Amid an enthusiastic crowd, Democratic presidential nominee Sen. Barack Obama today rolled out an economic rescue plan that would provide immediate tax relief to middle-class families and put a 90-day moratorium on home foreclosures on mortgages issued by banks propped up by government intervention.
His wide-ranging plan includes an additional $25 billion to help automakers retool plants and jump-start production, two years of tax credits to companies adding U.S. jobs, extending unemployment benefits an additional 13 weeks -- a key provision in a state such as Michigan, with the highest unemployment rate -- and allowing penalty-free withdrawals from retirement and 401(k) accounts this year and next.
Taken together, Obama’s proposal, which mixes older campaign ideas with new ones like the retirement account withdrawals, provides a glimpse into the comprehensive approach the Democrat wants to take in dealing with the nation’s faltering economy. He called for such a plan to be enacted immediately, though with Congress on break and the general election just three weeks away, that’s a long shot.
His opponent, Republican presidential nominee John McCain, is expected to announce his own economic proposal Tuesday, the day before the final of three debates between the two. McCain has trailed Obama in several national and battleground state polls since the economy took center stage in the campaign.
Obama said his plan should be enacted now because the nation has already lost three-quarters of a million jobs this year and unemployment is on the rise.
“Today, I’m proposing a number of steps that we should take immediately to stabilize our financial system, provide relief to families and communities and help struggling homeowners,” said Obama. “It’s a plan that begins with one word that’s on everyone’s mind, and it’s spelled J-O-B-S.
“We can’t wait to help workers and families and community who are struggling right now -- who don’t know if their job or their retirement will be there tomorrow, who don’t know if next week’s paycheck will cover this month’s bills. We need to pass an economic rescue plan for the middle class, and we need to do it now.”
McCain, too, has called for immediate economic intervention to prop up markets, but one of his strategists, Doug Holtz-Eakin, and another key supporter, former Ohio Rep. Rob Portman -- who was also director of the Office of Management and Budget for President George W. Bush -- criticized the Obama plan today, saying it would cost too much.
“Americans were hoping that Sen. Obama would tell us that he has decided that the economy is bad enough that he wouldn’t go forward with his tax increases,” said Portman. “Instead, what we heard today were a lot of new promises for new spending. That’s not the way we’re going to get ourselves back on track. It will just make the situation worse.”
But Obama’s plan specifically called for cutting taxes on 95% of American workers, including anyone making less than $200,000 a year. Other refundable tax credits could return as much as $1,000 per family almost immediately.
Portman singled out Obama’s proposal to allow people to withdraw funds from their retirement funds without penalty as particularly dangerous.
“That would have people taking out their retirement savings and assets at a time when they’re likely to be at a very low value,” he said. “It seems like it would be the wrong thing to do, to encourage people to do this as they’re preparing for their retirements.”
Meanwhile, Holtz-Eakin said Obama’s $3,000-per-person job tax credit for employers who create jobs in the United States was an expensive proposition, costing $170 billion. But that’s less than the $300 billion proposed by McCain to buy up bad mortgages in order to prop up home values.
Of particular interest to metro Detroit, where the situation for automakers has gotten so bad that General Motors has talked to Chrysler about a merger, is the auto loan. Initially approved at $50 billion to retool plants and spark production, Congress ended up approving $25 billion of that amount last month. Obama’s plan calls for approving the rest immediately, and he says all options must be kept on the table to help domestic automakers “weather the financial crisis.”
Here are some of the details of Obama’s plan, according to documents released by his campaign:
“He’s the better candidate with the best ideas,” said Campbell, a Head Start employee. “A lot of people are disappointed by the economy and the direction of this country. Obama is lifting our spirits, and we’re fired up to get him in office. We know things won’t happen overnight, but he is the man to help America.”
His wide-ranging plan includes an additional $25 billion to help automakers retool plants and jump-start production, two years of tax credits to companies adding U.S. jobs, extending unemployment benefits an additional 13 weeks -- a key provision in a state such as Michigan, with the highest unemployment rate -- and allowing penalty-free withdrawals from retirement and 401(k) accounts this year and next.
