Fighting to stay competitive with Barack Obama, John McCain on Tuesday unveiled a $52.5 billion economic plan to eliminate taxes on unemployment benefits, cut the capital gains tax rate in half for the next two years and lower the tax rate on withdrawals from retirement accounts.
“If I am elected president, I will help to create jobs for Americans in the most effective way a president can do this — with tax cuts that are directed specifically to create jobs and protect your life savings,” McCain told a small but boisterous crowd in suburban Philadelphia.
As the stock market has plunged over the last couple of weeks, McCain’s fortunes seemed to go with it. New polls show him slipping behind Obama in the Keystone State, as well as in Colorado, Michigan, Minnesota and Wisconsin.
Advisers to McCain say the polls have been wrong before and the candidate is fighting until the end.
“Political pundits have written off my campaign more times than I can count,” McCain said Tuesday morning.
The new approach to the economy, which would include a 100 percent guarantee for all savings accounts over the next six months, comes one day after Obama announced his new economic proposals and one day before the final presidential debate Wednesday at Hofstra University in New York.
McCain dismissed Obama’s proposals. “He is an eloquent speaker,” McCain said, “but even he can’t turn a record of supporting higher taxes into a credible promise to cut taxes.”
“We cannot spend the next four years as we have spent much of the last eight: waiting for our luck to change,” McCain said. “The hour is late and our troubles are getting worse. We have to act immediately. We have to change direction now.”
Obama’s campaign has continued to portray McCain as flailing, angry and political. A spokesman described McCain’s plan as “trickle-down, ideological recipes” that won’t help the middle class.
“John has nothing new to offer,” Obama’s running mate, Joe Biden, said in Warren, Ohio. “That’s why you’re seeing John McCain’s campaign becoming so erratic.”
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The candidates’ economic proposals
John McCain’s recovery plan
*A reduction of the tax on the first $50,000 taken from IRAs and 401(k)s to 10 percent
*A suspension of tax rules requiring seniors to begin withdrawing funds from their retirement accounts at age 701/2
*An acceleration of the tax write-off rules for investors who sell stock at a loss during the current downturn
*A cut in the capital gains tax for the next two years from 15 percent to 7.5 percent
*A mortgage program to help struggling homeowners by replacing their adjustable-rate loans with fixed-rate notes
*An elimination of taxes on unemployment benefits through 2009, affecting 3.6 million people
Barack Obama’s recovery plan
*A temporary tax credit for firms that create new jobs in the U.S. over the next two years
*New legislation to allow families to withdraw 15 percent of their retirement savings — up to a maximum of $10,000 — without facing a tax penalty this year (including retroactively) and next year
*Financial institutions that participate in the Treasury’s financial rescue plan should provide a 90-day foreclosure moratorium for any homeowners who are making good-faith efforts to pay their mortgages
*A lending facility to address the credit crisis; the Federal Reserve and Treasury should work to establish a facility to lend to state and municipal governments
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jzuckman@tribune.com
