Commentary by Gene Sperlingune 6 (Bloomberg) -- Back in 2005, a friend asked if I should be careful about praising John McCain for his votes against George W. Bush's upper-income tax cuts in 2001 and 2003. After all, he warned, he might become the next Republican presidential nominee.
My reply was, suppose McCain maintained his position that, as he put it in 2001: ``I cannot in good conscience support a tax cut in which so many of the benefits go to the most fortunate among us, at the expense of middle-class Americans who most need tax relief.''
Suppose he did hold to his 2003 opposition to increasing the deficit through tax cuts during a time of war. On what grounds could I criticize him?
In spite of the advice from my friends, I went ahead and applauded McCain for both stands in my 2005 book ``The Pro-Growth Progressive.''
This is now a non-issue. McCain, who would like us to see him as holding a consistent and principled stance on tax cuts and fiscal discipline, is engaging in the mother of all economic policy flip-flops.
If McCain's opposition to Bush's tax cuts was based on the unseemliness of letting deficits balloon for the benefit of top earners in a time of war, then his opposition should have grown stronger. Instead, it grew weaker and then collapsed. Since McCain's votes, we have witnessed budget surpluses turn into projected $400 billion annual deficits.
How do those intervening developments lead McCain, the presumptive Republican presidential nominee, to now support permanently extending more than $100 billion in high-income tax cuts he once opposed?
Just the Beginning
And that is only the beginning. With the public debt expanding, corporate profits near records, and family incomes down since 2001, McCain has made his signature economic proposal a corporate tax-relief package that will cost $2 trillion to $3 trillion over 10 years.
In the New York Times on June 1, former Bush economic adviser Greg Mankiw defended this indefensible fiscal policy by pointing to two purely theoretical studies to posit that lowering the corporate-tax rate by a third is really about helping typical workers.
He didn't mention that the Congressional Budget Office, Treasury Department, and Joint Committee on Taxation all assume that the owners of capital get the benefit of a corporate-tax cut. He also neglects to mention that the CBO estimates that a whopping 59 percent of the benefits of such a reduction would go to the top 1 percent of earners.
This is more regressive than the policies that led McCain in 2000 to blast Bush for having ``38 percent of his tax cut go to the wealthiest 1 percent of Americans.''
I highly recommend you reading the entire piece