During the primary season, OhMyGov! reported on the remaining candidates' positions on various issues, including the economy. Since then the economy has become an even bigger concern for Americans and consequently an even bigger campaign issue.
Both Senator Barack Obama (D-IL) and Senator John McCain (R-AZ) as well as Obama's running mate Senator Joe Biden (D-DE) were among the 74 senators voting for the financial system bailout, officially named the Troubled Assets Relief Act, on Wednesday. With both candidates united in support of the highly controversial economic intervention, voters are left with an even muddier view of how each man intends to fix our economic mess as president.
To help you make an informed decision on election day, we've summarized the candidates plans in four major areas: taxes, trade, mortgages, and jobs. To read the complete plans, visit the candidates' web pages at www.barackobama.com and www.johnmccain.com.
Taxes
Senator McCain argues for a pro-growth tax policy. This policy includes keeping the top tax rate at 35 percent, maintaining the 15 percent rates on dividends and capital gains, and phasing out the Alternative Minimum Tax (AMT). He would also cut the corporate tax rate from 35 to 25 percent, arguing that having the second highest corporate tax rate in the world makes America a less attractive place to do business than many of our trade partners. McCain's pro-growth policy would allow tax deduction of equipment and technology investments and would establish a permanent tax credit equal to 10 percent of wages spent on research and development. Both would encourage companies to invest in innovative technologies and make us more competitive with other countries.
Senator Obama's tax policies focus on providing tax relief for middle class Americans. He would create a new tax credit of up to $500 per person or $1000 per working family. This "Making Work Pay" tax credit would completely eliminate income taxes for 10 million Americans. Obama would also eliminate income taxes for seniors making less than $50,000 per year, affecting 7 million seniors and providing an average savings of $1400 each year. Finally, Obama promises to dramatically simplify tax filings so that most Americans will be able to do their taxes in less than five minutes. Estimates show this could save Americans up to $2 billion in tax preparer fees.
Trade
Senator Obama promises to fight for fair trade policies that open up foreign markets to support good American jobs. He also sees trade agreements as a way to spread good labor and environmental standards around the world. Obama is also critical of the North American Free Trade Agreement (NAFTA) for its detrimental affect on American workers and would work to amend it. On the campaign trail, Obama frequently proclaims that he would end tax breaks for companies that move jobs overseas and reward companies that support American workers.
Lowering all barriers to trade is Senator McCain's promise. He believes that globalization is an opportunity for American workers today and in the future because 95 percent of the world's customers are outside our borders. McCain says we need to engage in multilateral, regional, and bilateral efforts to reduce barriers to trade, level the global playing field, and build effective enforcement of global trading rules.
Mortgages
Senator McCain proposes a "HOME Plan" that would help those hurt by the housing crisis. Holders of a sub-prime mortgage who are delinquent on payments, facing an interest reset, or otherwise will be unable to continue to pay their mortgage but can meet the terms of a new 30 year fixed-rate mortgage would be eligible. If approved, the mortgage servicer would write down and retire the existing loan, which would be replaced by an FHA guaranteed HOME loan from a lender.
Senator Obama promises to fight mortgage fraud and protect consumers against abusive lending practices. He would also create a Homeowner Obligation Made Explicit (HOME) score, which would provide potential borrowers with a simplified, standardized borrower metric (similar to APR) for home mortgages. Finally, Obama would work to eliminate the provision that prevents bankruptcy courts from modifying an individual's mortgage payments.
Jobs
New jobs can be created as we work to create clean energy and improve our infrastructure, argues Senator Obama. Among other programs, he would create a National Infrastructure Reinvestment Bank to address the national transportation infrastructure challenge. The Bank would receive $60 billion over 10 years to finance highway, bridge, road, ports, air, and train projects across the nation. These projects would create up to two million new jobs.
Doug Holtz-Eakin, Senator McCain's senior policy advisor, says that every policy McCain has created in this campaign has the goal of creating good jobs for Americans. This includes lowering taxes, creating more portable health insurance that is not a burden on the employer, energy policies that allow companies to grow, favorable business tax policies, and opening new markets overseas.
The economy, even in the best of times, is always a central issue in presidential candidates but even more so during times of crisis. Both candidates make a compelling, yet wildly different, case for their candidacy on economic issues. As always, these cases are based mainly on ideas and promises and neither candidate is likely to be able to deliver on all of them. It is up to the voters to decide which they prefer and which candidate they believe will be able to deliver the most bang for their vote.
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