Rival Plans to Help Struggling Families

Barack Obama and John McCain this week revealed plans aimed at trying to help US families suffering from the economic crisis. The plans were the most detailed yet from two candidates who have little background in economics and who have struggled to come up with policies that have resonated with the US public. The McCain plan, unveiled yesterday and a day later than the Republicans intended, is costed by his team at $52.5bn (£30bn). The Obama plan, announced on Monday, is costed by his team at $60bn.

Mortgages: An estimated 14 million American families are in trouble with their mortgages. McCain is proposing to buy mortgages directly from homeowners and mortgage companies and replace them with more manageable fixed-rate mortgages. Obama is also promising help for those in danger of losing their homes but is suggesting a three-month moratorium on repossessions.

Pensioners and struggling families: Pensioners are among those most directly hit by the stock market crash on Wall Street as well other bourses across the globe. But other families too are suffering from higher petrol prices, job losses and mortgage foreclosures. McCain is suggesting help for people aged 59 and over by lowering taxes to 10% on those who dip into retirement funds to help them through the present financial crisis. He also plans to suspend tax rules that force them to sell stocks as part of their retirement funds at a fixed date, which would penalize them given the low prices at present. Obama's plan is similar, but a significant difference is that his proposal applies to all, not just those over 59. He is proposing to provide immediate relief for struggling families by allowing everyone to dip into their retirement funds.

Jobs: Unemployment is predicted to reach 8% by the end of the year. McCain and Obama are proposing to scrap taxes on unemployment benefits, albeit only temporarily. Obama is proposing a job creation plan along the lines of the New Deal. This would involve federal lending to states for programs to repair the country's crumbling infrastructure, including bridges, roads and schools. In addition to this, Obama is to offer a $3,000 tax credit for companies taking on new employees. He would also double loans to US car companies to help keep them afloat.