Difficult Questions for Barack Obama

With few exceptions, these questions are based on Obama's stated positions as found at BarackObama.com.

1. You plan to offer a credit to small businesses for 50% of their employees’ healthcare premiums.  This provides a benefit to profitable small businesses, but not for startups without revenue or profits.  How will this provide an incentive to them to provide healthcare? 

2. You want to make the R&D tax credit permanent.  There are currently firms around the country going to small businesses and offering to help them capture R&D tax credits for previous years by auditing all of their expenses and then refilling tax returns for those years.  These firms take a percentage of all credits claimed (sometimes 33%).  Obviously, the companies getting these retroactive credits were not incentivized by the credit.  Do you know specifically which types of firms are taking advantage of the R&D tax credit right now?  How would their behavior change if you eliminate this credit?  Would you allow R&D tax credits to apply to previous years’ amended returns?

3. You propose making a “HOME” score, which is a way to show mortgage borrowers the true cost of their loan.  This would include calculating mandatory taxes and insurance.  What will be the cost to develop this new system?  Will taxpayers pay directly for the cost of developing it through government expenses or will the cost be passed on to consumers by mortgage companies when consumers take out a new mortgage?  How much added cost do you predict this will add to the typical mortgage?

4. You want to create a fund to help “innocent” mortgage borrowers facing foreclosure.  Your plan states “Barack Obama will establish policies to help Americans currently facing foreclosure through no fault of their own. For instance, in communities where there are many foreclosures property values of innocent homeowners are often also negatively impacted, driving them toward foreclosure, too.”  Please describe how the change in values of homes in someone’s area will affect other mortgage borrower’s existing mortgage.  The terms of these mortgages are fixed and are not affected by changing real estate prices, unless the borrower planned to exit his mortgage early, correct?

5. You want to allow bankruptcy courts to alter the terms of a bankrupt person’s mortgage.  Presumably this would offer them a lower interest rate or delayed payments, which will mean mortgage companies will have to account for this added cost in new mortgages.  Won’t this make it more expensive for fiscally responsible people to own a home?

6. You propose a number of tax credits for low and middle income earners, and these credits phase out for higher income earners.  You also want to raise taxes on the wealthy.  Assume I’m a manager at a company and have worked for 20 years to get to where I am today.  Your tax hikes and phase outs will cost me an additional $10,000 per year.  Why should I vote for you if my out of pocket cost will be an additional $40,000 during your first term?

7. Social security taxes are 12.4% of an American’s income until they reach the wage limit.  Many people under the age of 30 don’t believe they will ever receive benefits from social security because it will be bankrupt or otherwise dismantled by the time we retire.  There are really two ways to fix this: higher taxes or lower benefits.  The one concrete proposal you have is to collect social security taxes on earnings over $200,000 ($250,000 for families) a year starting at least 10 years from now (when you are no longer in office).  This sounds to me like you are pushing the buck to the next president.  What specifically will you do during your term to shore up social security and ensure the young generation that the 12.4% isn’t merely a tax, but something they will reap benefits from when they retire?

8. You want to create a “5 star system” for rating credit cards to “to provide consumers an easily identifiable ranking of credit cards.”  The FTC will be responsible for creating this system.  How much will American taxpayers have to pay pay to create and enforce this new system?  Also, will it incentivize credit card companies to focus only on the “scored” aspects of their credit cards instead of other features such as extended warranties on purchases and points?

9. You plan to require 25% of American electricity to come from renewable sources by 2025.  Since renewable energy currently costs more than non-renewable energy, how much will Americans have to pay for this requirement?

10. You want to enact a windfall profits tax on oil companies.  Exxon Mobil’s profit margin is about 10%.  Google’s profit margin is 25%.  Should we charge a windfall tax to Google for the “extraordinary” profits they are generating due to growth in online advertising?  Furthermore, since many companies’ and states’ pension plans are invested in oil companies, won’t this hurt the value of citizens’ pensions?  Also, how will this windfall tax encourage or discourage oil companies to take risks on additional technologies and oil field exploration?

