The disdain for the Bush tax cuts on the part of both Democratic candidates is nearing campaign legend status. For a comparison, think Grover Cleveland's battles with protectionists during the 1892 campaign, or Howard Taft fighting William Jennings Bryan over reform in 1908. Not working for you? Try this one, think, Al Gore and the RNC battling over the creation of the internet in 2000 - it's big.
But beyond this inherant hatred for the Bush tax cuts, what else is in the democratic canidates economic plans?
Clinton's plan would start by regressing the rate of income tax paid by upper-income people to the levels seen in the 1990s.
She will also provide matching tax credits to families who save money. The plan includes a dollar-for-dollar match for the first $1,000 a married couple saves, and a 50 percent match on families the first $1,000 savings for married couples earning $60,000 - $100,000. In order to qualify for matching funds, a family has to do their saving in a new American Retirement Account, a Hillary proposed new approach to retirement savings (discussed later).
Obama's biggest tax credit is the, Making Work Pay credit, it would provide a tax credit up to $500 for single payers and up to $1000 for working families. Obama says this will do two things, it will negate payroll taxes on the first $8,100 of income, and second, while maintaining a funding source for social security.
Up next on our magical mystery tour of tax credits, college affordability.
Under Obama's perfectly cheesily titled Create the American Opportunity tax credit, the first $4,000 of college education for 'most Americans' would be free, the use of most, instead of all, is never explained. After the initial $4,000, Obama says his plan would pay for two-thirds the cost of tuition at an 'average public college or university.'
Clinton's credit would double the HOPE tax credit, it would raise the benefit a person can receive from $1,650-$3,000. She would also increase the maximum Pell Grant, tying its value to the cost of tuition.
On retirement, Obama and Hillary offer similar plans. Both would create an automatic workplace pension, this would provide a retirement plan for people who have no employer-based plan. A major aspect of Clinton's plan would establish the American Retirement Account. Money put into this account would be subject to Clinton's matching policy. Additionally, money saved is put into your account via direct-deposit, the same way direct-deposit for payroll works.
Obama would also create an IRA direct-deposit system. His plan will also automatically enroll employees into a workplace pension plan, unless they opt-out. Employers who do not offer a retirement plan will have to enroll their employees in a direct-deposit IRA account. Like Clinton, Obama will match funds saved in his new these new retirement accounts. He will expand the Savers Choice tax credit to match up to $1,000 of savings for a family earning under $75,000.
Clinton says she will pay for the American Retirement Account's matching tax cuts by freezing the estate tax at $7 million per couple. Obama does not say where the money for his plan will come from.
Wednesday, February 20, 2008
Tuesday, February 19, 2008
Look! This Campaign does have substance: Mortage/Housing crisis
On the housing crisis, Clinton offers a more drastic and broad moving proposal, but both devote a lot of resources to the issue.
To the ire of many, the focal point of Clinton's plan is a 90 day moratorium on foreclosures. The moratorium would keep borrowers un-homeless until the second part of Clinton's plan, a rate freeze on adjustable rate loans.
This freeze would last for at least five years, or until subprime loans could be converted to more "affordable" loans. Clinton will also require status reports on the progress that Wall Street is making in converting subprime loans into affordable ones.
Obama's plan is anchored by what he calls a Foreclosure Prevention Fund, a $10 billion fund that will help, well, let's just say it's name is not very original. Under his plan, borrowers facing foreclosure would be allowed to refinance their loans through either the Federal Housing Authority or government-sponsored-mortgage-giants Freddie Mac and Fanny Mae.
Obama's fund would also help home owners who bought houses they can not afford sell those houses - basically, assistance for people who made bad choices. The specifics include, providing additional time and assistance to borrowers in order to help them pay back any losses from selling their home and the waiving of certain income taxes that result from borrowers selling their homes to avoid foreclosure.
