Economic proposals key in last debate

October 15, 2008 11:34:30 AM PDT
Wednesday night Democratic presidential nominee Sen. Barack Obama and Republican presidential nominee Sen. John McCain will meet for the third and final debate. Tuesday, both candidates were honing their positions on the economy.

With just three weeks until Election Day, McCain is betting his plan to jump start the economy will get his campaign moving in the right direction. "Instead of just propping up institutions deemed too big to fail in this crisis, we will use more of this public money to help businesses and homeowners that may be too small to survive," McCain said at a political rally Tuesday.

McCain's latest proposals include:

  • Lowering taxes on seniors who are tapping into their retirement accounts

  • Suspending tax rules that force seniors to sell stock from their IRAs and 401Ks

  • Accelerating tax write-offs for anyone forced to sell during the crisis

  • Reducing capital gains on taxes for the next couple of years

  • Purchasing home mortgages directly from homeowners and banks and renegotiate the loans

  • Eliminating taxes on unemployment benefits

    Tuesday Obama criticized McCain's plan to buy up home mortgages at face value.

    "The idea for example, of purchasing homes at full price from banks so that banks have no losses and taxpayers automatically have losses, that's a bad idea," Obama said.

    On Monday, Obama presented his own economic plan. He proposed:

  • A temporary tax credit for firms creating new jobs in the U.S.

  • Allowing penalty-free withdrawals from retirement accounts

  • A 90 day moratorium on home foreclosures

  • Lending money directly to state and municipal governments

    "With all of these programs the devil is going to be in the details of implementation," University of California, Berkeley economist Brad Delong said.

    Most of the candidates' proposals just nibble around the edges, Delong said. He likes Obama's foreclosure moratorium the most and McCain's suspension of taxes on unemployment after that.

    When McCain and Obama meet Wednesday, both men will have to offer more than just lines form their stump speeches, they will have to get into the details of what they are proposing, ABC political analyst Bruce Cain said.

    "I think they really do have to comment on McCain's proposal," Cain said. "They're going to have to comment on how the Treasury should be using its $700 billion."

    For McCain, who is trailing in the swing states Ohio, Florida and Virginia, the debate will be a bigger hurdle. It will be his last chance to hit it out of the park, and with millions watching, he pretty much needs a grand slam. Obama is dabbling with a double digit lead; all he has to do is look presidential.


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