On Friday morning, I am going to moderate what promises to be an enlightening discussion of the spending plans of the major Presidential candidates. Panelists will be Rudy Penner of The Urban Institute, Jim Horney of the Center on Budget and Policy Priorities, Maya MacGuineas of the Committee for a Responsible Federal Budget, and Bill Hoagland of CIGNA (and formerly the top budget guru for ex-Senate Republican Leader Bill Frist).

We had fun ridiculing the idea of suspending the gasoline tax for the summer, but the gas tax holiday was minor mischief compared with the newest idea for dealing with the financial market meltdown: a two year holiday on capital gains taxes.

Earlier this week, both the House and Senate passed measures establishing generous tax credits for electric plug-in cars. The Senate plan gives consumers a credit of up to $7,500 for the purchase of a plug-in car, while the House plan offers consumers a credit of up to $5,000. Under both plans, the value of the credit increases with the battery capacity of the vehicle, meaning that more efficient cars receive larger tax credits.

In a previous post, Len Burman reported that a substantial portion of Senator Obama’s non-health tax proposals would be provided as net refunds, over and above income tax liability. This is a key difference from Senator McCain, whose proposals would mostly benefit taxpayers (and mostly those with high incomes).

Barack Obama and John McCain are slowly beginning to get it: For the next President, this week’s financial market meltdown has changed everything. Suddenly, their grandiose promises of new tax cuts and ambitious spending are sounding more hollow than ever. An $11.3 trillion national debt will do that to you every time.

The Bush Administration has asked Congress to write the biggest blank check in the history of the planet. And Congress may very well do it. The Administration’s proposal requires only semi-annual reports to congressional committees and explicitly exempts any bailout-related actions from judicial review. This has a whiff of the war on terror about it. “We are in a crisis,” the Administration cries, “and you must act now. Do not stop and think. Do not amend. Just approve what we say or we will blame you for what happens next.”

Crumbling financial markets mean more awful news for governments already reeling from an economic slowdown and mortgage foreclosures. The only glimmer of optimism is that the sluggish revenues and rising spending that are around the corner should only be transitory. Assuming the markets and the economy rebound, these fiscal shocks will be a fading memory after a few years.

Just when we thought the bailouts were over, just when Fed Chairman Ben Bernanke and Treasury Secretary Hank Paulson insisted failing financial institutions would, like Lehman Brothers, sink or swim on their own, along comes AIG. Make no mistake, the Wall Street financiers called Bernanke and Paulson’s bluff. After the two men said Washington would not throw taxpayer money into the AIG pot, the big money guys went all in, insisting they would not rescue the rapidly-sinking financial services giant without cash from Washington.

In January, the Congressional Budget Office projected that the federal budget would maintain rough fiscal balance over the coming decade. Last week, CBO updated that forecast and found that the government would run a cumulative $2.3 trillion deficit. That sharp change reflected a slowing economy and rapid spending growth.

Should clergy have the right to stand up in their tax-exempt pulpits and endorse political candidates? For a half century, the answer has been no. But The Washington Post's Peter Slevin reported on Sept. 8 that a conservative group called the Alliance Defense Fund wants to change that.