Challenge: America's Families Are Struggling

American families are feeling the impact of the economic downturn: seniors have watched their life savings dwindle and hard working families are being forced to cash in their savings at a loss to pay their bills.

John McCain's Solution

John McCain believes our response to the current financial crisis should focus on homes and savings:

Elements of the Pension and Family Security Plan:

• Lower taxes on seniors tapping their retirement accounts
  
• Suspend tax rules that force seniors to sell their stocks in the midst of this financial crisis
  
• Accelerate the tax write-off for those forced to sell at a loss in the current market
  
• Reduce capital gains taxes for 2009 and 2010 to raise the incentive to save and invest
  
• Refinance troubled mortgages and replace them with manageable, fixed-rate mortgages
  
• Eliminate taxes on unemployment benefits
  

And directly from the McCain site:

Pension and Family Security Plan  

Today, John McCain Will Outline His Pension And Family Security Plan To Address The Ongoing Economic Crisis. The Pension and Family Security Plan will help those who are currently hurting the most including workers, homeowners and seniors.

• The Pension And Family Security Plan Builds On The American Homeownership Resurgence Plan John McCain Outlined Last Week. The American Homeownership Resurgence Plan uses $300 billion of the $700 billion package recently passed by Congress to keep Americans in their homes, stop declining housing values and stabilize financial markets. Learn more about the Plan here.
  
• As He Works To Address The Financial Crisis, John McCain Will Implement His "Jobs For America" Economic Plan To Strengthen And Expand Our Economy. Learn more about the Plan here.

Elements Of The Pension And Family Security Plan:

• SENIORS: Lower Taxes On Seniors Tapping Their Retirement Accounts.
  
• SENIORS: Suspend Tax Rules That Force Seniors To Sell Their Stocks In The Midst Of This Financial Crisis.
  
• SAVERS: Accelerate The Tax Write-Off For Those Forced To Sell At A Loss In The Current Market.
  
• SAVERS: Reduce Capital Gains Taxes For 2009 And 2010 To Raise The Incentive To Save And Invest.
  
• HOMEOWNERS: Purchase Mortgages Directly From Homeowners And Mortgage Servicers, And Replace Them With Manageable, Fixed-Rate Mortgages.
  
• WORKERS: Eliminate Taxes On Unemployment Benefits.
  

Strengthening Retirement:

John McCain Believes Our Response To The Financial Crisis Should Focus On The Homes And Savings Of Americans. Seniors have seen the financial markets undertake a daily assault on their life savings in recent weeks. Families are being forced to sell at a loss to meet their bills. Public employees, unions, and every other pension fund in America will benefit from a stronger market. The government should take steps to meet these needs.

John McCain Proposes That Withdrawals From Tax-Preferred Accounts - IRAs And 401(k)s - Should Be Taxed At The Lowest Rate - 10 Percent - In 2008 And 2009. This policy will apply to the first $50,000 withdrawn from these accounts each year and will affect the accounts of nearly nine million Americans over the age of 60, permitting them to devote more of their income to retirement needs.

John McCain Has Called To Suspend The Tax Rules That Force Seniors To Sell Their Stocks In The Midst Of The Most Grave Financial Crisis Of Our Lifetime. Under current law, Americans with tax-preferred IRA and 401(k) accounts must begin to sell off their equities when they reach age 70? - unless they continue to work, in which case they must sell when they retire. Forcing seniors to sell at this time guarantees less to live on during retirement and could affect over four million seniors. John McCain believes this should be immediately waived.

Strengthening Savings:

John McCain Will Not Penalize Those Forced To Sell Off In Today's Tough Markets. John McCain believes that we should increase the amount of capital losses which can be used in tax years 2008 and 2009 to offset ordinary income from $3,000 to $15,000.

John McCain Will Strengthen Incentives To Save, Invest, And Restore The Liquidity Of Markets. John McCain proposes a reduction in the maximum tax rate on long term capital gains to 7.5 percent in 2009 and 2010.

Strengthening Homeownership And Stabilizing Financial Markets:

John McCain Has Proposed An American Homeownership Resurgence Plan To Address The Financial Crisis Head-On And Ensure Deserving Homeowners Are Protected First And Foremost.

John McCain Will Attack The Roots Of Our Financial Crisis By Purchasing Mortgages Directly. John McCain will direct his Treasury Secretary to implement an American Homeownership Resurgence Plan (McCain Resurgence Plan) to keep families in their homes, avoid foreclosures, save failing neighborhoods, stabilize the housing market and attack the roots of our financial crisis.

• America's Families Are Bearing A Heavy Burden From Falling Housing Prices, Mortgage Delinquencies, Foreclosures, And A Weak Economy. It is important that those families who have worked hard enough to finance homeownership not have that dream crushed under the weight of the wrong mortgage. The existing debts are too large compared to the value of housing. For those that cannot make payments, mortgages must be re-structured to put losses on the books and put homeowners in manageable mortgages.
  
• There Are 3.1 Million Homeowners In America Who Are Delinquent Or In Default On Their First Mortgage. There Are 11.8 Million Underwater First Mortgages In The United States. An underwater mortgage occurs when a homeowner owes more money than the market value of a home.
  

The McCain Resurgence Plan Would Purchase Mortgages Directly From Homeowners And Mortgage Servicers, And Replace These Mortgages With Manageable, Fixed-Rate Mortgages That Will Keep Families In Their Homes. By purchasing the existing, failing mortgages the McCain resurgence plan will eliminate uncertainty over defaults, support the value of mortgage-backed derivatives and alleviate risks that are freezing financial markets.

The McCain Resurgence Plan Would Be Available To Mortgage Holders Who Live In Their Primary Residence And Can Prove Their Creditworthiness At The Time Of The Original Loan. The new mortgage would be an FHA-guaranteed fixed-rate mortgage at terms manageable for the homeowner.

How The Program Works:

• An American buys a house that is his or her primary residence for $250,000 with a conservative, 20 percent downpayment ($50,000 down).
  
• His or her community property values fall by 30 percent, leaving him or her with a home worth $175,000 and a mortgage still worth $200,000.
  
• Under the McCain Plan, their mortgage would be retired, and they would receive a new, FHA guaranteed, 30-year fixed mortgage, at a low interest rate that reflects historical norms and the current market value of his home.
  

The Direct Cost Of This Plan Would Be About $300 Billion And Will Represent A Portion Of The $700 Billion Provided By Congress In The Recent Financial Market Stabilization Bill. The purchase of mortgages would relieve homeowners of "negative equity" in some homes. By stabilizing mortgages it will likely be possible to avoid some purposes previously assumed needed in that bill.

Providing Tax Relief To The Unemployed

John McCain Will Provide A Tax Cut For Americans Who Have Lost A Job By Exempting Unemployment Benefits From Taxation. According to the latest statistics, over 3.6 million Americans are currently receiving unemployment benefits. John McCain recognizes that at a time when families are hurting, and the prospects of future job losses increase -- we should stop taxing unemployment insurance benefits for 2008 and 2009.

• Taxes Average Nearly 10 Percent Of Unemployment Benefits For Those Making Less Than $100,000. John McCain will eliminate this burden -- immediately increasing received benefits by nearly 10 percent on average.
  
• John McCain's Plan Is Targeted To Help Those Most In Need -- Those Who Were Making Less Than $100,000. This provides targeted relief, at the lowest cost to the taxpayer.