McCain Pledges to Balance Budget in First Term

July 7, 2008— -- After yet another campaign staff shake-up, Sen. John McCain, R-Ariz., will try to repackage his economic plans by promising to balance the federal budget in four years.

The bold declaration -- which McCain will make during a Denver town hall meeting as part of a weeklong tour of swing states -- is part of his efforts to be perceived as the candidate who can manage the economy; the economy has become voters' overwhelmingly top priority, and it offers a way for McCain to dramatically differentiate himself from President Bush.

McCain Refocuses on Economy

McCain's Jobs for America tour is also intended to shake the image that McCain lacks knowledge about the economy, a view the presumptive Republican presidential candidate has fed with his own comments.

The latest ABC News poll indicates Americans trust Sen. Barack Obama, D-Ill., to handle the economy better than McCain, 52 percent to 36 percent.

McCain and Steve Schmidt, the new official managing the day-to-day operations of McCain's campaign, know that has got to change.

At a town hall meeting in Denver, McCain vows to balance the federal budget by 2013, which would be the end of his first term as president.

The federal deficit is currently projected by the Congressional Budget Office to hit $443 billion by 2013, assuming the Bush tax cuts are extended.

McCain will argue that his ambitious goal of balancing the budget can be attained through five main points: economic growth spurred by the elements of his economic plan, eliminating congressional budget add-ons called earmarks, offering private Social Security accounts for younger Americans, withdrawing troops from the Middle East and freezing or slowing discretionary spending.

McCain has vowed before to balance the budget by 2013, and then backed off that.

Appearing on "This Week With George Stephanopoulos" last April, McCain was asked if he was sticking to his 2013 balanced budget deadline.

Instead of sticking to the promise, McCain said "that would be the goal."

"We will have made a long progress toward it," McCain said, being less emphatic about the deadline. "Now, if economic conditions continue to deteriorate, it's going to be harder, but we're going to be on a path to a balanced budget."

The Obama campaign, which will also concentrate on the economy this week starting with an event Monday in Charlotte, N.C., was silent this morning on McCain's proposal. But Jason Furman, Obama's economic policy director, told Politico that McCain's promise to balance the budget in four years was "preposterous."

Small Business, Lower Corporate Taxes

McCain's economic formula places the emphasis on making it easier for small businesses to expand. It also includes lower corporate taxes, opening more markets to American products and what he calls the Lexington Project -- jobs focused on new energy technologies.

The McCain campaign produced a letter today signed by 300 economists endorsing his plan.

But Stuart Rothenberg, who runs the Rothenberg Political Report, told "Good Morning America" Monday that the McCain plan remains a tough sell.

"He has fallen into more of a typical generic Republican message, and that's not a good place to be with a bad economy and an unpopular president," Rothenberg said.

Obama has attacked McCain's economic proposals.

In Zanesville, Ohio, Obama recently ripped into the proposals by claiming "John McCain wants to provide $300 billion in more tax breaks to corporations and wealthy CEOs."

The Obama camp has also put together a Web video of McCain downplaying his own economic expertise, with quotes like "I can't come down and give you a specific solution because I don't claim to be smart enough," and "I am not an expert on Wall Street. I am not an expert on some of this stuff. I don't have that kind of expertise."

ABC's Sunlen Miller and Ron Claiborne contributed to this report