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Divided They Stand: A Candidate Comparison

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The Tampa Tribune

Published: November 2, 2008

FEDERAL REGULATION

McCAIN: Typically an opponent of government regulations, he has promised tougher ones for the financial industry in response to the current crisis. Though he has not been specific, McCain has said he would reduce the number of federal agencies overseeing banks, thrift institutions and markets to make accountability clearer while imposing tougher capital and disclosure requirements.

He wants more corporate-governance rules, including one to let shareholders set executives' compensation. He supports new criminal penalties for predatory lending. He would create a Mortgage and Financial Institutions Trust to identify struggling companies to help avoid bankruptcies.

When he splits up Fannie Mae and Freddie Mac and sells the pieces to the private sector, as he has said he would do to help resolve the housing-loan crisis, they would be stripped of their implicit guarantees of government backing.

OBAMA: He called for the restructuring of the financial regulatory system months before the housing and credit squeeze spiraled into an economic crisis. While offering few details, he outlined six principles: consolidating the regulatory agencies; establishing tougher liquidity, capital and disclosure requirements for financial institutions; subjecting unregulated businesses such as hedge funds, mortgage brokers, derivatives dealers and credit rating agencies to federal oversight; increasing penalties for market manipulation and predatory lending; creating a new financial market oversight commission to review conditions regularly and advise the president and Congress about potential risks; and giving shareholders a greater say in executives' compensation and who sits on corporate boards.

Obama has not said what form Fannie Mae and Freddie Mac should take after the housing market recovers.

Context: Both promise to streamline a regulatory system that splits enforcement among a half-dozen entities. Neither has said which agencies might be closed or merged. Both would attempt to limit executives' pay.

TAXING AND SPENDING

McCAIN: He would extend the Bush tax cuts of 2001 and 2003 and cut the corporate income tax rate to 25 percent from 35 percent, repeal the alternative minimum tax and double the deduction for dependents.

One of his most costly promises is a $5,000 tax credit for families to buy health insurance; McCain would offset the expense by taxing employer-provided health benefits as income and by trimming Medicare and Medicaid.

He has proposed freezing domestic spending in his first year and cutting roughly $100 billion more a year in unspecified spending cuts to balance the budget by 2013, a promise that budget analysts say is unrealistic. McCain's biggest spending priority is to enlarge the military, and he proposes increases for some education and energy programs.

OBAMA: He would extend the Bush tax cuts for people making less than $250,000 a year, but would repeal them for people in the top two tax brackets before their scheduled expiration two years from now. He would provide new tax breaks for homeowners who do not itemize deductions and for saving, college costs and new farmers.

He would change the alternative minimum tax so it does not affect the middle class. To raise revenue, in addition to repealing the top tier of the Bush tax cuts, Obama would raise taxes on capital gains and dividends.

His big-ticket spending item, at more than $100 billion a year, is his plan for universal health care coverage. He also proposes increases for education, infrastructure, research, foreign aid and the military.

Context: The nonpartisan Tax Policy Center estimated that McCain's plans would reduce revenue by as much as $7 trillion over a decade, and Obama's by up to $2.9 trillion. The center said the McCain tax cuts might spur domestic investment, but that bigger deficits might "negate any positive effect"; Obama's incentives, it said, could increase the labor supply but give further breaks to "an already favored group, seniors."

HOUSING CRISIS

McCAIN: He says the causes of the credit crisis include irresponsible lenders and greedy Wall Street firms, as well as the unchecked growth of Fannie Mae and Freddie Mac, the government-sponsored mortgage finance companies being bailed out.

Among his proposals for restoring the banking system:

•Stabilize Fannie and Freddie, break them up and sell them.

•Have the government buy up to $300 billion of subprime mortgages for homeowners who have fallen delinquent or face huge increases in payments. The Treasury then would refinance homeowners with cheaper mortgages.

•Enact $52 billion worth of new tax cuts to jump-start the economy, including a reduction of the capital gains tax by half, to 7.5 percent, and a reduction of the tax on retirees' withdrawals from pension funds, to 10 percent.

