Obama Pitches Middle Class Rescue Plan

By Natalie Gewargis

Oct 13, 2008 3:34pm

Taking a break from debate prep in the red state of Ohio, Sen. Barack Obama, D-Ill., this afternoon in Toledo, outlined a new rescue plan for the middle class intended to immediately stabilize the financial system and provide relief to struggling families.

Obama outlined four proposals that can be enacted quickly – and urged Congress to do just that.

“Congress should pass this emergency rescue plan – the rescue plan for Main Street – as soon as possible," Obama said, pushing this economic message to a crowd of approximately 3,100 at Sea Gate Convention Center. "If Washington can move quickly to pass a rescue plan for our financial system, there’s no reason we can’t move just as quickly to pass a rescue plan for our middle-class.”

In the new proposal Obama calls for a temporary tax credit of $3,000 per job for firms that create new jobs in the US over the next two years.

“It’s a plan that begins with one word that’s on everyone’s mind, and it’s easy to spell, J-O-B-S. Jobs,” Obama said.  “Instead of tax credits and tax breaks to companies that ship jobs overseas what we’re going to do is say to American companies for each new employee you hire in the United States over the next two years you are going to get a tax break that makes sense.”

Second, in a proposal that follows Senator McCain’s lead, Obama called for legislation that would allow families the ability to withdraw 15% of their retirement savings from their IRAs and 401(k)s – up to a maximum $10,000 — without facing a penalty.

“I want to give credit where credit is due, I welcome Senator McCain’s proposal to waive the rules that currently force our seniors to withdraw from their 401(k)s even when the market is bad. I think that’s a good idea, but I think we need to do even more.”

Third, Obama’s plan would require those companies receiving government aid from the recent $700 billion Troubled Asset Relief Program to bring relief to homeowners by providing a 90-day foreclosure moratorium for homeowners acting in “good faith” to pay their mortgages. 

“If you are a bank or lender that is getting money from the rescue plan that passed Congress, and your customers are making a good-faith effort to make their mortgage payments and re-negotiate their mortgages," Obama said, "you will not be able to foreclose on their home for three months. We need to give people the breathing room to get back on their feet.

Last, the Obama plan would urge the Federal Reserve and the Treasury Department to establish a facility to lend to state and municipal governments.

“I believe that Treasury should not limit itself to purchasing mortgage-backed securities – it should help unfreeze markets for individual mortgages, for student loans, for car loans, and for credit card loans," said the Illinois Democrat. "And I think we need to do even more to make loans available to two very important areas of our economy: small businesses and communities.”

Obama – who regularly preaches tough love to audiences– said that people need to take responsibility for their own financial situation; that the crisis on Wall Street and Main Street has contributed to their woes – but now is the time for fiscal responsibility in their own lives.

“We’ve lived through an era of easy money, in which we were allowed and even encouraged to spend without limits; to borrow instead of save," Obama said. "Now, I know that in an age of declining wages and skyrocketing costs, for many folks this was not a choice but a necessity. People have been forced to turn to credit cards and home equity loans to keep up, just like our government.”

Obama told the crowd that his opponent has already made his choice on how to handle the economic crisis by instead focusing on attacking Obama’s character.

The mention of his opponent solicited widespread condemnation from the crowd, which Obama tried his best to calm down.

“Now we don’t need that,” Obama said to then, “we just need to vote, that’s what we need to do.”

Obama will spend most of the next two days in Toledo, Ohio, preparing for Wednesday night’s debate in Hempstead, NY.

– Jake Tapper and Sunlen Miller

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