NCPA - National Center for Policy Analysis


October 16, 2008

Sen. Barack Obama (D-Ill.) has unveiled an "economic rescue plan for the middle class."  At its heart is a $60 billion expansion of spending to help individuals, companies and states hit by the slowdown, says the BBC News.

These benefits include:

  • Temporary tax credits for firms that create jobs in the United States.
  • A 90-day moratorium on foreclosure for homeowners who are making "good faith" efforts to keep up their payments.
  • Temporary elimination of tax on unemployment benefits.
  • A new body to lend to state and city governments who are finding it hard to get access to credit markets.
  • Penalty-free withdrawals of up to $10,000 from people's retirement savings plans.

These proposals are additional to the $115 billion in tax cuts to households earning under $250,000 that Obama has already proposed.

Sen. Obama's plan follows the approach adopted by Congress in its earlier economic stimulus package, which gave temporary and targeted, rather than broad-brush help.

The Democrats would like to call Congress back into an emergency lame-duck session immediately after the election in November to pass the new emergency stimulus package.

Obama also has a number of longer-term spending plans, including investing $15 billion a year in renewable energy and a big program of rebuilding U.S. infrastructure, such as bridges and roads.

He says that these plans will create seven million new jobs over 10 years.

Source: "Candidates' economic plans compared," BBC News, October 14, 2008.

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