IN THE HEADLINES
Key details missing from Obama's plan for new Social Security tax on the wealthy ... McCain backs effort to ban affirmative action in Arizona; Obama calls the move disappointing ... Obama to meet with key economic advisers to discuss economic stimulus
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Details missing from Obama's Social Security plan
WASHINGTON (AP) — Barack Obama's bid to place a new Social Security tax on very high incomes is either a bold or foolhardy plan, depending on who critiques it.
But its potential impact is almost impossible to gauge because he is providing few details on basic questions such as what the tax rate might be, what types of income would be taxed and how the taxpayers' benefits would be affected.
The Democratic presidential candidate says he would work with lawmakers from both parties to resolve such matters. Voters generally applaud bipartisan cooperation, but they apparently will go to the polls this fall with only a vague notion of what Obama has in mind.
Obama made headlines June 13 when he called for a Social Security payroll tax on incomes above $250,000 a year. Currently, the tax is levied only on the first $102,000 of each worker's income. That covers the entire salary of most Americans.
Obama would not apply the Social Security tax to annual incomes between $102,000 and $250,000, a move meant to avoid alienating several million upper-income voters. His proposed change would apply only to those earning more than $250,000 a year, or about 3 percent of all taxpayers.
When he outlined his idea in the battleground state of Ohio, Obama said it is unfair for middle-class earners to pay the Social Security tax on every dime they make, while millionaires and billionaires pay it on only a very small percentage of their income. He also said the Social Security program needs revamping to bolster its long-term viability.
With Obama offering few details, several news accounts suggested that his proposed tax on very high incomes would be applied just as the existing Social Security tax is levied on incomes up to $102,000.
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McCain backs ban on affirmative action in Arizona
CHICAGO (AP) — Republican John McCain has endorsed a proposal to ban affirmative action programs in his home state, a policy that Democratic rival Barack Obama called a disappointing embrace of divisive tactics.
In the past, McCain has criticized such ballot initiatives.
In an interview that aired Sunday, McCain was asked whether he supported an effort to get a referendum on the ballot in Arizona that would do away with race and gender-based preferences, known as affirmative action.
Yes, I do, said McCain on ABC's This Week. The Arizona senator quickly added that he had not seen the details of the proposal. But I've always opposed quotas.
His reversal comes as McCain seeks to tailor his policies and rhetoric to independent-minded voters who will determine the outcome of November election. Both McCain and Obama have accused each other of flip-flopping, a charge that carries weight with voters seeking consistency and authenticity in their political leaders.
Speaking to a conference of minority journalists, Obama said he was disappointed by McCain's position.
I think in the past he had been opposed to these kinds of Ward Connerly referenda or initiatives as divisive. And I think he's right, Obama said, referring to a leading critic of affirmative action.
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Obama shifts focus to economy
WASHINGTON (AP) — Democrat Barack Obama is shifting his focus from foreign policy to the economy at home.
Obama said in an interview broadcast Sunday that cost of gasoline and food will keep Americans focused on finances even during the upcoming Olympics in Beijing. The Illinois Democrat said on NBC's Meet the Press that he's gathering key economic advisers on Monday to discuss a second economic stimulus package and ways to deal with high energy prices.
Among the people he will talk to are investor Warren Buffett, Eric Schmidt, chairman and CEO of Google, as well as former Federal Reserve chairman Paul Volcker.
What is driving people all across the country right now is worries and concerns about inability to pay the gas bill and inability to buy food because prices have gone up so high, Obama said.
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THE DEMOCRATS
Barack Obama meets with economic advisers in Washington and later attends a fundraising event in Arlington, Va.
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THE REPUBLICANS
John McCain holds a luncheon in Bakersfield, Calif., and speaks about offshore oil drilling.
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QUOTE OF THE DAY:
I think that Wall Street is the villain in the things that happened in the subprime lending crisis and other areas where investigations and possible prosecution is going on. — John McCain.
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STAT OF THE DAY:
Republican John McCain in June collected $30,500 from employees of Zurich Financial Services and $10,350 from employees of Morgan Stanley. In the same month, Democrat Barack Obama got $40,600 from IBM employees and $33,000 from Microsoft employees.
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Compiled by Ann Sanner.
