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Obama's Economic Plan Is A Pitch to the Working Class
The series of proposals were on issues from tax reform and private savings to bankruptcy, trade and investment in the nation's infrastructure. He said he could pay for "every single element of this economic agenda" -- primarily by ending the Iraq war and by increasing taxes on corporations and the wealthiest Americans.
Clinton's campaign quoted a McCain economic adviser as dismissing Obama's proposals as "the most shameless piece of potential plagiarism" that he had seen because of its similarity to Clinton's own plan.
The newest element of his proposal was the establishment of a National Infrastructure Reinvestment Bank, which would spend $60 billion over a decade to rebuild deteriorating roads, bridges and waterways. Obama said the spending would generate 2 million new jobs, many of them in a construction industry that has been hard hit by the housing market downturn.
Some state and local governments have established separate infrastructure accounts that are not subject to balanced-budget rules as a way to finance long-range building projects. Lawmakers in Congress from both parties have flirted with the idea of a federal infrastructure account, but have backed off for fear of being accused of budgetary gimmickry designed to mask an expansion of government -- and of the federal budget deficit.
Obama took a page from the 2004 presidential campaign of Sen. John F. Kerry (D-Mass.), promising to fund his spending by ending tax breaks that he says encourage companies to invest overseas.
Many economists and some business officials agree that companies are reaping tax benefits from overseas expansion. Before Kerry offered his proposal in 2004, Citigroup executives told industry analysts the banking firm had lowered its effective tax rate from 31.3 percent to 30.6 percent, boosting quarterly income by $52 million, by putting more money into overseas operations.
The shift could provide more money for job creation at home, as Obama suggests, but few would say that taxes are a primary -- or even a significant -- factor in the movement of certain kinds of outsourcing. For instance, even sweet tax incentives cannot stop some companies from seeking vast savings abroad.
Obama's suggestion that he would finance long-term federal spending programs by ending the war in Iraq pushed the war debate into the realm of fiscal policy, a popular notion on the campaign trail but debatable from a budgeting point of view, since war funding is relatively temporary.
It also opened up Obama to traditional criticism from Republicans who called him a "Big Government" Democrat. The Republican National Committee unveiled a "Barack Obama spend-o-meter" on its Web site yesterday, tallying his total proposals at $850.35 billion.
Murray reported from Washington. Staff writer Jonathan Weisman and staff researcher Madonna Lebling contributed to this report.