The Holtz-Eakin Gap?


Douglas Holtz-Eakin was introduced to me years ago at a dinner of friends organized by Democrat and economic wunderkind Adam Posen who is a senior staff member at the Peterson Institute for International Economics. I liked him instantly and still do.
I say that hesitantly because too much blog-hugging from TWN can hurt the perceived legitimacy of people on the right and the left that I have supported and endorsed in the past. I once tried to help R. Nicholas Burns out in a possible bid to move up to the vacant Deputy Secretary of State post by doing a hit job on him. Many of my readers excoriated me — but when I ran into Nick Burns at the British Ambassador’s home, he walked up and said, “I knew what you were trying to do — and thank you.” I like the complex thinkers.
But Holtz-Eakin, who is now exploring the flora and fauna of Wasilla, Alaska, was perhaps one of the least partisan directors of the Congressional Budget Office in its history — though I’d give high marks to the incumbent Peter Orszag as well.
For a very long time — both before John McCain’s campaign melted down in the John Weaver-McCain split and then again when it was resurrected under Rick Davis — Holtz-Eakin has been the domestic policy adviser to John McCain’s campaign.
I know him. He’s a straight-shooter, but Joe Klein is trying to tease out a real gap between what the straight-shooting, straight talk express type guy Holtz-Eakin is on fiscal and tax issues and contrast them with the apparently less straight-talking than he used to be John McCain.
Holtz-Eakin apparently told Fortune columnist Matt Miller:

“It’s arithmetic.” Federal revenue today is 18.8 percent of GDP and federal spending is 20 percent. Holtz-Eakin observes that “the pressure are there” to lift spending [on entitlement programs, mostly] and taxes to 23 or 24 percent of GDP by around 2020, and to as much as 27 percent if health costs remain out of control.

Then, Klein and Mark Halperin’s “The Page” contrast this with another statement from Holtz-Eakin:

Asked why Republicans still insist they’ll cut taxes, he says, “It’s the brand, and you don’t dilute the brand.”

I am told by someone close to the amiable Holtz-Eakin that one of the odd things about these pair of quotes is that they were most likely made in very different venues, perhaps years apart. (I haven’t confirmed this with Matt Miller but the assertion was made by someone close to Holtz-Eakin to me)
I have to admit that I occasionally dig into the work and thinking of campaign staff advisers as well because they are “general” benchmarks to help understand the thinking and direction of a candidate. I think Jason Furrman’s work and appointment was an interesting benchmark to understand some aspects of Obama’s economic thinking. I think that knowing that Randy Scheunemann is a key adviser to McCain is also essential to understanding McCain’s vector on foreign policy.
But they don’t explain everything, not by far — and it may not be completely fair to make the candidate responsible for the views of his staff. They are not the same, not identical.
This reminds me of a story that Henry Kissinger has told on a few occasions — usually at Nixon Center dinners I have attended.
Kissinger states that when he was serving as Nelson Rockefeller’s foreign policy adviser in his campaign in the 1968 race, he was reluctant to join Nixon who had called to have a meeting with him after Rockefeller had been knocked out of the Republican primary by Nixon.
Kissinger apparently called Rockefeller and asked what he should do – hoping to remain loyal to Rockefeller and also cognizant that he and Nixon may not be on exactly the same policy page.
According to Kissinger, Nelson Rockefeller said “Of course go see him. Nixon is taking a hell of a bigger chance on you — than you are on him.”
That’s the way it is between advisers and candidates. They are not identical and shouldn’t be weighed that way.
But it is interesting to know that Holtz-Eakin is now going to provide some key policy support for Sarah Palin.
Now that gap — thin or big — would be fun to know more about.
And also, could someone up with Doug Holtz-Eakin in Wasilla send me a picture of him with a totem pole?
— Steve Clemons


9 comments on “The Holtz-Eakin Gap?

  1. Steve Roth says:

    You’ve undoubtedly seen this document:
    The “gap” between McCain’s promises and what his own staff says is…profound.
    Worth reporting?


