corzine, the New Jersey Democrat, said on a conference call hosted by the Obama campaign. The other three components of the plan, as described by Obama economic adviser Jason Furman, are: to ensure that US energy futures cannot be traded in offshore, unregulated markets; to work toward an international regulation of oil futures markets, in cooperation with like-minded countries; and to have both the Federal Trade Commission and the Department of Justice investigate the oil markets.” [Washington Post, 6/22/08]

Obama Would Invest $150 Billion Over 10 Years In Alternative Energy. “Obama said he would raise the fuel standards and invest $150 billion over the next 10 years in alternate sources of energy. ’My entire energy plan will produce three times the oil savings that John McCain's ever could -- and what's more, it will actually decrease our dependence on oil while his will only grow our addiction further,’ he said.” [CNN. 6/24/08]

For the summer months, the energy debate will be a proxy for the economy debate.

When possible, The Bourbon Room will provide as much information as possible from both campaigns in real time for readers to judge not just the media-driven arguments (meaning TV ads or surrogate talking points), but the policy ideas or policy history for each candidate behind the pro and con arguments.