McCain proposes gas tax holiday

John McCain called today for a federal gasoline tax holiday this summer, his latest proposal to shore up the faltering economy and show he is in touch with struggling Americans.

The suspension of the 18.4-cent federal gas tax and 24.4-cent levy on diesel fuel would go from Memorial Day to Labor Day. Gas prices are headed to record highs this summer approaching $3.50 a gallon for regular unleaded.

"The effect will be an immediate economic stimulus -- taking a few dollars off the price of a tank of gas every time a family, a farmer, or trucker stops to fill up," he said in prepared remarks. "And because the cost of gas affects the price of food, packaging, and just about everything else, these immediate steps will help to spread relief across the American economy."

Speaking at Carnegie-Mellon University in Pittsburgh, where Democrats Hillary Clinton and Barack Obama pledged Monday to manufacturers that they will be tough on trade deals to protect American workers, McCain also warned that the Democrats' proposals to let President Bush's tax cuts end would amount to a huge tax hike. He also proposes a complete phase-out of the Alternative Minimum Tax that is hitting a growing number of middle-class families.

Clinton and Obama say they would let the tax cuts for wealthier Americans sunset and use the money to fund healthcare, among other programs. McCain initially voted against the tax cuts, saying they weren't accompanied by spending cuts, but now supports keeping them in place.

UPDATE: Obama campaign spokesman Bill Burton responded with a statement: "Senator McCain’s economic plan offers no change from George Bush’s failed policies by going full speed ahead with fiscally irresponsible tax cuts for the wealthiest Americans that John McCain himself one said ‘offended his conscience.’ He also proposes a gift basket of new tax cuts for corporate America at a time when some CEOs are making more in a day than some workers make in a year. John McCain’s plan is one that could have been written by the corporate lobbyists who run his campaign, and probably was."

UPDATE: Neera Tanden, a Clinton policy adviser, also criticized McCain's proposals. "Mccain is outlining an economic strategy that America cannot afford. It will bankrupt our government," she told reporters in a conference call.

While McCain hit the Democrats, he also hit a theme that Obama highlighted last week -- the growing gap between the pay of workers and corporate executives.

"Americans are also right to be offended when the extravagant salaries and severance deals of CEOs -- in some cases, the very same CEOs who helped to bring on these market troubles -- bear no relation to the success of the company or the wishes of shareholders," McCain said in prepared remarks provided by his campaign.

And the presumptive Republican nominee also has his share of criticism for the GOP, saying it has become too free-spending in Congress.

"In so many ways, we need to make a clean break from the worst excesses of both political parties. For Republicans, it starts with reclaiming our good name as the party of spending restraint. Somewhere along the way, too many Republicans in Congress became indistinguishable from the big-spending Democrats they used to oppose," he said.

McCain vows to veto excessive spending and to order a top-to-bottom review of the federal budget, with a one-year moratorium in increases in discretionary spending during the review.

"In my administration there will be no more subsidies for special pleaders, no more corporate welfare, no more throwing around billions of dollars of the people's money on pet projects, while the people themselves are struggling to afford their homes, groceries, and gas," McCain adds. "We are going to get our priorities straight in Washington -- a clean break from years of squandered wealth and wasted chances."

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