Wednesday, July 30, 2008

McCain Campaign Conference Call On John McCain's Jobs For America Economic Plan

"[P]olicies that affect long term-supply, like the McCain strategies for increasing exploration and production, or strategies that reduce demand in the-long term, incentives for new technology for example, have an immediate impact on today's prices." -- Martin Feldstein

U.S. Senator John McCain's presidential campaign held a press conference call with Carly Fiorina, former Hewlett Packard CEO and Victory 2008 Chair, Meg Whitman, former eBay President and CEO, Martin Feldstein, Harvard University George F. Baker Professor of Economic and former National Bureau of Economic Research President and John Taylor, Stanford University Mary and Robert Raymond Professor of Economics, discussing John McCain's Jobs for America economic plan:

Carly Fiorina: "As you know our economy faces very serious challenges. And John McCain for the last several weeks and months now has been talking with the American people about his plan to get our economy moving again. His Jobs for American plan is rooted in his fundamental belief that the role of government is to unleash and unlock the creativity, ingenuity and the hard work of the American people and make it easier to create jobs. This is critically important. He has proposed a whole set of things that make it easier to create jobs including a focus on small business. As we know small business is the engine of growth of this economy. Small business creates about two-thirds of the jobs in this economy. And even in the last economic report which was of course quite difficult, it recognized that over 400,000 people have lost their jobs in the first six months of this year.

"And yet, one of the bright shining spots in the economy was small business that created over 230,000 thousand jobs. That's why John McCain wants to make it easier for small business to access capital by keeping the tax rate on capital gains and dividends low. It's why he proposes a depreciation schedule that allows small business to invest in capital equipment and technology and offsets office expenses in the first year. It's why he proposes a portable affordable healthcare plan rather the saddling small businesses with a huge $12,000 payment for a government mandated health proposal for every employee with a family as Barack Obama would do.

"It's also why he has focused so much on the job creation potential of his energy plan, which Martin Feldstein will talk more about in just a few minutes. I think in this particular case the contrast between John McCain and Barack Obama could not be more clear. American families are worried about rising gas prices. They are worried a deteriorating job market. They are worried about shrinking retirement portfolios, and they are worried about falling home prices.
"John McCain's Jobs for America plan is a real strategy to create millions of good American jobs, to ensure our nation's energy security, to get the government's budget and spending house in order, to provide access to affordable health insurance, to bring relief to American consumers, and to allow more Americans facing foreclosure to stay in their homes. Also, in great contrast to Barack Obama, John McCain knows that one in five American jobs depend on world trade, 20% of our jobs rely on world trade. And that's why John McCain would make sure that our workers and our businesses remain the most competitive in the world that they have access to the consumers of the world 95% of whom are outside the United States.

"It's one of the reasons as well he has proposes a comprehensive reform of unemployment insurance programs. Our unemployment insurance programs were designed in the 50's. They no longer meet the needs of the 21st century. His reforms would focus not simply on paying workers who have lost jobs but are as well on preparing those workers to take on new jobs with new skills. As you know, hard-working Americans are also suffering from high gas prices and need relief now and that's why John McCain has proposed for several months now the suspension of the federal gas tax. Barack Obama has opposed that I think on issue after issue. Barack Obama is on the wrong side of job creation and that concerns American families. He would tie small business up in taxes and Washington directed mandates he would discourage job creation at a time when America needs to create jobs urgently.

"He would as well raise the capital gains tax as Americans watch falling markets shrink their retirement savings. Barack Obama, in essence, in a difficult economic time, would raise taxes and become an isolationist protectionist. Those are exactly the wrong times in a difficult economic time. John McCain will spend this week as he has every week for the past couple of months out talking with the American people about how to get our economy working again how put Americans back to work again and how to make sure the government is helping to unlock and unleash the ingenuity and hard work of the American people -- not getting in the way of job creation and growth."

