Obama unveils middle class 'rescue plan'

Posted: Monday, October 13, 2008 2:56 PM by Domenico Montanaro

From NBC/NJ's Athena Jones

Obama has been trying to convince voters that he would be a better steward of the economy than his rival, arguing that he offers steady leadership, can relate to the economic concerns of ordinary Americans and will a champion for the middle class. He has consistently tried to portray McCain as erratic, out of touch and beholden to special interests, big corporations and the rich. Polls over the last few weeks suggest the Democrat is doing a better job of connecting with voters on economic issues.
 
"We can’t wait to help workers and families and communities who are struggling right now -- who don’t know if their job or their retirement will be there tomorrow; who don’t know if next week’s paycheck will cover this month’s bills," Obama told an audience of about 3,100 people here Monday. "We need to pass an economic rescue plan for the middle-class and we need to do not five years from now, not next year. We need to do it right now."
 

He said the Treasury Department must move faster with its plan to put money directly into struggling banks to help free up credit and he wants the Federal Reserve and Treasury to set up a mechanism to lend to cities and states facing a credit crunch.

He is also calling for the temporary elimination of tax penalties for people that make limited withdrawals from their 401(k) or IRA accounts, an idea he noted McCain also supports and that he said would help families weather the crisis without having to sell their hms or forego college for their children.

"I want to give credit where credit is due, I welcome Sen. McCain’s proposal to waive the rules that currently force our seniors to withdraw from their 401(k)s even when the market is bad," Obama said. "I think that’s a good idea, but I think we need to do even more.  Since so many Americans will be struggling to pay the bills over the next year, I propose that we 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 through 2009."

The campaign stressed that all of these new proposals should be enacted immediately and that that could be done using existing authority or through emergency legislation. Obama drew a standing ovation when he talked about the urgency of helping "Main Street" quickly.

"Congress should pass this emergency rescue plan, the rescue plan for Main Street as soon as possible," he said. "If Washington can move quickly to pass a rescue plan for our financial system, there's no reason we can't move just as quickly to pass a rescue plan for our middle-class, that will create jobs and provide relief, and help homeowners and if Congress does not act in the coming months, it will be one of the first things I do as President of the United States of America."

Congress is expected to return to session after the election to consider a second economic stimulus package aimed at helping the middle class that could include extended unemployment benefits, new infrastructure projects and a tax rebate. 

The McCain campaign sent an emailed response to Obama's speech hitting him for proposals they said would mean "massive tax increases."

"As our economy and our financial markets struggle through unprecedented turmoil, one thing is certain: raising taxes on the American people and American business will have a devastating effect," wrote spokesman Tucker Bounds. "When pressed on this point, Obama has repeatedly said he would consider abandoning his planned tax increases if the economy is 'weak,’ but apparently this economy is not weak enough for Barack Obama."

Bounds argued Americans needed across-the-board tax relief. Obama's plan would raise taxes on people making more than $250,000 a year.

The McCain camp also highlighted an apparent reversal by Obama on a foreclosure moratorium, sending around a newspaper article earlier in the day that noted that when Hillary Clinton proposed such an idea, the Illinois senator had called it "disastrous."

The proposals Obama announced today are in addition to the tax cuts he wants to provide to working families. Today he said Congress should pass a plan that would allow the IRS to mail out the first round of those tax cuts as soon as possible.

He has called for measures to help states avoid property tax increases, increase access to credit for small businesses and help families restructure their mortgages to make the payments more affordable and he proposes temporarily eliminating taxes on unemployment insurance benefits, fast-tracking the $25 billion in loan guarantees for the auto industry and provide more help to them to build fuel-efficient cars and other efforts to unfreeze markets for individual mortgages, student loans and other kinds of debt.

The presidential hopeful, who has promised to review the federal budget line by line and to eliminate programs that are not working, said the current crisis was a result of not just lack of regulation on Wall Street but unfair lending and irresponsible borrowing and said that once the current crisis had passed, Americans must learn to live more responsibly, save more and borrow less.  

Obama appeared at the convention center here in Lucas County -- where John Kerry beat George Bush 132,715 to 87,715 votes in 2004. He arrived in Toledo on Sunday and is set to spend the next few days here preparing for the third and final presidential debate to be held in New York Wednesday night.

OBAMA'S MIDDLE CLASS RESCUE PLAN
JOBS.
(1) Tax breaks for companies that create jobs in U.S. (not new)
(2) Eliminate capital gains taxes for new small businesses and start ups. (new)
(3) Fast track loan guarantees for car makers (not new)
(4) Jobs/Growth fund -- aimed at local municipalities to keep jobs that might have otherwise been cut for budgetary purposes. (new)
 
FAMILIES.
(1) Middle class tax cut (not new)
(2) Calls on Congress to give rebates by Winter (new)
(3) Extend employment benefits for those who lost their jobs (not new)
(4) No taxes on unemployment benefits (new)
(5) Retirement Savings: Welcomed McCain's proposal to let people withdraw from their 401Ks, but went further: proposing people could withdraw without penalty up to $10,000 from their 401Ks through 2009. (new)
 
HOMEOWNERS.
(1) Mortgage Tax Credit -- worth 10% of mortgages (not sure the specifics)
(2) Three-month moratorium on foreclosures (new) -- "give people breathing room to get back on their feet.
 
INCREASED $ FOR BANKS
(1) Have Treasury move faster on his plan to inject money directly into banks.

MAKE LOANS AVAILABLE.
(1) Create a Small Business Lending Fund (already proposed)

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