m***@use.net
2008-10-26 02:55:43 UTC
Why Obama Has Pulled Ahead on Taxes and Economic Issues
By Mark Weisbrot, AlterNet. Posted October 25, 2008.
Republicans push policies that redistribute income from working and
middle-class Americans to the rich. No wonder people are turning to
Obama.
Senator Barack Obama's campaign for the White House pulled ahead of
his opponent, Senator John McCain, as soon as the current financial
crisis hit the headlines. As one of McCain's top strategists recently
blurted out, "If we keep talking about the economic crisis, we're
going to lose."
There's a reason for this well-established trend that the Democrats
tend to win among those who vote on economic issues. Although both
parties are subject to undue influence from powerful corporate
interests, the Republicans have been much more consistent in
advocating government policies that redistribute income from working
and middle-class Americans to the rich. They are also much less
friendly to the most important government programs that insure people
against economic catastrophe, such as Social Security and Medicare.
These partisan differences are evident in the current presidential
campaign. On Social Security, McCain has in the past supported
President Bush's partial privatization plan, which was rightly
rejected as an attempt to undermine the nation's most important
anti-poverty program and social safety net. McCain has also undermined
Social Security by wildly misrepresenting its financial condition,
alleging that the program is "going broke." (For the record, according
to the non-partisan Congressional Budget Office, Social Security will
pay all promised benefits for the next 40 years without any changes
whatsoever. It would need only minor changes, less than those adopted
in each of the decades of the 1950s, 60s, 70s, and 80s to remain
solvent for 75 years).
Obama rejects privatization of Social Security -- as well as Medicare,
where the Republicans have increased the role of private insurance
companies by giving them wasteful taxpayer subsidies. On health care,
one of the most interesting features of Obama's proposal is the
establishment of a public insurance program similar to Medicare, which
employers and uninsured individuals could buy into. This would be
subsidized and could be an important step towards universal health
insurance.
McCain wants people to buy their own private health insurance. He is
willing to give them a subsidy from the government, but the $5000 he
offers is far less than the $12,500 it costs to insure a typical
family. Even worse, he proposes to tax the health insurance benefits
provided by employers, which are currently tax-free. This would be a
hefty tax increase for tens of millions of working Americans. It also
puts at risk the health insurance of many of the 160 million people
who depend on employment-based insurance policies.
McCain has also been reluctant to support a fiscal stimulus that will
be necessary to limit the size and duration of the current downturn.
This could be a costly mistake. As consumers cut back on spending --
which is already happening this quarter -- the recession will deepen
unless the government is willing to make up for it. Obama has proposed
a stimulus package that is too small, but will almost certainly
support larger plans that will come from the Democratic Congress.
McCain has proposed yet another cut in the capital gains tax -- from
15 percent to 7.5 percent. This would go overwhelmingly to rich
people, and would have little or no effect on economic growth. He also
wants to make permanent President Bush's tax cuts for rich households.
By contrast, Obama has proposed to cut taxes for everyone earning
under $250,000 -- about ninety-five percent of taxpayers -- and pay
for it with an increase on the five percent who make more than that.
With millions of Americans facing foreclosure notices on their homes,
insufficient and collapsed retirement savings, rising unemployment,
falling real wages, and what is likely the worst recession for at
least three decades -- it's getting tougher to distract voters from
the most important economic issues that affect their lives. Hence, the
Republicans' bad luck in the polls.
Mark Weisbrot is Co-Director and co-founder of the Center for Economic
and Policy Research. He received his Ph.D. in economics from the
University of Michigan. He is co-author, with Dean Baker, of Social
Security: The Phony Crisis (University of Chicago Press, 2000), and
has written numerous research papers on economic policy. He is also
president of Just Foreign Policy.
By Mark Weisbrot, AlterNet. Posted October 25, 2008.
Republicans push policies that redistribute income from working and
middle-class Americans to the rich. No wonder people are turning to
Obama.
Senator Barack Obama's campaign for the White House pulled ahead of
his opponent, Senator John McCain, as soon as the current financial
crisis hit the headlines. As one of McCain's top strategists recently
blurted out, "If we keep talking about the economic crisis, we're
going to lose."
There's a reason for this well-established trend that the Democrats
tend to win among those who vote on economic issues. Although both
parties are subject to undue influence from powerful corporate
interests, the Republicans have been much more consistent in
advocating government policies that redistribute income from working
and middle-class Americans to the rich. They are also much less
friendly to the most important government programs that insure people
against economic catastrophe, such as Social Security and Medicare.
These partisan differences are evident in the current presidential
campaign. On Social Security, McCain has in the past supported
President Bush's partial privatization plan, which was rightly
rejected as an attempt to undermine the nation's most important
anti-poverty program and social safety net. McCain has also undermined
Social Security by wildly misrepresenting its financial condition,
alleging that the program is "going broke." (For the record, according
to the non-partisan Congressional Budget Office, Social Security will
pay all promised benefits for the next 40 years without any changes
whatsoever. It would need only minor changes, less than those adopted
in each of the decades of the 1950s, 60s, 70s, and 80s to remain
solvent for 75 years).
Obama rejects privatization of Social Security -- as well as Medicare,
where the Republicans have increased the role of private insurance
companies by giving them wasteful taxpayer subsidies. On health care,
one of the most interesting features of Obama's proposal is the
establishment of a public insurance program similar to Medicare, which
employers and uninsured individuals could buy into. This would be
subsidized and could be an important step towards universal health
insurance.
McCain wants people to buy their own private health insurance. He is
willing to give them a subsidy from the government, but the $5000 he
offers is far less than the $12,500 it costs to insure a typical
family. Even worse, he proposes to tax the health insurance benefits
provided by employers, which are currently tax-free. This would be a
hefty tax increase for tens of millions of working Americans. It also
puts at risk the health insurance of many of the 160 million people
who depend on employment-based insurance policies.
McCain has also been reluctant to support a fiscal stimulus that will
be necessary to limit the size and duration of the current downturn.
This could be a costly mistake. As consumers cut back on spending --
which is already happening this quarter -- the recession will deepen
unless the government is willing to make up for it. Obama has proposed
a stimulus package that is too small, but will almost certainly
support larger plans that will come from the Democratic Congress.
McCain has proposed yet another cut in the capital gains tax -- from
15 percent to 7.5 percent. This would go overwhelmingly to rich
people, and would have little or no effect on economic growth. He also
wants to make permanent President Bush's tax cuts for rich households.
By contrast, Obama has proposed to cut taxes for everyone earning
under $250,000 -- about ninety-five percent of taxpayers -- and pay
for it with an increase on the five percent who make more than that.
With millions of Americans facing foreclosure notices on their homes,
insufficient and collapsed retirement savings, rising unemployment,
falling real wages, and what is likely the worst recession for at
least three decades -- it's getting tougher to distract voters from
the most important economic issues that affect their lives. Hence, the
Republicans' bad luck in the polls.
Mark Weisbrot is Co-Director and co-founder of the Center for Economic
and Policy Research. He received his Ph.D. in economics from the
University of Michigan. He is co-author, with Dean Baker, of Social
Security: The Phony Crisis (University of Chicago Press, 2000), and
has written numerous research papers on economic policy. He is also
president of Just Foreign Policy.