WASHINGTON -- The two major-party presidential candidates last week unveiled contrasting approaches to helping the nation out of its economic doldrums.
For GOP candidate Sen. John McCain the best approaches are across-the-board tax cuts, reducing federal spending and tackling entitlements. Democratic candidate Sen. Barack Obama is pushing a middle-class tax cut, a tax increase on the wealthy, a stimulus package and foreclosure relief.
McCain favors extending the Bush tax cuts (which are set to expire in 2010) and paying for them by freezing nondiscretionary spending and reforming entitlement programs, such as Medicare and Social Security. He promised to balance the federal budget by 2013 and said that would occur as a result of the spending restraints and the economic growth generated by the tax cuts.
McCain also called for more foreign trade and liberalized trade agreements. He has conceded that foreign trade has hurt some workers but ultimately maintained that it is a net plus, especially if the government retrains those workers.
He and his aides have taken aim at Obama's support for higher taxes on some high-income Americans, noting that any tax increase during an economic slowdown will only delay the recovery. Obama's staff has countered that any increases will be offset by tax credits.
Obama's proposal includes a $50 billion stimulus package, which provides energy rebates for working families, creates a fund to help families facing foreclosure and gives more money to states hit hard by the economic downturn.
He would raise taxes on dividends and capital gains and on those earning more than $250,000 per year and use some of the additional revenues to finance tax credits for low- and middle-income Americans to pay for health care. Also, he proposes that retirees making less than $50,000 would pay no income tax, and he would create government-sponsored portable workplace pension plans. The government would match some of the contributions of families earning less than $75,000 annually.
Also, he wants to change bankruptcy laws so that people weighed down by high medical expenses, the elderly and those serving in the military could have a better chance of not losing their homes. To accomplish this he proposed a 120-day moratorium on bad-credit reporting and eliminating credit counseling requirements for those who filed for bankruptcy because of medical expenses, which he said account for half of all bankruptcies filed last year. He also wants to speed up the bankruptcy process for those in the military by reducing paperwork and
setting up a minimum homestead exemption.
He criticized McCain for having supported the 2005 bankruptcy bill, which was strongly supported by credit unions and other financial institutions. McCain's campaign noted that the measure enjoyed bipartisan support when it was passed.