McCain ally ties Obama to Bush policies

WASHINGTON - President Bush's policies on the economy, other than on taxes, have been a failure, according to the top economic-policy adviser to John McCain, the presumptive Republican nominee.

Douglas Holtz-Eakin said the only similarity between McCain's economic plan and Bush's was a commitment to keeping taxes low.

"Sadly, it seems that is all President Bush understood in the economy," Holtz-Eakin said in an interview to be broadcast this weekend on Bloomberg Television's

Conversations With Judy Woodruff

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It is Barack Obama's budget plan, not McCain's, that resembles Bush's policies, he added. "It's dedicated to the recent Bush tradition of spending money on everything."

This is the latest and most aggressive effort by the McCain campaign to distance the candidate from the unpopular policies of Bush, whose approval rating is hovering near 30 percent in most polls.

Illinois Sen. Obama, the presumptive Democratic nominee, often likens a victory in November for Arizona Sen. McCain as a third Bush term.

Dan Tarullo, an economic adviser to Obama who was also interviewed on the program, defended Obama's plan to reopen the North American Free Trade Agreement, or NAFTA, to add new environmental and labor standards. He also backed getting tougher on China for its trade policies.

Analysts have criticized those plans, saying they may undermine U.S. trade relationships and curb export growth.

Renegotiating NAFTA "is good for our workers in all three countries and it's good for the environment in all three countries," said Tarullo, a professor at Georgetown University in Washington.

Holtz-Eakin disagreed, saying that reopening the trade pact would harm the image of the United States in the world after it had already been "damaged" by Bush.

Holtz-Eakin, a former director of the Congressional Budget Office, defended McCain's tax plans, which include extending Bush's tax cuts, reducing the corporate tax rate and repealing the alternative-minimum tax.

McCain would offset any revenue lost from those cuts by reexamining the federal budget and vetoing earmarks, to reduce spending.

"That plan, when appropriately phased in, as it has always been intended to be, will bring the budget to balance by the end of his first term," he said.

Budget watchdog groups such as the Concord Coalition have said that is unlikely because of a large imbalance between the size of the tax cuts McCain proposes and the spending reductions he cites to offset them.

A Bloomberg News analysis of McCain's budget, which was released in April, shows it would increase the national debt by $1.8 trillion over eight years. The Center on Budget and Policy Priorities and the Tax Policy Center estimate the cost to be even higher.