Barack Obama's Plan to Address the Financial Crisis:
While he was a candidate in 2008, Obama said he would streamline regulatory agencies, especially those that oversee banks that borrow from the government, establish a financial market advisory group, improve transparency for financial disclosure, and crack down on trading activities that could manipulate markets. He would prohibit government aides from working on issues related to a former employer for two years and prevent them from lobbying after they leave. He would put online meetings between governmental agencies and lobbyists. (Source: Greenbay Press Gazette, "Obama strikes back on economic reform," September 23, 2008)
Obama's Economic Stimulus Plan:
Obama would enact a windfall profits tax on oil companies to give families a $1,000 rebate. He would give $25 billion to states for health, education, housing, and heating assistance. Obama would fund $25 billion in public works projects. He would provide $500 in tax credits per person and $1,000 per family, and eliminate income tax for seniors making less than $50,000 per year. Obama would eliminate capital gains taxes for small business investors, and extend write-offs for small business equipment purchases. (Source: BarackObama.com, "Economic Stimulus Plan"; For more updated info, see Obama Economic Stimulus Plan)
Obama's Economic Platform:
Obama's platform centered around eight issues:
- Tax Relief
- Technology, Innovation and Create Jobs
- Protect Labor
- Promote Free Trade
- Address Predatory Credit Card Practices
- Reform Bankruptcy Laws
- Protect Homeownership and Crack Down on Mortgage Fraud
- Work/Family Balance
Tax Relief:
- Expand the Earned Income Tax Credit and Child Tax Credit for low-income workers.
- Provide national health insurance, reduce self-employment tax.
Technology, Innovation and Creating Jobs:
- Implement a cap-and-trade program to reduce carbon emissions by 80% below 1990 levels by 2050.
- Invest $150 billion over ten years to deploy clean technologies.
- Reduce oil consumption by 10 million barrels of oil by 2030 by doubling fuel economy standards within 18 years.
- Make all new buildings carbon neutral, or produce zero emissions, by 2030. Improve new building efficiency by 50% and existing building efficiency by 25% in ten years.
- Eliminate special interest business deductions, such as for the oil and gas industry.
- Double federal funding for basic research.
- Raise minimum wage and index it to inflation.
Address Predatory Credit Card Practices and Reform Bankruptcy Laws:
- Establish a credit card rating system to educate consumers on risk.
- Create a Credit Card Bill of Rights to protect consumers from unfair practices, such as interest charges on fees and unilateral changes.
- Reform bankruptcy laws for families facing a medical crisis.
- Cap payday loans at 35%.
- Encourage banks to make micro loans.
- Ban executive bonuses for bankrupt companies.
- Require disclosure of all pension investments.
Protect Homeownership and Crack Down on Mortgage Fraud:
- Provide 10% tax credit for the 10 million mortgage-holders who do not itemize.
- Create a fund to help homeowners in foreclosure to either refinance or sell their home.
Work / Family Balance:
- Double funding for after-school programs.
- Expand the Family Medical Leave Act.
- Provide low-income families with a refundable tax credit to help with their child-care expenses.
- Encourage flexible work schedules.
Protect Labor and Promote Free Trade:
- More strongly enforce and provide better labor protection for trade agreements.
- End tax breaks for companies that outsource jobs overseas.
For more on Obama's trade policies, read Obama and Trade.
Health Care Reform:
- Offer health care coverage similar to that used by Congress. Require that all children have health care coverage. Create a National Health Coverage exchange to monitor and provide information. Spend $10 billion to move health care provides to an all-electronic system.
Impact on the Economy:
Programs that put money into consumers' pockets, whether directly through rebates and tax credits or indirectly through health insurance, would help boost the economy. Saving public works construction jobs would continue to build much needed infrastructure that economic growth depends on.
Indexing the minimum wage to inflation wouldn't aggravate inflation much, because these wages are so low that an annual 2-3% increase won't have as much effect as increases on the high end of the income gap. Reducing the country's reliance on oil would reduce inflation by lowering oil prices.
Many measures, such as those under Work / Life and Protect Credit Card consumers, would help the average American worker without expanding the deficit by much. For example, doubling the after school program would benefit working mothers without adding much to budget costs because it is such a small program to start with. Making credit card terms more understandable may help people stay out of unsustainable consumer debt.However, some measures would harm the economy. Adding too many labor safeguards to trade agreements would restrict trade and possibly be a deal-breaker for potential partners. Making labor and tax laws too restrictive on multi-national corporations would just cause them to relocate outside of the U.S. once and for all.
Overall, the plan was visionary and would help address many important issues in the economy, including relieving income inequality and reliance on foreign oil.
