Presidential hopefuls propose economic plans

WASHINGTON – Sens. Hillary Clinton, Barack Obama and John McCain have diagnosed the swooning U.S. economy and have come up with rival plans to revive it. If the downturn lasts as long as some economists predict, one of the three will get a chance to try to sell his or her proposal to Congress as president.\nOr if the economy hits bottom before Inauguration Day and then turns up, the victor may be handed a rare gift: the chance to begin a presidency presiding over the early stages of a rebound.\nTake your pick. Who knows where the economy will be in nine and a half months?\nAs economic clouds darkened last week, all three candidates delivered major speeches on the economy while the Bush administration prepared a plan to give the Federal Reserve new regulatory powers over the financial system.\nDemocrats Clinton and Obama outlined competing $30 billion stimulus packages to help homeowners facing foreclosure and other victims of the financial crisis. This would be on top of the $168 billion stimulus package of rebates and temporary tax cuts passed by Congress last month and signed by President Bush. Both Clinton and Obama also called for broader financial regulation.\nRepublican McCain advocated voluntary action by lenders, more transparency in the lending process and the convening of a national conference of accountants and mortgage lenders to review how real estate is valued. He opposed large, taxpayer-financed bailouts but backed cuts in corporate tax rates and making permanent expiring Bush tax cuts.\nThe two Democrats are calling for a more activist role for the U.S. government to protect individuals. McCain is echoing standard GOP dogma of protecting markets and opposing bailouts.\nAll three praised recent intervention by the Fed and the Treasury Department to calm the financial storm, including sharp Fed interest rate cuts and a $29 billion rescue plan for investment giant Bear Stearns.\nSince all three are members of the U.S. Senate, they can influence congressional action now. But political reality being what it is, their time for impact – \nat least for one of them – probably lies in the future, not \nthe present.\nAnd there already is a welter of antirecessionary proposals pending in Congress – including major bills by Sen. Christopher Dodd, D-Conn., and Rep. Barney Frank, D-Mass., to let the government step in and back up to $400 billion in troubled loans. Both Clinton and Obama have endorsed \nthis legislation.\nEconomic statistics last week painted a bleak picture, reflecting continuing housing, credit and financial woes.\nThe Commerce Department reported the gross domestic product increased at an anemic 0.6 percent annual rate from October through December, and that consumer spending slowed to a crawl last month, edging up just 0.1 percent for the poorest showing in 17 months.\nConsumers – whose spending traditionally accounts for about two-thirds of the overall economy – have been reeling under the credit crisis, job cuts and soaring energy costs. Many – if not most – economists say the country already is in \na recession.\n“It’s clear the economy is in a slowdown,” said Dennis Lockhart, president of the Federal Reserve Bank of Atlanta. He said the slowdown “has been sharper than I had expected” and that “the recovery in growth I had expected in the second half of this year may \nbe delayed.”\nPolls show an interesting disconnect, however.\nA recent survey by the Pew Research Center showed that only 11 percent of those questioned said the U.S. economy was in “good or excellent” shape. But when asked about their own finances, 47 percent said they were “good \nto excellent.”\nAn AP-Ipsos poll in February produced similar results – with only 14 percent saying their personal finances were in poor shape but 61 percent agreeing the U.S. was in \na recession.