Meg Whitman: "I would only underscore three points. One is that John McCain's policy is all around creating jobs. That is the number one priority for the tax policy, all other policies are designed to how do we really create good jobs for Americans going forward.

"Second, most the jobs that most of you know on the call come from small business -- 70% of new job creation in the U.S. comes from small business. So making sure that we have small business friendly policies is very central to John McCain's policy.

"And then third, and this will be a perfect lead in for Marty, is that you can't talk about our economy and the challenge it faces without talking about energy. Because with the high price of oil, the high price of gasoline ... it has filtered into food prices, shipping prices, everything that is driven by oil, which is just about everything we consume is. So we have got to have a national energy policy that is smart, is intact, and makes a ton of sense because if we don't, we're going to have a lot of trouble over time making sure that our economy grows again."

Martin Feldstein: "I want to focus specifically on the issues about the price of oil because as you know and you've just heard again the high price of oil is a serious drag on the economy. It reduces the real income of households. In other words, it reduces their standard of living. It reduces their ability to spend on other things and that is dragging down overall economic activity. And what Senator McCain has proposed is a long-term strategy with a number of different parts, but the emphasis is both on increasing supply and reducing the demand for gasoline used in automobiles. To increase supply, he focuses on increasing oil and gas exploration and production. And in terms of reducing demand for oil and therefore the price of oil the critical thing in the United States is that about two-thirds of all of our use of oil is in transportation, is in automobiles primarily and so improving incentives for automobile efficiency for new techno logy is a critical part of his thinking.

"Now many people have reacted to these long-term proposals by saying now what about the price of oil today?' So what I want to focus on is the fact that policies that affect long term-supply, like the McCain strategies for increasing exploration and production, or strategies that reduce demand in the-long term, incentives for new technology for example, have an immediate impact on today's prices. Something's that going to change the supply and demand five years, ten years, twenty years from now will have an impact on today's prices. The reason for that is that if an increase in long-term supply or reduction in long-term demand is perceived by investors and by the oil industry and others as changing the future price of oil, that changes their incentives today in terms of the inventories they accumulate and the prices they charge. If the price is going to be lower in the future because of more supply and less demand that price is going to come down in the future, that gives producers and others an incentive to sell more today rather than hoarding it, inventorying it, or failing to bring it out of the ground. An that's an incentive that affects not just American firms but also the Middle East oil providers who look ahead and see policies coming into place which are going to affect the demand and supply over the long term, and we've already seen it in recent day as the price of oil has come down substantially.

"I think the key thing to understand, and to communicate to readers, is that policies that aim at the long term will have this favorable short term affect on prices."

John Taylor: "Let me just mention some contrasts with Senator Obama. I think on the taxes it couldn't be greater. I just don't see how anybody can think of raising taxes in weak economic times like this and that's a key part of what Senator Obama has proposed. In contrast, Senator McCain wants to prevent taxes from increasing on small businesses, on capital gains, on dividends and also wants to give a reduction in taxes on a corporate level and business level so that American firms can compete abroad and create jobs.

"Second, I would say that on reducing the growth of government spending Senator McCain wants to stop the spending binge that we've had, restore trust in government operations, reduce the budget deficits. Very important, he has the most credible plan out there to reduce the budget deficit and bring it into balance by 2013 by reducing the growth of spending and making these very sensible tax changes, which will get the economy and jobs growing again.

"A third I would mention, on international opening of markets. Senator Obama has called into question trade agreements, doesn't want to sign the ones that are out there already. Senator McCain wants to create jobs by creating more export opportunities for American workers.

"Go right down the line to make sure workers are in good shape. [John McCain's] proposed health care tax credit for portability. He's suggested big improvements in our education system focusing on the poorest urban areas in the NAACP speech. So right down the line, its everything that I see in Senator McCain's proposals is for creating jobs getting American growing and it seems on every issue Senator Obama is on the opposite side which goes in the other direction."

Listen To The Full Conference Call

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