Obama’s Win & Your Money
President Barack Obama has won a second term in office. What will the next four years mean for our finances? From housing to student loans, health care and taxes, here’s what’s in store for American consumers.
Continuation of Bush-Era Tax Cuts
The President supports extending (again) the George W. Bush-era tax cuts – but only for individuals making no more than $200,000 a year or no more than $250,000 for couples. [Governor Romney proposed keeping the cuts for Americans of all incomes and drop taxes further]. In Obama’s second term, those in a higher income bracket may face a bigger income tax bill for savings and investment gains, as well as an elimination of the mortgage interest deduction.
The tax cuts were set to expire at the end of this year. President Obama already extended the tax provisions in 2010 as part of his massive tax and economic package.
Ongoing Aid – and Forgiveness – for Student Borrowers
With student loan debt surpassing $870 billion, financial aid was a hot-button issue for voters, especially younger Americans. President Obama has made this issue a top priority the past four years by raising funding for federal student aid programs (such as the Pell Grant), nationalizing the student loan market and creating a “Pay As You Go” repayment program for struggling borrowers. During his campaign, Obama proposed extending the American Opportunity Tax Credit, set to expire in January.
More Mortgage Malaise
Unlike in 2008, housing was not a major topic for debate, despite the fact that millions of Americans continue to be underwater and home prices have failed to strongly rebound across the country. While the President has spent the last four years creating various programs – HAMP, HARP and the more recent HARP 2.0 – to assist struggling home owners, critics argue it hasn’t been enough. This year, he made a number of new proposals, including providing unemployed borrowers with 12 months of mortgage forbearance and increasing incentives for underwater mortgage modifications. These proposals are slowly being implemented.
Continuation of ObamaCare
With the re-election of President Obama, his Affordable Care Act will aim to continue its course. While many provisions have been implemented, others are not expected to take effect until 2014 , including rules that force uninsured individuals to obtain coverage – or face a tax penalty. Additionally, companies with 50 or more employees must provide coverage for workers, and insurance plans must provide certain preventive care, such as mammograms and colonoscopies, at no out-of-pocket charge to consumers.
Photo courtesy: Neon Tommy’s photostream on flickr