Last spring, I presented a non-partisan look at both the Democratic and Republican candidates. We’re moving into the home stretch with the election just three weeks away. As I did yesterday with John McCain, I’m providing an updated look at their views about issues related to the economy, including the current financial crisis, health care, taxes, and retirement.
Most of these are copied from the Barack Obama website. I relied on CNN’s election center to expand on certain issues where his website was unclear. Some statements are rephrased for length or clarity (or to cut the campaign rhetoric). I haven’t injected any personal commentary. If one candidate appears to have more specific plans than another, it’s because he provided more information regarding the issue.
Barack Obama believes that tax cuts for the middle class will improve the economy by increasing middle class purchasing power, expanding small businesses, and creating income parity. His tax proposals include:
- Enact a windfall profits tax on excessive oil company profits to give American families an immediate $1,000 emergency energy rebate
- Create a new tax credit of up to $500 per person, or $1,000 per working family
- Eliminate all income taxation of seniors making less than $50,000 per year
- Enact a $4,000 college tuition tax credit
- Provide a tax credit to companies that maintain or increase the number of full-time workers in America relative to those outside the US; maintain their corporate headquarters in America if it has ever been in America; pay decent wages; prepare workers for retirement; provide health insurance; and support employees who serve in the military
- Create a 10% universal mortgage credit for homeowners who do not itemize their tax returns
- Make the Child and Dependent Care Tax Credit refundable and allow low-income families to receive up to a 50 percent credit for their child care expenses
- Eliminate capital gains taxes for small businesses
- Freeze the estate tax exemption amount at $3.5 million
- Restore the top two income tax rates to their pre-2001 levels of 36 percent and 39.6 percent.
Barack Obama believes health care is a right and believes the government should help individuals buy coverage, either through their employers or through a government plan. His proposals include:
- Require insurance companies to cover pre-existing conditions
- Create a new small business health tax credit
- Lower costs for businesses by covering a portion of the catastrophic health costs they pay in return for lower premiums for employees
- Require large employers that do not offer coverage or make a meaningful contribution to the cost of quality health coverage for their employees to pay an additional payroll tax that will fund a public plan
- Establish a National Health Insurance Exchange with a range of private insurance options as well as a new public plan based on benefits available to members of Congress.
Barack Obama believes that Americans need to increase their retirement savings, but also believes we need to shore up Social Security to protect the elderly.
- Consider increasing social security contributions of those making over $250,000 by 2 to 4 percent (combined employer and employee)
- Automatically enroll workers in a workplace pension plan
- Employers who do not currently offer a retirement plan will be required to enroll their employees in a direct-deposit IRA account
- Match 50 percent of the first $1,000 of savings for families that earn less than $75,000. The savings match will be automatically deposited into designated personal accounts.
Financial Crisis and Bailout
Barack Obama supported the bailout plan. He also has the following proposals to resolve the finanical crisis:
- Create a fund to provide money to states and local communities for infrastructure projects
- Allow every family to withdraw up to 15% from their IRA or 401(k) – up to a maximum of $10,000 – without any fine or penalty throughout 2009
- Impose a three-month moratorium on foreclosures
- Create $25 billion fund to prevent state and local cuts in health, education, housing, and heating assistance or increases in property taxes, tolls or fees
- Suspend the required 401(k) and IRA withdrawals for retirees over the age of 70 1/2 years.
- Extend unemployment insurance for an additional 13 weeks.
Budget and Deficit
Barack Obama believes the US must close the deficit and reduce national debt. He also believes that infrastructure investment and spending reforms will help the economy grow faster. His proposals include:
- Reduce pork barrel spending
- Stop the abuse of tax shelters and offshore tax havens and help close the $350 billion tax gap between taxes owed and taxes paid
- Enforce pay-as-you-go (PAYGO) budgeting rules which require new spending commitments or tax changes to be paid for by cuts to other programs or new revenue.
- Stop funding wasteful, obsolete federal government programs
- Pressure the World Trade Organization to enforce trade agreements and stop unfair government subsidies to foreign exporters
- Reduce deficits
- Encourage personal savings.
The Barack Obama website includes many other programs and proposals not directly related to the economy and personal finance. If you haven’t yet decided who to vote for, visit his website to learn more about the issues he considers important and his proposed solutions.