Asked About the Deficit, McCain Cites Reagan’s Example

From the NY Times Blog:

"When Senator John McCain was asked here this afternoon how he plans to balance the budget, he said that he hoped to do so by stimulating economic growth – and approvingly cited the example of President Ronald Reagan.

There was one thing he did not mention during his response: the deficit nearly tripled during the Reagan presidency, partly due to tax cuts and increases in military spending.

The exchange occurred at a town-hall-style meeting held in a tent outside Bridgewater Associates, an investment firm. A member of the audience stood up and asked Mr. McCain, who has called for balanced budgets, how he plans to do it.

“Basically, which is it?” the man asked Mr. McCain. “Straight talk: Do you want to raise taxes, cut entitlement spending, cut defense spending, or have a deficit?”

Mr. McCain did not explain how he plans to balance the budget, but spoke generally about hoping to stimulate the economy – and cited President Reagan.

“I don’t believe in a static economy,’’ Mr. McCain said. “I believe that when there’s stimulus for growth, when there’s opportunity, when people keep more of their money — and the government is the least efficient way to spend your money — that economies improve.’’

“When Ronald Reagan came to office,’’ he said, noting that few in the audience were old enough to remember, “we had 10 percent unemployment, 20 percent interest rates, and 10 percent inflation, if I’ve got those numbers right. That was when Ronald Reagan came to office in 1980. And so what did we do? We didn’t raise taxes, and we didn’t cut entitlements. What we did was we cut taxes and we put in governmental reductions in regulations, stimulus to the economy, and by the way, Jack Kennedy also did that as well – and so my answer to it is a growing economy. And I think you best grow the economy by the most efficient use of the tax dollar.’’

Mr. McCain – who has said that he wants to balance the budget while making the Bush tax cuts permanent, cutting additional taxes, and keeping troops in Iraq – said: “I believe we can grow this economy, and reduce this deficit.’’

He said that he expected expense in Iraq to decline as the Iraqis shoulder more of the burden, and he also hinted at some cuts in federal programs.

He noted his opposition to the expensive Medicare prescription drug benefit, which he voted against. “Now you are paying for my prescription drugs,’’ he said. “Why should that be? Why should that be? Why should that be?”

But he said he thinks the problems can be solved. “Is it going to be tough? Yes. It’s going to be very, very tough.’’

Earlier, when he was asked if he plans to resign from the Senate this summer to make it easier for a Republican to win the election to succeed him, Mr. McCain said: “No, I will not. I have every confidence that there are a number of Republicans who would be elected. I do not envision a scenario of resigning my seat.’’

But then, on reflection, he seemed to open the door to the idea at least a bit. “But I would go back and think about it, and think about the scenario that you just described,’’ he said. “Right now my intentions are to remain in the United States Senate. ‘’