Candidates' Economic Plans Don't Add Up


Voters have cited the economy as their top issue in every Democratic contest so far, except the Iowa caucuses, where it tied with Iraq as the top issue.

Housing Crisis

In an effort to gain the upper hand on the issue, both Democratic candidates have announced plans to combat the subprime mortgage crisis that has led many homeowners into foreclosure.

Clinton and Obama have blasted McCain for arguing against widespread government intervention in dealing with the home mortgage and foreclosure crisis.

McCain said Wednesday his differences with Obama's plan are a "classic contrast between a far left, liberal Democrat and a conservative Republican."

"Sen. Obama believes that the government should do everything, I believe that the government should do as little as possible," he said Wednesday.

Obama has proposed a $10 billion fund to help lenders rework existing subprime loans into 30-year, fixed loans and crack down on mortgage fraud and predatory lenders.

Clinton has proposed a $30 billion emergency fund to help states combat home foreclosures as they see fit. She has called for a 90-day halt on subprime foreclosures and a five-year freeze on subprime interest rates.

"In March of last year she was out saying that this was a much more serious problem that was going to have greater spillover effects and calling for very specific policies including modernizing the Federal Housing Administration, including a foreclosure timeout, including measures to deal with predatory lending," Clinton's economic adviser Gene Sperling told ABC News. "She was ahead of the curve."

'Too Late to Be Effective'

However some economists argued Clinton's moratorium on home foreclosures would come too late to be effective, and said none of the candidates have a concrete plan to fix the banking system and the regulatory regime.

"In order to understand Obama's economic policies, you have to be a mystic," said Morici.

"There's a lot of beef in Clinton's policies but she wants to take us back to the '70s -- free medical care, tax the big corporations," Morici said. "If you add up what all her proposals are going to cost, it's just not possible."

So far, Clinton, a self-described policy wonk, has the most detailed economic plan, including proposals for universal health care, a universal 401(k), health- and child-care credits, green jobs, college tax credits and increased paid family leave by 2012.

"Our goal was to show that we could have a progressive agenda for American working families while moving back towards balance," Sperling told ABC News.

McCain to Unveil Economic Plan

A senior adviser to McCain said the presumptive Republican nominee will roll out more details about his economic policy over the next two months with a series of speeches on economics, education, environment and energy.

"Sen. McCain's basic approach is to have a reliance on the capacities of American workers and firms and small businesses to make sure the government remains relatively small," McCain's senior domestic and economic policy adviser Douglas Holtz-Eakin told ABC News.

McCain has acknowledged in the past that he knows more about foreign policy and national security than economics. Both Democratic candidates have blasted McCain for quipping that economics is not his strong suit.

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