Barack Obama has entered the discussion about economic aid to avert a potential recession by announcing his own version of a stimulus plan. Not surprisingly, it is very close to the plan already touted by Democrats.
Obama’s plan would allow each worker in the US a $250 tax credit to offset payroll (Social Security) tax paid on the first $8,100 of earnings. He has urged an additional $250 tax credit per worker if employment continued to decline. Since the plan is payroll, not income tax, dependent, Obama would also extend the credit to seniors who would otherwise not benefit as retirees.
Obama also proposes $10 billion in assistance for homeowners facing foreclosure and an additional $10 billion to help states and local governments facing budget problems as a result of the housing crisis. Sales tax and other revenues have declined as housing prices dip, forcing many state and local governments to look elsewhere for funding.
An additional $10 billion would be used to extend unemployment insurance.
In what feels like an effort to one up his closest rival, Obama’s tax and economic plan totals around $120 billion (Clinton’s plan, announced days before, would cost around $110 billion). The plan as proposed by the current president, Bush, will cost about $150 billion and includes more tax cuts for businesses.