Both candidates would also address bad guy lenders who, like Dan Aykroyd circa-1977, blatantly covered up the true danger of the product they were pushing. Sitting with a Consumer Reporter (Candice Bergen), toy salesmen, and all around sleaze, Irwin Mainway (Akyroyd) explains that his company's toy, Mainway's Bag O'glass, is nothing more than "an interesting toy, you know?" With the type of greasy arrogance that made Mainway an SNL favorite, mortgage brokers gave dangerous, Bag O'Glass, loans to borrowers - all the while promising, they're nothing more than interesting loans, you know?
Under Obama's STOP FRAUD Act, new penalties for Mainway-lenders found guilty of fraud would be enacted, and the Government Accountability Office would be required to monitor some state lending programs in a effort to find, and get rid of, programs that are unfair to borrowers.
Clinton combats predatory lenders through transparency. Her plan would require mortgage brokers to tell borrowers that their compensation rises are tied to the level of mortgage rates and fees. In other words, the higher the rates and fees, the more money the borrower pockets. She also wants to create a federal registry of mortgage brokers, so borrowers can easily look up violations or complaints levied against a broker. Currently there is no centralized way to look up such information.
Clinton would give a boost to local housing trust funds, under her plan she would create a $1 billion fund to give federal support to local housing trust funds, eliminate pre-payment penalties and require that lenders disclose the taxes and insurance costs when going over the loan with a borrower. Currently, lenders can exclude these 'hidden costs' from the underwriting assessment, thus they are able to qualify people for mortgages they can not afford.
Obama's plan would create a universal 10 percent universal mortgage credit and create the HOME score, an easy to understand rubric that would help borrowers compare prices and understand the full cost of a loan.
To the ire of many, the focal point of Clinton's plan is a 90 day moratorium on foreclosures. The moratorium would keep borrowers un-homeless until the second part of Clinton's plan, a rate freeze on adjustable rate loans.
This freeze would last for at least five years, or until subprime loans could be converted to more "affordable" loans. Clinton will also require status reports on the progress that Wall Street is making in converting subprime loans into affordable ones.
Obama's plan is anchored by what he calls a Foreclosure Prevention Fund, a $10 billion fund that will help, well, let's just say it's name is not very original. Under his plan, borrowers facing foreclosure would be allowed to refinance their loans through either the Federal Housing Authority or government-sponsored-mortgage-giants Freddie Mac and Fanny Mae.
Obama's fund would also help home owners who bought houses they can not afford sell those houses - basically, assistance for people who made bad choices. The specifics include, providing additional time and assistance to borrowers in order to help them pay back any losses from selling their home and the waiving of certain income taxes that result from borrowers selling their homes to avoid foreclosure.
Both candidates would also address bad guy lenders who, like Dan Aykroyd circa-1977, blatantly covered up the true danger of the product they were pushing. Sitting with a Consumer Reporter (Candice Bergen), toy salesmen, and all around sleaze, Irwin Mainway (Akyroyd) explains that his company's toy, Mainway's Bag O'glass, is nothing more than "an interesting toy, you know?" With the type of greasy arrogance that made Mainway an SNL favorite, mortgage brokers gave dangerous, Bag O'Glass, loans to borrowers - all the while promising, they're nothing more than interesting loans, you know?
Under Obama's STOP FRAUD Act, new penalties for Mainway-lenders found guilty of fraud would be enacted, and the Government Accountability Office would be required to monitor some state lending programs in a effort to find, and get rid of, programs that are unfair to borrowers.
Clinton combats predatory lenders through transparency. Her plan would require mortgage brokers to tell borrowers that their compensation rises are tied to the level of mortgage rates and fees. In other words, the higher the rates and fees, the more money the borrower pockets. She also wants to create a federal registry of mortgage brokers, so borrowers can easily look up violations or complaints levied against a broker. Currently there is no centralized way to look up such information.
Clinton would give a boost to local housing trust funds, under her plan she would create a $1 billion fund to give federal support to local housing trust funds, eliminate pre-payment penalties and require that lenders disclose the taxes and insurance costs when going over the loan with a borrower. Currently, lenders can exclude these 'hidden costs' from the underwriting assessment, thus they are able to qualify people for mortgages they can not afford.
Obama's plan would create a universal 10 percent universal mortgage credit and create the HOME score, an easy to understand rubric that would help borrowers compare prices and understand the full cost of a loan.
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