•Establish a commission on regulatory reforms.

OBAMA: He traces the crisis to lax government regulation both of mortgage lenders, which allowed them to make deceptive loans that homebuyers could not afford, and of Wall Street firms and banks that bought bad loans and repackaged them as securities.

His proposals include:

•Support the $700 billion rescue package for financial institutions and President Bush's decision to inject $250 billion into banks.

•Tighten laws against mortgage fraud and abusive lending practices; increase financing for enforcement; toughen criminal penalties.

•Give bankruptcy judges the power to modify and reduce mortgages.

•Require lenders to provide simpler disclosures of loan costs and interest rates.

•Provide a 10 percent mortgage interest tax credit for people who cannot itemize.

•Enact a $60 billion stimulus package that would include $1,000 tax rebates and money to develop renewable energy sources and public infrastructure such as highways, mass transit, bridges and schools.

Context: Although Fannie Mae and Freddie Mac used their implicit guarantees of federal support to take risks that proved excessive, the bulk of subprime mortgages that fueled the crisis were financed by private-sector rivals.

CLIMATE CHANGE

McCAIN: In co-authoring legislation in 2003 to cap greenhouse gases, he said at a hearing: "It is time for the United States government to do its part to address this global problem, and a discussion of mandatory reductions is the form of leadership that is required."

This year, he has sometimes appeared to soften his stance. At a news conference in June, he said: "I believe in the cap-and-trade system, as you know. I would not at this time make those - impose a mandatory cap at this time. But I do believe that we have to establish targets for reductions of greenhouse gas emissions over time."

His climate plan, like his opponent's, includes a declining ceiling for emissions and allows polluters who surpass targets to sell credits to others who have fallen short. But under the McCain plan, the initial emissions permits would be given away, not sold, saving billions of dollars for the industries affected. Targets also could be achieved by investing in carbon offsets, which are produced by avoiding emissions elsewhere.

OBAMA: He envisions legislation that leaves scant wiggle room on emissions cuts and exacts a price from the start for emissions permits. He would use $15 billion a year from those proceeds to promote nonpolluting energy sources and cut energy waste.

In the second debate, Obama said investments in boosting energy efficiency and the use of nonpolluting sources would be part of his economic recovery plan and would not be sacrificed, even under a constricted budget.

But he has been criticized by climate activists for statements about pursuing "clean coal" as a climate strategy, one that McCain also advocates. The phrase "clean coal" historically has applied to capturing sulfur dioxide and other contaminants released by burning coal. Capturing carbon dioxide, the main heat-trapping emission, is far harder.

Context: It is hard to see how legislation that, by design, raises the cost of energy will take hold in Congress while the economy is in turmoil.

ENERGY POLICY

McCAIN: Although it draws a snappy chant from supporters at his rallies - "Drill, baby, drill!" - his approach is broader and more nuanced. He does support increased and immediate oil exploration on public lands and off the coasts. But unlike his running mate, Gov. Sarah Palin of Alaska, he opposes oil exploration in the Arctic National Wildlife Refuge.

McCain advocates adding as many as 45 nuclear power plants, which would reduce consumption of fossil fuels, chiefly coal and oil, and the greenhouse gases they release. He says the Navy's 50-year history with nuclear-powered ships proves the technology is safe. McCain supports increased use of renewable energy sources but opposes large government subsidies.

OBAMA: Oil companies, he said, should exploit existing leases on public lands and off the coasts before new areas are opened. He, too, opposes drilling in the Alaska refuge. Unlike McCain, he supports a windfall profit tax on oil companies.

Obama does not oppose expansion of nuclear power in principle, but says it must be done safely and economically, considerations that for decades have halted construction of nuclear plants. Obama advocates spending $15 billion a year for the next 10 years to develop alternative-energy businesses, which he says will produce millions of new jobs. Obama, who is from Illinois, a big corn-producing state, supports federal subsidies for ethanol production. He also supports requiring utilities to produce about 20 percent of their electricity from renewable sources by 2020. And he backs higher fuel-efficiency standards.

