On Economy, Different Diagnoses, Different Cures
Summary
Obama and McCain differ on the causes of the nation’s economic ills — and prescribe very different cures.
Food and Gas Prices
John McCain:
Wants to increase the value of the dollar in an effort to reduce the price of oil; suspend the 18.4 cent federal gas tax and the 24.4 cent diesel tax from Memorial Day to Labor Day; roll back corn-based ethanol mandates for gas, which he says are contributing to increased food costs.
Barack Obama:
Wants to pass a windfall profits tax on excessive oil company profits that would provide families with a $1,000 emergency energy rebate; create funds that would prevent cuts in state and local services and jobs.
Sources: McCain and Obama campaigns
Housing
John McCain:
Wants to create a program that would allow qualified holders of sub-prime mortgages to have part of their principal forgiven and get a new loan backed by the federal government. He says any aid to the mortgage industry must be accompanied by reforms that promote “greater transparency and accountability.”
Barack Obama:
Wants to create a 10 percent universal mortgage credit for homeowners who do not itemize tax relief; enact a Homeowner Obligation Made Explicit (HOME) scoring system to provide potential borrowers with a standardized borrower metric (similar to Annual Percntage Rate (APR)) for home mortgages.
Sources: McCain and Obama campaigns
Taxes
John McCain: Wants to: make the Bush tax cuts permanent, cut corporate taxes, and repeal the alternative minimum tax. He has promised a balance budget in the first term, but few economists believe it is achievable.
Barack Obama:
Wants to raise income taxes on the wealthiest Americans and increase their capital gains and dividends taxes; raise corporate taxes; triple the Earned Income Tax Credit for minimum-wage workers and give a higher credit for larger families; eliminate tax-filing requirement for older workers making under $50,000.
Sources: ABC News
Trade
John McCain:
Wants to pursue free trade agreements with global trading partners; ratify free trade agreements with Colombia and South Korea. He opposes unilateral renegotiation of NAFTA; and believes government-paid subsidies to corporate farmers, not the resurgence of foreign markets, are the biggest obstacle to family-owned farms.
Barack Obama:
Wants to renegotiate NAFTA to strengthen enforcement of labor and environmental standards in support of American jobs and workers; update existing Trade Adjustment Assistance and programs tha
t spread good labor and environmental standards and help workers adapt to a rapidly changing economy.
Sources: Obama and McCain campaigns
Job Creation
John McCain:
Wants to cut business taxes in order to keep more jobs in the United States; create programs to teach older workers skills required of a 21st Century workforce; provide aid to workers in hard-hit industries while they train to for employment in new industries; create new jobs by constructing new nuclear plants and developing clean-coal and other renewable energy technology.
Barack Obama:
Wants to repeal tax breaks for companies that send workers overseas; create a tax credit to “reward” companies that increase their American workforce relative to jobs outside the United States; create new federal workforce training programs to prepare workers for positions in industries focused on the development of “green” technology.
Sources: Obama and McCain campaigns
Small Businesses
John McCain:
Wants to provide a tax credit for Americans to use on health care, which would ease the burden on small businesses; keep the top tax rate at 35 percent, maintain the 15 percent rates on dividends and capital gains, and phase-out the Alternative Minimum Tax; allow a first-year deduction on equipment and technology investments and establish a permanent tax credit equal to 10 percent of wages spent on research and development; reduce the Estate tax rate to 15 percent.
Barack Obama:
Wants to: eliminate capital gains taxes on start-up and small businesses to encourage innovation and job creation; create a $500 “Making Work Pay” tax credit to workers, a measure he says will reduce the burden of double taxation on self-employed small business owners who pay both the employee and the employer side of the payroll tax; create a national network of public-private business incubators.