Sen. Barack Obama proposed new steps on Monday to address the economic crisis, calling for temporary but costly new programs to help employers, automakers, homeowners, the unemployed, and state and local governments.
In an address here, Obama, the Democratic presidential nominee, proposed giving employers a $3,000 tax credit for each new hire to encourage job creation. He said he would seek to allow Americans of all ages to borrow from retirement savings without a tax penalty; to eliminate income taxes on unemployment benefits; and to double, to $50 billion, the government’s loan guarantees for automakers.
Obama also called on the Treasury and the Federal Reserve to create a mechanism to lend money to cities and states with fiscal problems, and to expand the government guarantees for financial institutions to encourage a return to more normal lending. He also proposed a 90-day moratorium on most home foreclosures; it would require financial institutions that take government help to agree not to act against homeowners who are trying to make payments, even if not the full amounts.
“We need to give people the breathing room they need to get back on their feet,” Obama told a crowd of more than 3,000 people in an afternoon speech at the SeaGate Convention Centre in downtown Toledo.
“I won’t pretend this will be easy,” he said at another point. “George Bush has dug a deep hole for us. It’s going to take a while for us to dig our way out. We’re going to have to set priorities as never before.”
The package of new proposals was the most detailed and ambitious offered by Obama since the financial crisis became acute last month, clouding the economic outlook and transforming the presidential campaign. Obama’s Republican rival, Sen. John McCain, will make new proposals for the economy on Tuesday, advisers said. They did not provide any details.
Late Sunday, after McCain and his team looked at a variety of policy options over the weekend, a campaign spokesman said McCain, who has been losing ground to Obama in the polls, would have no new proposals unless events warranted. McCain has been emphasizing his plan to help people with financial difficulties get more affordable mortgages, with taxpayers picking up the tab.
This struggling manufacturing city is representative of both the economic crisis and the political battle for industrial-belt swing states that could determine the winner of the election. Obama is spending three days in northwestern Ohio, just south of the auto-making capital, Detroit, mostly sequestered with advisers to prepare for the third and final presidential debate on Wednesday at Hofstra University in Hempstead, N.Y.
Obama’s advisers emphasized that many of the new steps he called for could be taken quickly by the Democratic-controlled Congress in a lame-duck session this year, instead of waiting until after the new president is sworn into office late in January. Several steps could be taken by the Treasury and Federal Reserve using their powers under current law, the advisers said.