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Paul Kiesel
Paul Kiesel
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Obama Proposes 90-Day Moratorium on Foreclosures

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Senator Barack Obama called for immediate action to help relieve the struggling economy and to mitigate the housing crisis, by proposing a 90-day moratorium on home foreclosures at some banks and a two-year tax break fro businesses that create new jobs.

According to the Associated Press, "The presidential candidate also proposed allowing people to withdraw up to $10,000 from their retirement accounts without any penalty for the remainder of the year and 2009."

Obama’s proposals will approximately cost $60 billion over two years, however, they can be enacted quickly via government’s regulatory powers (which increased through the bailout bill) or legislation that Congress could pass in a special session after the election.

"I’m proposing a number of steps that we should take immediately to stabilize our financial system, provide relief to families and communities and help struggling homeowners," Obama told a crowd in Toledo, Ohio. "It’s a plan that begins with one word that’s on everyone’s mind, and it’s spelled J-O-B-S."

Obama said that banks participating in the federal bailout should temporarily postpone foreclosures for families making good-faith efforts to pay their mortgage.

"We need to give people the breathing room they need to get back on their feet," he said, adding that families living beyond their means share some of the responsibility.

Obama’s foreclosure proposal draws a stark contrast between Senator John McCain’s mortgage plan (which is to buy up $300 billion worth of "bad" mortgages, and take the lenders off the hook), as Obama makes it a point to keep the lenders accountable, but while also allowing breathing room for both borrowers and lenders to work out a deal.