(TOLEDO, OHIO) Barack Obama unveiled a four part economic plan this morning intended to provide immediate relief for the working class.
Emphasizing the urgent needed to help fix the ailing economy, Obama said today, "We've got to act now. We need to pass an economic rescue plan for the middle-class and we need to do it, not five years from not next year, we need to do it right now."
Obama's plan includes providing companies who create new jobs a temporary tax credit, as well as allowing penalty-free withdrawals from IRAs and 401Ks. John McCain has also proposed a similar plan to waive rules on 401K withdrawals, but it would only applies to senior citizens. "I think that's a good idea, but I think we need to do even more," Obama said.
He added, "This will help families get through this crisis without being forced to make painful choices like selling their homes or not sending their kids to college."
Peter Morici, a professor at the University of Maryland School of Business, told CBS News that Obama's tax credit for companies is a "palliative" because new jobs that would be created during the next two years could disappear once the tax credit disappears. However, Morici applauded the penalty-free withdrawals from IRA's and 401k.
"This would help families in distress," Morici said. "The catch is that many families could have regrets. If the savings are in stocks, they may wish they had held on. In any case, I like the idea. It is better to give people choices."
Obama also called for a 90-day foreclosure moratorium, but homeowners would be required to make "good faith" payments. Morici points out that banks are already weak, and this could put a bigger burden on them.
The last part of the plan is for the Fed and the Treasury to provide loans to state and city governments in order to alleviate strains from the current credit crisis.
Obama is calling for his plan to be implemented as soon as possible and has proposed having a lame duck session of Congress in order to pass the plan. Senior adviser Jason Furman also noted that parts of the plan could be implemented with legislation that has already been passed.