Republican presidential candidate John McCain proposed during Tuesday night’s debate using $300 billion of the $700 billion of the financial bailout money to buy up bad home mortgages, instead of rescuing the financial markets.
“I would order the secretary of the Treasury to immediately buy up the bad home-loan mortgages in America and renegotiate at the new value of those homes — at the diminished values of those homes — and let people be able to make those payments and stay in their homes,” he said.
Democratic nominee Barack Obama last month sounded a similar theme, proposing that the government consider taking such a step.
But McCain’s approach was far more unequivocal.
A background paper provided by the McCain campaign said the plan “could be implemented quickly as a result of the authorities provided in the stabilization bill, the recent housing bill, and the U.S. government’s conservatorship of Fannie Mae and Freddie Mac.”
It was unclear, either from McCain’s remarks or from the backup materials provided by the campaign, how such a massive plan would be administered. Though McCain, a budget hawk and critic of rising federal spending, did concede one point. “Is it expensive? Yes,” he said.
Source: The Associated Press, Jim Kuhnhenn
As the race for the presidency shapes up as a contest between Sen. John McCain, the presumptive Republican nominee, and Sen. Barack Obama, who will claim the Democratic nomination, here are their initial positions on housing and related economic issues.
1. Proposes to spend up to $10 billion to allow some home owners to trade high-interest, adjustable-rate mortgages for fixed-rate loans.
2. Proposes a suspension of the 18.4-cent federal gas tax and 24.4-cent diesel tax during the summer.
3. Supports a middle-class tax cut by doubling the personal tax exemption for dependents to $7,000.
4. Calls for a simpler tax system with two tax rates and a generous standard deduction.
5. Supports making permanent the 2001 and 2003 income tax cuts and proposes cutting the corporate tax rate to 25 percent from 35 percent and allowing businesses to immediately write off capital expenses.
6. Maintains that government assistance to the banking system should focus on preventing systemic risk that would endanger the financial system and the economy.
1. Calls for greater government regulation of the U.S. financial system and proposes a new $30 billion economic stimulus plan to help home owners, including a $10 billion foreclosure prevention fund to help people keep their homes and $10 billion in relief for state and local governments hit hardest by the housing crisis.
2. Outlines six “core principles for reform” that would give the Federal Reserve supervisory authority over any financial institution to which it might make credit available and calls for reform and streamlining of financial regulatory agencies.
3. Wants to repeal a provision in the bankruptcy law so ordinary families can modify terms of home mortgages.
4. Proposes a 10 percent mortgage tax credit for middle-class Americans.
Source: Reuters News