Context: Although the two agree that the nation must wean itself from a $700-billion-a-year addiction to imported oil, they disagree on how to do it. McCain backs using the tax code to encourage oil drilling, and Obama would use the proceeds from a windfall profit tax on oil companies to finance alternatives.

IRAQ AND AFGHANISTAN

McCAIN: America must pursue victory in Iraq first, he said, and worry about bringing troops home after. He has sharply criticized Obama's timeline for withdrawal, arguing that American generals must have the flexibility to decide when withdrawal would be possible.

"I do not want to keep our troops in Iraq a minute longer than necessary to secure our interests there," McCain writes on his Web site. "Our goal is an Iraq that can stand on its own as a democratic ally and a responsible force for peace in its neighborhood."

He has argued that a premature withdrawal could have "calamitous consequences to the Iraqi people."

McCain also has said that he would increase the number of troops in Afghanistan.

OBAMA: America must shift its defense resources from Iraq to Afghanistan, he said, which he sees as ground zero for any war on terrorism. He says he would remove one or two brigades a month from Iraq, and get all combat troops out within 16 months. "The only troops I will keep in Iraq will perform the limited missions of protecting our diplomats and carrying out targeted strikes on al-Qaida," he said.

He also promised a diplomatic initiative with regional allies and even foes to seek a more stable Iraq.

In Afghanistan, he has promised to ramp up the American military effort, particularly on the Pakistani border, and has said that if America received intelligence about suspected al-Qaida operations in Afghanistan and Pakistan, he is prepared to act on it.

Context: Most foreign policy experts say McCain has Obama on Iraq, and that Obama has McCain on Afghanistan and Pakistan. Obama's insistence on withdrawing U.S. combat troops from Iraq on a fixed timeline, they say, could jeopardize gains made over the past 18 months. Still, many experts credit Obama's argument that a timeline for withdrawal would force Iraqi politicians to get their act together.

IRAN

McCAIN: He has called for strong sanctions on Iran to prevent it from becoming a nuclear-weapons state and has strongly hinted that he would be willing to act militarily. "There's only one thing worse than the United States exercising a military option," he has often said. "That is a nuclear-armed Iran."

He also has insisted that he would not negotiate with the Iranians without preconditions, and that Obama is "naive" if he thinks he can just sit down with the Iranian leadership and reach agreement.

But McCain's aides say that if Iran's behavior changed radically, the senator would "consider" whether Iran could one day be trusted to produce nuclear fuel.

OBAMA: He has said he would do anything in his power to keep Iran from acquiring a nuclear weapon, and has spent much of the campaign defending his willingness to negotiate with Iran. He argues that a big mistake the Bush administration made was being unwilling to talk to enemies. When Bush finally relented in the case of North Korea, he has said, the United States began to make small progress.

But Obama also has said he would keep "all options on the table," the code words for possible military strikes, and he has said that at the end of a negotiation, Iran should not be producing any nuclear fuel. His aides stress the need to make clear to Iran how it might benefit by abandoning its nuclear ambitions and ending its support for terrorism.

Context: Both have been less than specific about three big issues. How to gain leverage against Iran; what military action, if any, might work; and what to do if Iran achieves the most likely scenario of acquiring the fuel and technology for a bomb, but not building or testing one.

RUSSIA

McCAIN: He argues for a confrontational response to Russia's retreat from democratic practices and its efforts to intimidate neighbors, even as he promises not to restart the Cold War. "I looked into Mr. Putin's eyes, and I saw three letters, a K, a G and a B," he said in the first presidential debate, mocking Bush's initial expression of optimism about the Russian leader, Vladimir Putin, in 2001. He also accused Obama of "a little bit of naivete" for initially urging that both sides show restraint as Russia overran much of Georgia last summer.

McCain has threatened to kick Russia out of the Group of 8 industrial nations and isolate it in other ways. He also wants to speed up NATO membership for Ukraine, a step that would infuriate the Kremlin.

OBAMA: He has pledged support for Russia's neighbors, but he has emphasized doing so in a united front with Europe, which means taking a less hawkish tone than McCain's. Obama also has said that in the long run, if Western countries could make themselves less dependent on Russian oil and natural gas, the Kremlin would have less power to intimidate its neighbors.