11. How much of oil companies’ profits do you believe are from the increased marketplace price of fuel as opposed to other sources of revenue?

12. You pledge to “fight to ensure that public contracts are awarded to companies that are committed to American workers.”  If a company offers to provide a service to the government for $5 million using U.S. citizens and a competitor offers to do it for $100,000 using foreign labor, how does the taxpayer come out ahead?

13. You believe workers should have the freedom to choose whether to join a union without harassment or intimidation from their employers.  What will you do to ensure that employees are not harassed or intimidated by unions to join, especially if there are "open ballots" for unionizing?

14. You want to cap interest charges on so-called payday loans, which are extremely risky for the lender.  Millions of Americans count on these loans.  You want to encourage banks and credit unions to make these loans that payday loan companies currently offer.  How does the math work?  How will credit unions and banks that currently do not offer these loans find it profitable to do so at lower interest rates than are currently available on the market?

15. You want to create what appears to be “merit pay” for teachers “designed with the help and agreement of teachers’ organizations”.  Given teachers’ unions opposition to most types of merit pay and accountability in the past, how do you expect them to work with you on this issue?

16. You want to swap “light” oil out of the Strategic Petroleum Reserve in order to cut gas prices.  How much would doing this cut gas prices, and for how long would this price cut last? 

17. You want to create a $7,000 tax credit for buying advanced vehicles.  Who will pay for this credit?

18.  You want nearly all government contracts over $25,000 to be put out for competitive bid.  Responding to government requests for proposal costs companies money, and the government will incur costs managing the competitive bidding process on these contracts.  For a $25,000 contract, it is entirely plausible that this process will make up 20% of the contract value.  Why did you decide on $25,000?  What do you think the real cost of this added burden will be?

19. You pledged to accept government financing for your presidential campaign if McCain were your opponent.  You reneged on this pledge and said it was because campaign finance in this country is broken.  Are you sure you didn’t renege because your campaign has been able to collect more donations than your opponent? 

20. You want to require employers to provide 7 paid sick days each year.  Who will pay for this added cost?  Can't employers just reduce how much they pay to their employees to compensate for this?  Will customers pay for this paid time through increased costs?

21. You want to cut subsidies for oil and gas companies “that are enjoying record profits, as well as the elimination of subsidies to the private student loan industry which has repeatedly used unethical business practices.”  Yet you want to continue offering subsidies to farmers.  This seems contradictory to your oil and gas subsidies plan and also hurts farmers in poor countries.  You also want to force food to have a “country of origin” stamp, further hurting farmers in poor countries.  Do you care about the fate of foreign farmers and agriculture workers?  Do you believe in the idea of “fair trade” products?

22. Continuing on the previous question, you say you want foreign governments to stop subsidizing products, which unfairly hurts American companies and their workers.  But you want the U.S. to continue to subsidize the cost of food.  Explain how this is not hypocritical.

23. You want to offer a universal health plan that has guaranteed eligibility.  Because of this, the plan will attract people that in general are sicker and more expensive to insure than those on commercial plans.  Who will pay for this?  Will this require healthy Americans to pay for others through increased taxes?

24. Your health care plan blames drug companies and health insurance companies for rising healthcare prices.  Are consumers part of the problem, too?  For example, when is the last time that someone with a standard health plan comparison shopped for prescriptions?  What will you do to expand Health Care Savings Accounts that push accountability to consumers?

25. You want to raise the minimum wage to $9.50 by 2011.  What will you do to help small businesses offset this increased cost to their business?

26. You want to change the U.S. Department of Agriculture’s crop insurance rates so they don’t penalize organic farmers.   This will increase insurance losses, which will raise the cost of insurance overall and have to be paid for by price increases or by the government.  At the end of the day, won’t American citizens pay for this?

27.  With your plan to deploy next generation broadband across the U.S., including to rural areas, you cite part of the problem as the FCC’s definition of broadband as an “astonishingly low” 200kbps.  You say you “will define “broadband” for purposes of national policy at speeds demanded by 21st century business and communications.”  What exactly is this speed?