Taken together, Obama’s proposal, which mixes older campaign ideas with new ones like the retirement account withdrawals, provides a glimpse into the comprehensive approach the Democrat wants to take in dealing with the nation’s faltering economy. He called for such a plan to be enacted immediately, though with Congress on break and the general election just three weeks away, that’s a long shot.
His opponent, Republican presidential nominee John McCain, is expected to announce his own economic proposal Tuesday, the day before the final of three debates between the two. McCain has trailed Obama in several national and battleground state polls since the economy took center stage in the campaign.
Obama said his plan should be enacted now because the nation has already lost three-quarters of a million jobs this year and unemployment is on the rise.
“Today, I’m proposing a number of steps that we should take immediately to stabilize our financial system, provide relief to families and communities and help struggling homeowners,” said Obama. “It’s a plan that begins with one word that’s on everyone’s mind, and it’s spelled J-O-B-S.
“We can’t wait to help workers and families and community who are struggling right now -- who don’t know if their job or their retirement will be there tomorrow, who don’t know if next week’s paycheck will cover this month’s bills. We need to pass an economic rescue plan for the middle class, and we need to do it now.”
McCain, too, has called for immediate economic intervention to prop up markets, but one of his strategists, Doug Holtz-Eakin, and another key supporter, former Ohio Rep. Rob Portman -- who was also director of the Office of Management and Budget for President George W. Bush -- criticized the Obama plan today, saying it would cost too much.
“Americans were hoping that Sen. Obama would tell us that he has decided that the economy is bad enough that he wouldn’t go forward with his tax increases,” said Portman. “Instead, what we heard today were a lot of new promises for new spending. That’s not the way we’re going to get ourselves back on track. It will just make the situation worse.”
But Obama’s plan specifically called for cutting taxes on 95% of American workers, including anyone making less than $200,000 a year. Other refundable tax credits could return as much as $1,000 per family almost immediately.
Portman singled out Obama’s proposal to allow people to withdraw funds from their retirement funds without penalty as particularly dangerous.
“That would have people taking out their retirement savings and assets at a time when they’re likely to be at a very low value,” he said. “It seems like it would be the wrong thing to do, to encourage people to do this as they’re preparing for their retirements.”
Meanwhile, Holtz-Eakin said Obama’s $3,000-per-person job tax credit for employers who create jobs in the United States was an expensive proposition, costing $170 billion. But that’s less than the $300 billion proposed by McCain to buy up bad mortgages in order to prop up home values.
Of particular interest to metro Detroit, where the situation for automakers has gotten so bad that General Motors has talked to Chrysler about a merger, is the auto loan. Initially approved at $50 billion to retool plants and spark production, Congress ended up approving $25 billion of that amount last month. Obama’s plan calls for approving the rest immediately, and he says all options must be kept on the table to help domestic automakers “weather the financial crisis.”
Here are some of the details of Obama’s plan, according to documents released by his campaign:
• Implement a temporary tax credit for 2009 and 2010 for companies
that add jobs in the United States. Existing businesses would receive a $3,000 refundable tax credit for each additional full-time employee hired.• Eliminate capital gains taxes on investments made in small businesses and start-up businesses.
• Make $25 billion available immediately for infrastructure projects.
• Cut taxes for 95% of workers and their families, plus seniors.
• Extend unemployment insurance benefits for another 13 weeks.
• Allow penalty-free hardship withdrawals from retirement accounts and 401(k) accounts this year and next. The plan would call for withdrawals of up to 15% of an account up to $10,000 without penalty. It could also be applied retroactively. • Allow seniors to delay required withdrawals from 401(k) accounts and individual retirement accounts.
• Allow bankruptcy judges to modify terms of mortgages on primary residences.
• Enact a 90-day foreclosure moratorium for financial institutions that participate in the congressional bailout plan.
Toledo resident Deidrei Campbell, 56, applauded Obama’s plan.“He’s the better candidate with the best ideas,” said Campbell, a Head Start employee. “A lot of people are disappointed by the economy and the direction of this country. Obama is lifting our spirits, and we’re fired up to get him in office. We know things won’t happen overnight, but he is the man to help America.”
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