Obama Bulks Up His Economic Agenda

[question everything]

OCTOBER 14, 2008

Obama Bulks Up His Economic Agenda
By JONATHAN WEISMAN and GREG HITT
The Wall St. Journal

WASHINGTON -- Sen. Barack Obama unveiled a series of new proposals to deal with the financial crisis, including a partial moratorium on mortgage foreclosures. The Illinois senator's increasingly confident campaign is also strengthening coordination with congressional Democrats on an economic agenda that could be ready before the next president takes office.

Obama aides and congressional leaders are discussing an economic package that Congress could handle in a special session after the Nov. 4 election. That package is likely to include an expansion of food stamps, an unemployment-benefit extension, aid to states for health-care costs and funding for roads and bridges. While House Speaker Nancy Pelosi has been considering a package totaling $150 billion, several economists urged her at a closed-door meeting Monday to consider a package approaching $300 billion, congressional aides said. Democrats are also discussing injecting federal dollars into the student-loan and auto-loan markets, and possibly allowing federal purchases of short-term debt from state and local governments facing difficulty meeting payroll.

(snip)

Mrs. Pelosi told reporters Monday that Democratic leaders "have been working closely with the Obama campaign" on a new economic plan that should be ready soon. Her chief of staff spoke last week to Sen. Obama's liaison with Capitol Hill and briefly to Sen. Obama, House aides said. Obama aides are also discussing the credit crisis with Senate Banking Committee staff. Obama aides acknowledged the coordination, but played down the significance, fearing such talk would make the senator appear overconfident three weeks before the election. Sen. John McCain, speaking at large rallies in Virginia and North Carolina, hit his rival on just that issue Monday, as he sought to regain his campaign's footing with a new stump speech. "Sen. Obama is measuring the drapes, and planning with Speaker Pelosi and Sen. Reid to raise taxes, increase spending," he said, referring to Majority Leader Harry Reid.

(snip)

During his primary battle with Sen. Hillary Clinton, Sen. Obama attacked her plan for a foreclosure moratorium, saying it would lead to skyrocketing interest rates for new home buyers. Obama aides say they were criticizing the parts of the Clinton plan that would also freeze interest rates. Sen. Obama also proposed allowing people to withdraw as much as $10,000 from their retirement accounts without a tax penalty for two years. That proposal would likely draw opposition from economists who have been encouraging Americans to save more.

(snip)

Congressional Democrats are divided on the wisdom of pressing a joint Democratic agenda in a lame-duck session. They would have to contend with a slim Senate majority and President George W. Bush's veto pen until next year. But many Democrats believe a strong showing up and down the ticket next month will soften Republican opposition. "The hope is, if we win the presidency and pick up a good number of House and Senate seats, they're going to smell the coffee," Sen. Charles Schumer (D., N.Y.), chairman of the Joint Economic Committee, said of the lame-duck planning.

http://online.wsj.com/article/SB122392884291329773.html (subscription)