What Obama stands for on economy

Here are some of the president-elect's ideas on 5 key economic issues.

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By Jeanne Sahadi, CNNMoney.com senior writer

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President-elect Barack Obama addresses supporters in Chicago upon his election.

NEW YORK (CNNMoney.com) -- After months of debating the issues, Americans went to the polls on Tuesday and elected Democrat Barack Obama to serve as the nation's 44th president.

The change in administrations, of course, comes at a critical moment for the U.S. economy -- and President-elect Obama will play a central role guiding it.

What follows is a sketch of Obama's most important proposals for dealing with the financial crisis, housing, taxes, health care and energy.

Financial crisis

Obama's response to the financial and economic crisis will be guided largely by the parameters set in the massive $700 billion financial rescue package passed by lawmakers and signed into law by President Bush in October.

He voted for that bill, but also then came out with a flurry of his own proposals to ease the growing strains felt on Main Street as a result of the crisis. Obama's are aimed at helping cushion Americans in the short-term against the stunning drop in stocks, the anticipated rise in layoffs and troubles making ends meet.

Among the temporary measures he proposed: exempting seniors from having to make withdrawals from retirement savings; exempting jobless workers from having to pay income taxes on unemployment benefits and calling for an extension of those benefits; and offering a tax credit to businesses for every new hire they make in the United States.

To spur more lending to small businesses, Obama proposed temporarily reducing or suspending the fees the Small Business Administration charges banks to participate in its flagship small business loan-guarantee program.

Housing and mortgages

As the housing market unraveled over the course of the campaign, Obama weighed in with a slew of proposals.

Obama called for the Treasury to require financial institutions receiving help from the financial rescue package passed in October to put a 90-day moratorium on foreclosures for homeowners "acting in good faith."

He has called for a change to the bankruptcy law that would let bankruptcy judges reduce mortgage principals for bankruptcy filers. Proponents say such a change would encourage lenders to modify more loans for troubled borrowers rather than risk the loan being rewritten by a judge. Opponents say the change could cause a rise in interest rates because mortgage investors would price in the risk of new loan terms.

Obama has also called for the creation of a fund to help state and local governments ward off foreclosures. And he wants to boost penalties and law enforcement to fight mortgage fraud.

He supported the government's takeover of mortgage giants Fannie Mae and Freddie Mac in September as a stop-gap measure. But he has called for reform of the agencies so that ultimately their public functions will be completely disentangled from their private ones.

More broadly, Obama has proposed giving a tax credit to homeowners who don't itemize deductions and don't get a tax break for the mortgage interest they pay.

Taxes

Obama has proposed a host of new tax cuts for lower- and middle-income Americans and has said he wants to preserve for them the ones put in place by President Bush in 2001 and 2003.

To help pay for many of the new programs he's proposing as well as the cost of his new proposed tax breaks, Obama has said he would repeal some of the Bush tax cuts for high-income taxpayers - specifically by increasing the top two income tax rates and the capital gains rate to their pre-2001 levels.

To help shore up funding for Social Security, Obama would raise the amount of money high-income tax filers pay into the system, but such a move would not go into effect for 10 years.

Obama wants to lessen the bite of the estate tax. And he supports protecting the middle class from the Alternative Minimum Tax.

He has said he would consider lowering the corporate tax rate if enough corporate tax loopholes are closed.

According to a nonpartisan study, only upper-income taxpayers would see a tax increase on average under Obama's tax proposals.

Health care

The Obama campaign describes his health care reform plan as one that builds on the existing employer-based system.

The plan does not call for changes for those Americans who already get their health insurance through their employer.

To help the uninsured or those who buy costly policies on their own, Obama would require large employers to either offer a plan or pay into a new national health care plans network from which their workers could get an affordable policy.

Obama said he also wants to offer an income-based federal subsidy for people who don't get insurance from an employer or who don't qualify for government plans like Medicaid.

His plan would offer small businesses a tax credit if they provide insurance for their workers, but it doesn't specify the parameters for what defines a small business.

The Obama plan would require that all children have health coverage, but it doesn't specify what the penalty would be for parents if they didn't buy coverage for their kids.

Energy

Obama has said he wants to make long-term investments in clean energy and energy efficiency.

He proposes investing $150 billion in renewable energy over the next 10 years, and requiring that a tenth of the nation's energy come from renewable source by 2013. By 2020, he wants to reduce the nation's demand for electricity by 15%.

To reduce greenhouse gases, Obama favors a cap-and-trade auction to limit companies' carbon emissions. He wants to use the money raised from companies buying carbon permits to help fund research and development in green energy and speed the commercialization of solar, wind and other green technologies.

Obama's stated goal: by 2050, carbon emissions should be down to a level that is 80% below where they were in 1990.

Did you vote for Obama? How do you think the new president will affect your wallet? What do you think Obama needs to do to fix the economy - both in the short run and the long term? What should be first on the new Congress's agenda? E-mail us your thoughts, including your name, photo and contact info; the best answers will be featured in an upcoming CNNMoney.com article.  To top of page

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