McCain, Obama Campaigns Tackle Economic Issues this Week

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McCain, Obama Campaigns Tackle Economic Issues this Week

John McCain and Barack Obama plan to spend the week talking to voters about their plans to fix the economy. President Bush's handling of the economy has increased the size of government by 60% in the last eight years and driven the national debt to $9 trillion. McCain called this "inexcusable."

TAXES & BUDGETS: During Monday's town hall meeting in Denver, John McCain presented some of his ideas for fixing the economy. Meanwhile, Barack Obama spoke in St. Louis about his economic ideas, having missed his scheduled appearance in North Carolina because of aircraft problems.

by Laura Major
Informify Staff Writer
July 9, 2008

With more and more Americans facing foreclosures, unemployment and even bankruptcy, the economy is emerging as one of the most important issues facing voters. Both presidential candidates started to address the issue this week. McCain focused his economic plans on creating new jobs in the energy sector and strengthening small businesses. Obama proposed raising taxes for the wealthy and lowering family health insurance premiums.

McCain, Obama Pledge to Save America Money, Proposals Vastly Different

Both presumptive presidential candidates spoke Monday about how they'd save the country money. Here are a few of their suggestions.

McCain Would Save America Money By...

balancing budget by 2013
drilling more offshore
giving drivers a break with a "gas tax holiday"
controlling government spending
lowering corporate tax rate from 35% to 25%
repealing alternative minimum tax
making Bush tax cuts permanent (he once opposed them)
cutting estate tax to 15%
ramping up energy research
giving tax credits to encourage health insurance market
freezing discretionary spending, except for veterans and defense, for one year
reforming social security and Medicare
increasing tax deduction for dependents to $7,000

Obama Would Save America Money By...

raising corporate tax rates
allocating $50 billion to stimulate economy through rebates to lower- and middle-income workers and the elderly
letting Bush tax cuts expire for those making more than $250,000 annually
raising estate taxes to 45%
establishing a fund to help Americans avoid mortgage foreclosures
keeping retirement age for Social Security benefits where it is now; preserving current benefits
lowering family health insurance premiums by $2,500
fast-tracking bankruptcy laws for some people
making people who earn more than $250,000 pay social security tax

Critics Bash both Obama, McCain Vague Economic Policies

Critics of both candidates' proposals say that promises are easy to make, especially when they aren't very specific.

Criticisms of McCain's economic proposals...

Extending Bush's tax cuts would prevent balancing the budget, even in eight years, and will still grow the deficit to about $600 billion.
McCain doesn't talk about which small changes he'll make in his streamlining to balance the budget.
He doesn't say when savings from winning the Iraq and Afghanistan wars will kick in.
His freezing of discretionary government spending won't affect the deficit.

Criticisms of Obama's economic proposals...

His proposed tax increase for the wealthy would have them pay 50 cents on every dollar over $250,000. Even then, it won't come close to dealing with the $4.3 trillion projected shortfall in Social Security over next 75 years.
Obama doesn't say what effect the increased taxes would have on the economy.
He doesn't specify if those paying increased Social Security taxes would get additional benefits.
The current fiscal situation won't let him do what he wants.
His one-time savings of money currently spent on war wouldn't help fund long-term programs.
He doesn't take into account how expensive rebuilding the military will be, or the costs associated with helping post-war Iraq and Afghanistan.

Question for Readers:

The candidates' different economic approaches are shaping up to look like a classic Republican/Democrat argument. Do you agree?

McCain made a definite bid for the small business owner vote-and those who work for them. Pointing to their important role in the economy, McCain pledged to do the following:

improve the economic climate so small businesses can continue to create jobs (233,000 created this year)
balance the budget by 2013
avoid forcing small business to pay family medical insurance, as Obama suggests, which could add $12,000 a year to the cost of an employee
implement a "gas tax holiday" to save money for small businesses, especially those reliant on vehicles
reduce—or hold steady—business taxes, since raising them forces small business to cut jobs
give tax relief to small business owners who file as individual rate payers
increase the open market to help the export trade, which is linked to 25% of jobs in the country

McCain offers no new spending programs, emphasizing that a recovered economy is more important than government spending.

Obama, however, suggests the following annual expenditures:

$6 billion	strengthening bridges and dams
$50 million	help men be better fathers
$500 million	summer school for poor children
$65 billion	health care programs
$15 billion	clean energy development
$18 billion	added to education budget

He also proposes several one-time expenditures:

$10 billion	prevent home foreclosures
$2 billion	help displaced Iraqis

The overall cost of Obama's economic plan comes to $130 billion a year-along with an $80 billion tax cut.

"I accept that all candidates throw out a lot of proposals when they're campaigning," said Leon Panetta, Bill Clinton's chief of staff. "You have to assume that's all part of a campaign strategy to appeal to a lot of different constituencies that are out there. But once he enters the Oval Office, he's going to have to make some hard decisions." (Los Angeles Times, 7/8/08)