© National Journal Group Inc.
Friday, Feb. 29, 2008

More On Holtz-Eakin • Inside Washington: McCain Ready To Drop Funding (2/29/08) • Related Story: McCain Adviser Details Plans For The Future -- And For A Break (2/29/08) More stories from this issue

Douglas Holtz-Eakin, the chief economic adviser and de facto policy director for Sen. John McCain, sat down with National Journal correspondents John Maggs and Alexis Simendinger on Feb. 27 to discuss the Republican candidate's campaign. Holtz-Eakin served as director of the Congressional Budget Office from 2003 to 2005. Excerpts follow.

Holtz-Eakin: We don't know.

Q: What are you hoping it means? It doesn't sound like he wants to live within public funding limits.

Holtz-Eakin: Well, he's clearly run away from his pledge to take public financing. So we have no expectation he's going to adhere to it. If Obama wants to do that, we'll raise money and campaign against him.

Q: So if he renounces public financing, then you will also?

Holtz-Eakin: Yes, and if he doesn't we won't. I think we can beat him either way.

Q: So if he raises money, can you be competitive?

Holtz-Eakin: Definitely. We did better in January than we did in the previous six months. We got money in every way -- directly, through the Internet, through fundraisers. I mean, Obama is a money machine. He's the most gifted performer in American politics.

Q: It sounds like you want the public to realize that [McCain] is not Bush III?

Holtz-Eakin: He's nothing like Bush. It would be hard to characterize the last seven years as him marching in lockstep with President Bush.

Q: And McCain hasn't been marching in lockstep on the economy?

Holtz-Eakin: That's absolutely true on the economy.

Q: Give us some examples.

Holtz-Eakin: Energy policy. Climate policy. Education policy. We're going to have rollouts on that. We're going to spend a lot of time in late March, all of April and early May, sort of going through the issues. Quite frankly, he's been running nonstop since he got on a plane to New Hampshire, so he's going to spend a lot of time resting -- but then again he doesn't seem to need rest -- but more than that, sitting down and fleshing out some of the details. It is hard to get all the stuff put together in a way that he's happy with it with little snippets on phone calls. You know, 15 minutes in the car between one event and another. You don't get to sit at a table and say, "OK, here's what we have: American families live these beautiful, multidimensional lives, with environmental, health, educational, economic components. How do we knit together what you would like to accomplish?"

Q: McCain has said that one of the reasons Republicans haven't turned out in recent elections is because they are unhappy with the lack of spending restraint in Washington. Is that true?

Holtz-Eakin: Absolutely. If you want to see a standing ovation, mention that. There is the amount of it, which is mind-boggling. And there is the fact that once you spend it, you are going to have to pay for it. You can't fool Mother Nature, and one of the reasons that entitlements are so threatening is that if you don't control that spending, you will ultimately have to cripple the U.S. economy with a staggering tax increase. [McCain] doesn't want to go there.

There are Republicans in jail, former members of Congress, and that is over the spending process, the earmarks, the corruption this has bred. There is political corruption, and there is absolute criminal corruption. And for McCain, it is: I have fought this for 20 years for exactly these reasons.

Q: As you look to the general election, Senator McCain has already acted as though it will probably be Obama he's up against. How would you describe Obama's approach to the economy?

Holtz-Eakin: Most of what Senator Obama has proposed, quite frankly -- a $10 billion fund for housing, new regulations for housing, new regulations for credit cards -- it isn't going to affect the future. He may be talking about change, but he's not talking about progress. He's talking about yesterday. A lot of his proposals reek of yesterday -- 1970s-style reinvestment banks, $100 billion for green technology. The venture capital in Silicon Valley dwarfs that, and they are all over this stuff. So I think that people are sophisticated enough to recognize that you can't just start promising a bunch of stuff. You have to have a vision of how this is going to work, and be cognizant of what has failed already, and be cognizant of what you don't need to do in the government sector.

I want to find a defining logic to the Obama proposals. I don't know what a $50,000 exemption from taxes [for seniors] does because that is going to include a lot of income that comes out of tax-deferred savings accounts that has never been taxed. I promise you that if a right-winger like me proposed that, people would say, "What were you thinking?" I don't know what it means. It also means that rich people still get the first $50,000. I don't get it.

Q: What's today's word on what is going to happen with the FEC?

Holtz-Eakin: This is much ado about nothing.

Q: How is that going to get worked out?

Holtz-Eakin: Once the complaint is filed, we're in a much better place. There is a process for dealing with a formal filing.

Q: You can run out the clock?

Holtz-Eakin: The process involves the discovery of the truth. This is not an issue.

Q: Does this process take months?

Holtz-Eakin: If they don't fully staff the FEC, it could take a long time. This is another example of, why should the American people trust the way their government operates? There is a whole lot of stuff to be embarrassed about.

Q: Senator McCain has a reputation for working with Democrats in Congress. Do you expect that 2008 is going to be a bad year for Republicans in Congress? If Senator McCain is president, would he reasonably expect that he would be working with a Democratic Congress with more seats?

Holtz-Eakin: We'll see. I think it is premature to make the call...

What was important to Republican primary voters was electability, and the electability that mattered was not losing New York by less than someone else would -- which is how Giuliani put it -- but McCain won purple states. And the key question is, will we win those against who the Democratic nominee turns out to be? Will we help Republicans win as well?

Q: Would you concede that divided government would be a challenge for Senator McCain?

Holtz-Eakin: I think the record of undivided governance suggests that we should be cognizant of the pitfalls on both sides.

Q: And Senator McCain has a good shot at working across the aisle?

Holtz-Eakin: Of course he does. It almost goes without saying.

Q: When you put together your economic policies, are you quite aware to not overpromise what you can get through Congress?

Holtz-Eakin: Look, he is realistic, he is pragmatic, skilled, he's a problem-solver. But one of his stated objectives is, when you run for president, you don't point out what the first 100 yards looks like, you talk about where you want to be, where you want to take this nation. And in those aspirational goals, I don't think the committee composition of the Congress should enter into it. You should have a vision for where American ought to go.

Q: Well, after the 2004 election, President Bush and Karl Rove thought: Private accounts, we think that's the right thing for America, Americans are going to go for that in a big, big way.

Holtz-Eakin: I don't think that private accounts constitute a comprehensive vision for the future of America. [Bush] didn't campaign on it, he campaigned on Social Security reform. He didn't talk about the specifics of how he would do it, and the specifics didn't match the campaign, and it all fell apart.

Q: So that is the key?

Holtz-Eakin: You got to do what you campaign on. McCain has promised to veto any bill with earmarks... That is a big promise.

[ Insider Interview Archives ]