The Obama campaign also argues that the United States and Europe have essential goals for which they must have Russian cooperation - pursuing arms control, reining in Iran's nuclear program, fighting terrorism, building trade - and that Bush failed in these areas because he over-emphasized a personal relationship with Putin.

Context: Although Obama and McCain criticize Bush for relying on a personal relationship with Putin, and both strenuously criticize Russia's manhandling of Georgia, there is a stark difference between them: McCain's arguments emphasize the view that Putin was never worthy of trust. For Obama, there is no escaping the need for Russian-Western cooperation.

HEALTH CARE

McCAIN: He would upend the tax treatment of health benefits to give all consumers the same advantages, whether they purchase insurance through employers or not. He would eliminate the provision that allows workers to exclude employer-sponsored benefits from taxable income, replacing it with tax credits worth $2,500 per individual and $5,000 per family. He would let consumers purchase policies across state lines.

The McCain campaign argues that the tax changes will stoke competition in the individual market, lower prices and make coverage more affordable for the uninsured. Those with pre-existing health conditions who cannot obtain private insurance would be covered through a "guaranteed access plan." It would put federal dollars behind the kinds of high-risk pools that operate in many states, often with inadequate financing.

McCain would seek to control health costs by limiting malpractice damages, investing in prevention and chronic-disease management, and encouraging the faster introduction of generic drugs.

OBAMA: He would prohibit insurance companies from denying coverage on the basis of health or age. He would mandate insurance for children. He also would require employers to cover their workers or pay a payroll tax to help subsidize government coverage for the uninsured. Some small businesses would be exempt and would be offered tax credits to provide coverage for workers.

Obama would strive for universal coverage by establishing a new federal health plan for the uninsured, providing benefits comparable to those for federal employees. Premiums would be subsidized for low earners. Eligibility for other public programs - Medicaid and the State Children's Health Insurance Plan - would be expanded. Among his proposals is a $50 billion investment in health-information technology over five years.

Obama would pay for much of his plan by raising income taxes on those earning more than $250,000.

Context: The candidates' health positions reflect the wide gulf between McCain's devotion to free markets and Obama's embrace of a larger government role.

SUPREME COURT

McCAIN: He has praised Chief Justice John G. Roberts Jr. and Justice Samuel A. Alito Jr., both conservatives, and has said he will appoint justices with "a history of strict adherence to the Constitution." He also has criticized judicial assertions of power at the expense of the executive branch, Congress and the states.

On specific legal issues, he has said that the president must obey laws enacted by Congress and has vowed not to issue presidential signing statements. Bush has used those statements to reserve the right not to enforce laws he thinks violate the Constitution. McCain opposes Roe v. Wade and would limit the right to abortion to cases involving rape, incest or danger to the mother's life. He called the court's decision in June granting habeas corpus rights to prisoners at Guantanamo Bay "one of the worst decisions in the history of this country." He also signed a brief that successfully urged the Supreme Court to strike down a District of Columbia gun control law. He opposes same-sex marriage and some forms of civil unions.

OBAMA: He has praised members of the court's liberal wing and criticized a conservative, Justice Clarence Thomas; he says he would appoint justices with "the empathy to understand what it's like to be poor, or African-American, or gay, or disabled, or old," and has said the Constitution is "not a static but rather a living document."

Specifically, he has said the Bush administration has made "extreme and implausible" claims about executive power but that presidential signing statements have legitimate uses. He supports Roe v. Wade but would allow states to limit or prohibit abortions in late pregnancy, with exceptions for the health of the mother. He has praised the Supreme Court's decision in June to grant habeas corpus rights to prisoners at Guantanamo Bay, asserted that the Second Amendment protects an individual right to possess guns, and opposed gay marriage, though he has also opposed efforts to ban it.

Context: The conventional wisdom is that three justices may step down in the next few years - John Paul Stevens, 88; Ruth Bader Ginsburg, 75; and David H. Souter, 69. Each is among the court's more liberal members.

The New York Times

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