  2. alan says:

    It is wonderful to see that you try to be thoughtful, fair and understanding of the people who inhabit both sides of the political divide. But you play an inside game; and to remain there you appear to go along to get along. For some time now I am having a problem understanding what you stand for. If there are so many noble fellows and gals in Washington why haven’t they spoken out against the depredations of this Admin? Why all the pussy footing. That’s what gives Washington a bad smell. Too much clubbiness, to many in house dinner parties, too many chummy asides.
    Look at the country as a whole. It’s in a mess. What have also these wonderful people done to ameliorate things. The man in the White House obviously went his own way and the thoughtful types seem to wring their hands or wash them, I guess.


  3. Linda says:

    I’d just like simple and straight answers to three questions that McCain-Palin seem to gloss over when they talk about reducing spending:
    First, pin them down on what per cent of the federal budget earmarks are. I only know that it’s very small, even if the discretionary budget.
    Second, then ask if they intend to eliminate all of earmarks or just a part of them.
    Third, then ask about oversight and control of DOD budget. My understanding is that on OMB Management Scorecard, DOD consistently has been graded “F” on financial management. Do they have a plan to get rid of waste, fraud, and abuse at DOD? Do they plan to close any of our military bases around the world?
    I don’t care about what their economic and domestic advisors said over the years, and I don’t think most voters do either. I just want more precise answers about their plans.


  4. JohnH says:

    Holtz-Eakin may be a “straight shooter,” but the quotes don’t characterize the situation well. Yes, entitlement spending may increase by several percent of GDP in the next 12 years, but THE BABY BOOMERS ALREADY SAVED THE MONEY TO COVER IT. The problem is that Bush looted the Social Security Trust Fund to pay for his wars, to lavish funds on no-bid contracts for merchants of death, and to expand Homeland Security.
    Bush increased “Defense” spending by several percent of GDP, but who noticed? For the political class, the was just business as usual.
    Now the chickens are coming home to roost. Soon payroll taxes will no longer generate a surplus to be looted. Soon the operating budget will have to pay for itself or on funding from Russia, China and Japan. Soon people will be demanding that payroll taxes collected over the last 20 years, generating a huge Social Security Trust Fund surplus, be returned as retirement benefits.
    And the right wing noise machine, their think tanks, and hired pens will go nuts. How dare they increase federal spending by several percent of GDP?
    It’s only when the money is directed to people (Social Security, Medicare), not corporations and wars, that suddenly it’s a problem. How dare people expect to get back the payroll taxes that they were forced to pay for the past 20 years?
    May this issue will finally force the Baby Boomers out of their torpor and instigate real accountability and change in the predatory behavior of the political class.


  5. Mr.Murder says:

    Nicholas Burns should be part of the new administration, which ever candidate wins.


  6. JackieKS says:

    I just listened to Left, Right and Center which Matt Miller moderates, twice to make sure I have this right. Holtz-Eaken told him taxes were going up, no matter who won the election. I got the impression H-E made the tax reduction comment because it is all McCain/Republicans have, it’s the “brand”. Interestingly, they were talking about the socialized bailout of FM/FM, and Robert Scheer said McCain is up his necks in these kinds of government bailouts. Savings and Loan bailout anyone? McCain was up to his neck in the Keating Five.


  7. Steve Clemons says:

    Respect your views Frank C — but I think Doug Holtz-Eakin is a thoughtful, competent, balanced person. We don’t agree on everything — but he’s my sort of policy analyst and my sort of political player.
    I was not a fan of Senator Phil Gramm who also played an advisory function for McCain — and I feel it’s useful to show the differences between advisers, their views contrasted with each other inside a campaign, and contrasted with candidates.
    I’m not automatically negative on everything on one side of a line or another — that’s not what my blog and policy approach is about. I always work across the aisle when I can — particularly as I’m an Independent and have been honest that Chuck Hagel was my favorite for the presidential race.
    Unfortunately, Chuck Hagel didn’t let me have the chance to organize the nation on his behalf.
    All the best,


  8. Frank C. says:

    Steve, all of these guys hate government. They will do anything they can to weaken it.
    Just watch (hopefully we won’t have a chance to watch.)
    Your personal likes and dislikes of personalities must be discarded. There are plenty of nice likeable conservatives who believe government must be weakened at all costs.
    Someone like Holtz-Eakin is probably there merely as a bridge to different people. If you think someone like HoltzEakin would be calling the shots, you are on drugs. He’d be like Colin Powell in Bush’s cabinet. A feckless symbol, with minimal influence.


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