For the past three weeks, the debate over whether to bail out the financial services industry has dominated the headlines and campaign talking points. Both Republican John McCain and Democrat Barack Obama addressed the economy during visits to Minnesota and Wisconsin.
"A lot of you have the economy on your minds so let's start here, a vote for me will guarantee immediate pro-growth action, tax cuts for America's hard working families," McCain said. "Strong support for small businesses which are the backbone of the economy."
"People have asked whether the size of this rescue plan together with the weakening economy means that the next president will have to scale back his agenda," Obama said. "The answer is yes and no. With less money flowing into the treasury, some useful programs, and programs that I have proposed on the campaign trail, will have to be delayed. But there are some certain investments in our future that we cannot delay precisely because our economy is in turmoil."
Even before the bailout bill passed, nonpartisan tax analysts said the tax plans put forth by both candidates would significantly increase the national debt over the next 10 years. Now the debt facing the next president is even bigger.
"There's certainly an outflow right now that worsens the fiscal situation and doesn't make the prospects for fiscal responsibility any better than a month ago," said the Tax Policy Center's Roberton Williams on the financial rescue package. "In fact they make it much worse."
Both candidates have said on the campaign trail that they're willing to make some sacrifices in light of the bailout bill but won't revamp their top initiatives like tax cuts, health care and energy spending.
Obama is still pushing a second stimulus package of $50 billion. He is also proposing to cut taxes for low and middle class Americans. He wants to raise taxes for individuals making more than $200 thousand a year and couples who make more than $250 thousand a year.
Obama's economic policy adviser, Jason Furman, said Obama's plan would revive the economy from the bottom up.
"His economic philosophy is the way to achieve broad, widely shared growth is from the bottom up," he said. "By investing in people, by empowering people. Helping them go to college, helping them save, helping them invest and get a job. All of that will then unleash the power of ordinary Americans to generate our economic growth."
Obama has proposed some spending cuts such as drawing down U.S. troops from Iraq, eliminating waste and fraud in Medicare and Medicaid and opening bidding on most government contracts.
Obama told reporters last week that he won't be able to balance the budget in the first two years of his administration.
"We will be living within our means," he said, "but what we can't do is close all of the hole that we've gotten ourselves into over the last eight years overnight. It would be too drastic and there are some core investments that we have to make on things like energy. So what we're doing is making sure that the deficit is not increasing and then over the course of four years under my administration slowly reducing it."
John McCain's tax plan would cut taxes for all Americans. The plan would provide larger tax cuts for wealthier people. Middle class households would see an average tax cut of $319.
McCain's economic policy adviser Douglas Holtz Eakin said McCain's tax plan is designed to create more jobs. It would make the Bush tax cuts permanent, reduce the corporate income tax rate and provide other incentives for small businesses.
"At this point every policy is viewed through the lens of creating jobs for American workers," he said. "The climate in the United States is one where we need jobs for the foundation of a stronger housing market, which is the foundation of the ability to finance higher education. And as a result jobs are the most important issue."
When asked about the budget deficit, Holtz Eakin said McCain can maintain all of the Bush tax cuts and reduce the deficit.
"There's simply no substitute for getting the economy growing, getting people in jobs," he said. "That would be the best thing for the deficit as well. The remainder of Sen. McCain's approach to getting the deficit under control has been built on spending controls, not increasing spending."
But The Tax Policy Center's Roberton Williams said McCain's plan to balance the budget is overly ambitious. He said McCain's tax plan would increase the debt by $5 trillion over the next 10 years.
"That would require essentially zeroing out all nondefense discretionary spending," he said. "If you protected the military and the entitlement spending that we have, Medicare and Social Security and the like, you would have to essentially get rid of all other federal spending in order to balance the budget which is a hard order to fill."
The size of the deficit and a struggling economy could be a double edged sword for the next president. It would make it harder for him to keep his promises. But voters may be less likely to punish the president for not keeping campaign promises the taxpayers clearly can't afford.