Obama proposes halt to foreclosures, business tax breaks
McCain to unveil relief plan today
TOLEDO, Ohio - Democrat Barack Obama proposed more immediate steps yesterday to heal the nation's ailing economy, including a 90-day moratorium on home foreclosures at some banks and a two-year tax break for businesses that create new jobs.
With the economic turmoil weighing down his Republican presidential rival, Obama also proposed allowing people to withdraw up to $10,000 from their retirement accounts without any penalty this year and next.
The Democratic presidential candidate said his proposals, with a price tag of $60 billion over two years, can be enacted quickly, either through the government's regulatory powers or legislation that Congress could pass in a special session after the election.
"I'm proposing a number of steps that we should take immediately to stabilize our financial system, provide relief to families and communities and help struggling homeowners," Obama told a crowd of 3,000. "It's a plan that begins with one word that's on everybody's mind, and it's easy to spell - J-O-B-S."
Obama delivered his economic message in Toledo, a struggling blue-collar city in a state that could be critical to Obama's presidential hopes. Polls show a close race between Obama and Republican John McCain in Ohio, which decided the 2004 presidential election and has 20 electoral votes.
McCain is expected to unveil proposals today aimed at helping Americans cope with a sharp plunge in the stock market, including tax relief for senior investors.
McCain's economic adviser, Doug Holtz-Eakin, told Reuters that McCain would outline an estimated $52.5 billion in new proposals.
McCain will propose that seniors pay a maximum tax rate of 10 percent on money they withdraw from IRAs and 401(k) retirement plans in 2009 and 2010, instead of paying the current higher tax rate, Holtz-Eakin said. It would cost $36 billion.
Holtz-Eakin told Reuters that McCain will also propose relief for Americans who are "aiming toward retirement" and were counting on investment income to send their children to college or pay the mortgage.
Obama's latest proposals are in addition to other policies he has already offered as the stock market struggles, financial institutions wobble, and tight credit chokes the economy. Obama supported the $700 billion Wall Street bailout plan and endorsed the latest twist on it: the government buying ownership in major banks and partially nationalizing them to keep them afloat.
He proposed yesterday that banks participating in the federal bailout should temporarily postpone foreclosures for families making good-faith efforts to pay their mortgage. "We need to give people the breathing room they need to get back on their feet," he said.
Obama also called for a $3,000 tax credit for each additional full-time job a business creates. That means a business that adds five jobs would get a $15,000 break. That would end after 2010 and would cost $40 billion, the Obama campaign estimates.
Obama proposes letting people withdraw up to 15 percent of their retirement funds, to a maximum of $10,000, without the penalty that now applies to early or excess withdrawals. The change would apply retroactively to all of 2008, as well as 2009. People would still have to pay normal taxes on the money. He said letting people dip into their IRAs and 401(k)s would help them get through tough times when money is tight.