It must be noted that it is Senator McCain’s tax provision on health care credit that has caused “the bigger impact on cutting people’s taxes than any single proposal from either party” (qtd. in Hodge par. 8). Senator Obama, on the other, lists seven smaller tax credits to reduce taxpayers’ liability to nil (par. 9). Another basic agreement between the two candidates is their support for the $700 billion financial rescue package to AIG, the automobile makers, the capital and credit lines to the Federal National Mortgage Association, or Fannie Mae, and the Federal Home Mortgage Corporation, or Freddie Mac; and the Federal Home Loan Banks.
Fannie Mae, Freddie Mac, and the Federal Home Loan Banks are government-sponsored enterprises (SGEs) that “remain the true epicenter of the housing bubble and of its currently unfolding collapse” (Cochran par. 11). While Senator McCain, with the financial rescue package, proposes to buy up the bad mortgages from the SGEs and renegotiate their payment schedules (Luce 6) in order to give priority help to the homeowners (“Final Debate” 3), Senator Obama disagrees, saying, “… it could be a giveaway to banks if we’re buying full price for mortgages that are now worth a lot less” (4).
Senator Obama does not want to waste taxpayer money on it even if Senator McCain has stated that he wants to help those people keep their homes, about 11 million homes or more, and realize the American dream of owning a home (3). But if both candidates agree in giving more tax breaks to working class Americans and in supporting the financial rescue package, their respective plans diverge sharply when it comes to solving the huge deficit.
Without taking the cost of the rescue package, the estimated budget deficit for the current fiscal year is already over $400 billion, about 3 percent of the GDP (“Leaders” par. 4). To deal with this problem, Senator McCain will impose an across-the-board spending freeze, saying that the government has “completely gone out of control” in its spending; he has also expressed disapproval of the $10 trillion dollar debt that would be passed on to the younger generation (Final Debate 10).
Senator Obama differs with his opponent’s plan on imposing across-the-board spending freeze saying that his — McCain’s – plan sounds good but it is not possible and will not happen. Senator Obama has then indicated, on the subject of dealing with the budget deficit, that he would eliminate government programs that are not effective and retain and focus on the programs that work (11). The presidential candidates also differ on how they would deal with free trade agreements.
Senator Obama wants to unilaterally renegotiate the North America Free Trade Agreement, or NAFTA, as he wants to inject labor and environmental standards as part of the main agreement (“Obama Presidency” par. 3). With regards to the Colombia Free Trade Agreement, he opposes it because the agreement lacks labor and environmental protections; he is also wary of the human rights issues in Colombia where violence is “being perpetrated against workers who are just trying to organize for their right” (“Final Debate” 29).
Senator McCain, on the other hand, will honor the country’s international agreements, including NAFTA, an agreement that accounts for 33 percent of all American exports, because he supports the small businesses, made up of close to 97 percent of all U. S. exporters (“Leader We Can Believe In” pars. 7 & 2). He also supports the trade agreement with Colombia, an ally that assists the United States in its fight against drug cartels. Senator McCain has reiterated that the trade agreement with Colombia will not only create jobs for Americans but would also save the country a billion dollars or more a year (“Final Debate” 28).
Indeed, free trade provides simultaneous economic benefits to all partner-countries (Sowell 33) as Senator McCain’s message noted. With Senator Obama’s stand, the stark impression that one gets is that he favors trade protectionism; his policy on this is also a reminder of the many cases when laws are passed “restricting international trade for the benefit of some concentrated and vocal constituency, even though these restrictions may cause far more losses of jobs nationwide” (32).