PEP, July-August 2008: McCain or Obama: Our choice is clear

By ALFREDO ALVARADO

With unemployment hitting 5.5 percent in May, gasoline climbing toward $5 a gallon and more than 1 million Americans losing their homes to foreclosure, the economy has now surpassed the war in Iraq as the most pressing issue facing the country and the candidates for president.

Some economists and members of the Bush administration may quibble over whether today’s dismal economic situation is technically a recession, which is defined by the National Bureau of Economic Research as “a significant decline in economic activity spread across the economy and lasting more than a few months.” Still, there is no doubt as to who is feeling the brunt of the current economic slump — the American worker.

Government jobs threatened
During April, the economy lost 20,000 jobs, the fourth consecutive month of losses. From manufacturing to the financial “services” of Wall Street, few sectors have been spared, and falling tax revenues threaten government jobs.

Young people from 16 to 19 have been hit hardest, with their unemployment rate climbing to 18.7 percent in May from 15.4 percent in April, according to the U.S. Labor Dept. Unemployment among African Americans jumped to 9.7 percent from 8.6 percent during the same period.

So how do presidential candidates John McCain and Barack Obama plan to tackle the deepening economic crisis facing working people?

Arizona Sen. McCain wants to extend Bush’s tax cuts for the rich, which are scheduled to expire in 2010. “I think it’s very important that we make the Bush tax cuts permanent,” he said during the Republican presidential debates on MSNBC.

Illinois Sen. Obama wants to stop the growing economic tilt toward big business and big incomes. He would repeal the Bush tax cuts for households earning over $250,000 and make the rich pay the same Social Security taxes as working people by applying the tax to incomes over $250,000.

Instead of continuing the windfalls for the wealthy, Obama would extend middle-class tax cuts, like the $1,000 child tax credit. His plan to eliminate taxes on elderly Americans who make under $50,000 would provide relief to seniors.

Obama would invest in technology
While Obama addresses the needs of the majority of working people, McCain’s economic proposals are skewed to accommodate the monied elite. He calls for cutting taxes on corporate profits to 25 percent from 35 percent; 58 percent of the savings would go to the top 1 percent of taxpayers. In contrast, Obama plans to close corporate tax loopholes (which McCain would leave untouched) and raise the capital gains tax (on stock profits, for example) to 20 percent from 15 percent.

To get the economy back on track the Democratic nominee is calling for a $50 billion economic stimulus plan that would include tax cuts and rebate checks for middle-income Americans, aid for the unemployed and subsidies for those who cannot afford health insurance. To develop alternative sources of energy, Obama has also proposed a job-creating energy-technology investment program of $150 billion over 10 years for non-oil-using power plants.

McCain's backward economics
McCain voted with President Bush 95 percent of the time in 2007. His overall economic plan would reduce federal revenue by more than $5 trillion over 10 years, according to the nonpartisan Tax Policy Center, threatening severe cuts in health, education and social services.

McCain has health care economics backwards. First he would make employer-provided health benefits part of recipients’ taxable income, creating a new tax on working people. Then he would cancel the tax breaks that encourage employers to provide health insurance for their workers. Instead, he would give out $5,000 tax credits and leave people to buy their own private insurance.

“The tax credits he’s talking about would not be enough for a lot of people to afford coverage,” said Paul B. Ginsburg, president of the nonpartisan Center for Studying Health System Change.

McCain — just like Bush — wants to privatize Social Security. The AFL-CIO’s Alliance for Retired Americans points out that in 2006, McCain voted to shift Social Security’s annual surpluses into private investment accounts, leaving retirees at the mercy of the stock market.

“When you look at McCain’s record on the issues instead of his rhetoric on the stump, it’s obvious he’s just another Bush,” said Gerald W. McEntee, president of AFSCME, DC 37’s parent union. “McCain and the high-priced lobbyists who run his campaign promise us four more years of destructive economic policies at home and 100 more years of occupation in Iraq,” McEntee said.

While the Arizona senator has been called a maverick and a moderate, his economic plan is simply the anti-labor Republican model of George W. Bush and Ronald Reagan.

Needs of working people addressd
“Our choice is clear,” said DC 37 Executive Director Lillian Roberts. “We can elect John McCain and have four more years of George W. Bush’s disastrous policies, or we can elect Barack Obama, who cares about the needs of working people.”