Home Ownership & the American Dream, Obama’s Plan to Save ThemA detailed look at the plans Barack Obama has for this country, and how they will make a difference, from wall street, to main street, to your street. Having recently toured the oval office that he will soon occupy, President Elect Barack Obama must now take on the issues which challenge this country and the world. As such, it is time for us to wipe off the proverbial mud and take a clear look at what we can expect for the next four years. Most notably, how will this presidency affect our greatest concerns: consumer purchasing power, the housing market, the distribution of wealth and their overwhelming effect on how we as a nation, live.
Obama’s plan is geared toward impacting the toughest hit sectors, namely housing and finance, in two distinct ways. The first, and for many the most important, is intended to increase the purchasing power of low-income families and seniors. The second would be re-regulating the over-run predatory lending processes which created the very problems we face, and put those same income groups in danger.
To achieve his first goal, Obama has set his sights on increasing the after-tax incomes of lower and middle income Americans (which includes most seniors) through initiatives up to and including “fully refundable tax credits.” These will include a universal mortgage tax credit which would allow homeowners with incomes too low to pay taxes to still receive a mortgage deduction. Furthermore, the plan offers a $500 per person, $1000 per family tax credit to offset Social Security payroll taxes on the first $8100 of income earned. This is a philosophically unique concept, as it abandons the traditional view that Social Security is “insurance” and not “welfare”.
Seniors, and those headed towards retirement will benefit from the elimination of income tax on those among them making less than $50,000 a year. This would provide an average savings of $1400 per year to over 7 million seniors, many of which currently live on limited or fixed incomes. Additionally, the plan will make retirees more prepared for their “golden years” through the expansion of retirement funds. This will be achieved for families earning less than $75,000, by offering 50% match on the first $1000 deposited each year in workplace IRA accounts. Furthermore, it would require the creation of “Automatic workplace pensions” that could only be avoided by the employee explicitly opting out of the program.
To accomplish the second goal of his agenda, Obama is taking aim at lending principles and procedures to ensure future financial protection of the citizenry. The key aspects of this protection plan include the call for disclosure in all areas of finance, changes to bankruptcy laws, as well as new regulations on providers of credit cards and payday loans. This will reduce the confusion regarding programs being purchased and make it easier to identify instances of financial predation.
To ensure more accountability in the mortgage industry, Obama has called for new regulations to clarify proceedings on both sides of the lender’s desk. The first is the Stop Fraud Act which is intended to strengthen federal efforts to curb mortgage fraud. The second is the Accurate Disclosure Law, featuring HOME (Homeowner Obligation Made Explicit) which clearly identifies homeowner fiscal responsibilities. As well, he will force “lenders who acted irresponsibly and committed fraud” to partially finance a fund to avoid future foreclosures.
Looking both to the problems at hand and those that got us here, Obama is also calling for several measures to safe-en the consumer driven economy. These include a “cap (on) outlandish interest rates on payday loans” along with the creation of both a credit card rating system and a “credit card bill of rights” to inform and protect consumers. Lastly, he will reform bankruptcy laws to protect families facing medical crisis and reform corporate bankruptcy laws to give workers more seniority as creditors. This will ensure that the average American is not financially killed by a medial illness, nor are they left in the cold if their employer goes under.
These are just a few of the ways President Elect Barack Obama is attempting to turn this country away from recession and toward a better tomorrow. His plans reflect his understanding that the great divide has expanded too far and the only way to strengthen America is to strengthen its core. While lofty, these goals and their accompanying regulations will do just that, by ensuring the ability of low income Americans to become middle income and so on. These will keep the conceptual “American Dream” alive through real results like homeownership, by providing the facilities to achieve it and the protection to keep it.