Vote 2008 ? Inside the Issues: Economy

January 23, 2008 12:27:13 PM PST
This week, we're stepping back from the day-to-day politics of the presidential race to look at where the candidates stand on the major issues.President Bush is proposing a $145 billion stimulus package. The chairman of the federal reserve is cutting interest rates. And, for the first time in several years, the economy is the most important issue to the voters - not Iraq or healthcare.

So a lot of the presidential candidates in both parties are rushing to get their revised economic plans on the table. The options include tax cuts, rebates, business incentives, a government stimulus package and a jobs program.

The prices of gas and food are up. Home foreclosures and unemployment are also higher. But consumer spending and the stock market are down. So the presidential candidates are reacting.

Over the weekend, former governor Mitt Romney unveiled a stimulus package that's bigger than what President Bush wants. Romney's $250 billion plan emphasizes tax cuts for businesses. But it also slashes the lowest tax bracket for individuals, from ten to 7.5 percent.

The other Republican candidates, including Senator John McCain, oppose a short-term government spending plan. Instead, McCain wants to lower the corporate tax rate from 35 to 25 percent.

Former New York City Mayor Rudy Guiliani said he would add to those initiatives a cut in the capital gains tax from 15 to 10 percent.

Former Governor Mike Huckabee wants to host a "going out of business" sale for the internal revenue service by eliminating all federal income and payroll taxes and replacing them with a national sales tax.

Republicans all want to make the president's tax cuts permanent. Democrats disagree, favoring short-term incentives that would entice consumers to spend money now.

Senator Barack Obama's $75 billion stimulus plan heavily relies on tax breaks, including a $250 tax rebate to workers and a one-time $250 bonus in social security payments. The plan also allots $10 billion to help stem the housing crisis.

New York Senator Hillary Clinton's $70 billion plan allocates $30 billion to states to help bail out families on the brink of losing their homes. The other $40 billion provides help including energy assistance and more unemployment benefits.

And finally, former Senator John Edwards wants Congress to pass at least $25 billion in new investments to create jobs and up to 75 billion more if the economy slips into a recession.