Moving our economy forward

Over recent days and weeks, America has been shocked by a continued, unfolding crisis involving some of the biggest names in the U.S. financial sector: Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers, and now AIG. Americans are rightly concerned about our economy and the impact that this Wall Street-bred crisis will have on Main Streets across the country, especially with so many of us accepting the realities of close to $4-a-gallon gasoline, as well as higher prices on food and other items. What’s clear is that the next president must implement a plan that will guarantee Americans a far greater measure of financial security than what we currently have. That means creating more and better-paying jobs, keeping fuel prices down and increasing domestic energy production, protecting Americans’ valued investments, and, of course, keeping the tax burden as low as possible. Those are all goals that would be met by implementing John McCain’s proposed policies and initiatives, which I would like to summarize here, today.

Let’s start by talking about what’s on everyone’s minds right now: The outright mess created by some of Wall Street’s biggest players and the poor management and casino culture evident there. The end result of this recklessness has been the threatening of millions of Americans’ retirement investments, savings, and insurance policies, which in hindsight looks frustratingly predictable. Two years ago, John McCain was warning that we were in trouble in this area, specifically with regard to Fannie Mae and Freddie Mac. While his warnings then went unheeded, the need for reform is now clear, and that reform needs to comprise three elements:

  • First, transparency with regard to investments needs to be greatly increased. Derivatives and mortgage-backed securities are complicated financial instruments, and it is essential that going forward, no one is able to use them to hide bad investments that no prudent investor would make. Ensuring that risks cannot simply be kept “off the books” and “out of sight, out of mind” is critical.
  • Second, making sure that oversight means oversight — and that responsibility for conducting it is not spread between countless agencies that have failed, collectively, to do their jobs, while engaging in turf warfare. In pursuing reform, the emphasis needs to be on ensuring we have the best federal agencies to do the job right — not that we have a dozen of them doing it, and badly.
  • Third, instituting comprehensive regulations to protect Americans who trust financial institutions with the hard-earned money they plan to use in retirement, or to pay for their children or grandchildren’s college. In addition to ensuring constant access to the books and accounts of our banks and financial institutions, John McCain plans to reduce the amount of debt and risk banks can take on, and take steps to prevent the kind of wild speculation that has contributed to the current crisis.
  • These are sound, comprehensive, and pragmatic steps that need to be taken — though, of course, the future strength of our economy, job growth, and prosperity for American families depends on far more than implementing just these reforms.

    It’s also essential, if we aim to promote job growth and across-the-board prosperity, that we keep taxes low for working families and for small businesses, and keep spending in check so that we are not setting Americans up for tax increases in the future. Barack Obama’s economic proposals are problematic with regard to both of these points. On one hand, he wants to vastly increase federal spending by hundreds of billions over just one four-year term. On the other, he wants to raise taxes — and not just on the “very wealthy,” either, as he often claims. Small-business owners, many of whom bring in just over $250,000 and file under the personal income tax schedule, would be hit by Obama’s tax increases. Paying more in taxes will harm their ability to hire more workers, pay employees more, and offer them better benefits. With so many Americans hurting and concerned about the need for more and better jobs, hammering small businesses is exactly the wrong thing to do; yet it is exactly what Barack Obama implicitly pledges to do. By contrast, John McCain will cut their (and other Americans’) taxes, and keep spending in check while eliminating the most egregious wastes of taxpayer money — something Americans can all agree is a priority.

    Another issue of great urgency right now is making sure Americans have access to affordable and high-quality health care. John McCain knows the escalating costs of health insurance year-after-year, on top of the sting of expensive grocery and energy bills, have been a tremendous burden for families. That is why he wants to put patients first, giving them control of health care dollars that are portable from one job to the next. He will provide a $5,000 refundable health care tax credit – effectively, cash – for families so they can either choose their employer-sponsored plan or shop around for a new one. This also helps small businesses that are being squeezed by health care bills to create new jobs, instead of cutting benefits and employees from the payroll. Insurance companies will compete for each and every plan they sell, resulting in a greater array of affordable, better quality options. There is also no reason why families cannot have the ability to buy insurance across state lines. Barack Obama wants to insert a government bureaucracy in health care decisions, limit families’ choices, and will do nothing to address the stunning increases in health care costs Americans face.

    Energy also is a critical issue where America’s economic health is concerned, and John McCain also will take a comprehensive approach to overcoming our energy challenges. Critically, he has selected an energy expert — Alaska Gov. Sarah Palin — as his running mate and she is well-placed to help him implement and execute his “all-of-the-above” energy strategy, known as the Lexington Project. Pursuing this project will allow America to take steps to keep energy costs at bay and achieve energy independence. Three elements comprise this plan: allowing for more offshore oil exploration; pushing for the construction of more nuclear power plants and the development of clean, inexpensive nuclear power; and aggressively pursuing the development of more alternative, green energy (such as wind and solar) and more energy-efficient, green technology.

    Barack Obama, unfortunately, opposes virtually every component of this project. He even dismissed the value in offering a $300 million prize to the innovator who succeeds in developing a battery package that has the size, capacity, cost, and power to leapfrog commercially available plug-in hybrids and electric cars. That’s something that has real potential to help break our country’s dependence on oil and reduce the amount we spend on fuel, which together with reforming Wall Street, spurring job growth and promoting prosperity, are critical challenges to meet head on, and without delay. That’s something that John McCain understands, and is committed to — and that is why I believe he, together with Gov. Palin as his second-in-command, is best-placed to lead and move our economy forward.

    Nancy Pfotenhauer is a senior policy adviser on domestic issues for the John McCain presidential Campaign.

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