How Sarah Palin, Joe Biden Would Guard Your Wallet

Vice presidential candidates spend most of their time cheerleading for their boss—and attacking his opponent. But with intense interest in the upcoming debate between Democrat Joe Biden and Republican Sarah Palin, the two No. 2's have been staking out their own turf on the financial bailout, the housing crisis, and other economic matters. Here's where they stand on issues that matter most to consumers:

THE WALL STREET BAILOUT

The bailout bill, with its huge price tag, is deeply unpopular among voters, and while both campaigns tepidly support it, the candidates have all bashed Wall Street fat cats, greedy banks, and failed companies like the mortgage giants Fannie Mae and Freddie Mac.

Palin: After the government pledged up to $200 billion to prop up Fannie and Freddie, she told CBS anchor Katie Couric, "We had to step in there. I do not like the idea, though, of taxpayers being used to bail out these corporations."

Biden: After the government lent AIG $85 billion to help it avert bankruptcy, Biden said on CNBC that "you can't have a policy to bail out every failing financial institution in the United States of America.... We have to change the policy here to have more transparency and more common-sense regulatory oversight."

Bottom line: The bailout is a losing political issue, and both campaigns have steered clear of specific remedies—especially since nobody knows how bad it's going to get, or how much the government will have to spend. Still, reforming the financial regulatory system will be one of the most pressing issues for the next administration.

JOBS

The unemployment rate has crept up to 6.1 percent, and with the economy weakening it could be higher by election day—putting pressure on the candidates to explain how they'll create jobs, quickly.

Palin: The Alaska governor likes to point out that many members of her family run small businesses. "It's small businesses that create the jobs in this great country," she said in a recent speech. Cutting taxes is one way she'd try to spur job growth.

Biden: The Delaware senator has highlighted Obama's plan to invest $150 billion in a "clean-energy economy" and $60 billion in new infrastructure projects, which, the Democrats say, will create up to 7 million new jobs.

Bottom line: It's very difficult to add jobs in a weak economy, no matter how you try. Corporations and small business might use tax to cuts pay down debts or invest in new technology—possibly from overseas—instead of hiring American workers. Infrastructure spending takes years to get underway. And Obama acknowledged in the first presidential debate that some of his biggest spending plans might have to be pared back, given massive new outlays for a bailout bill.

THE HOUSING BUST

After rising to record levels, house prices have fallen by about 18 percent across the nation, causing a spike in mortgage delinquencies and foreclosures that's sending shock waves throughout the economy. Most experts think housing prices still need to fall farther before they bottom out.

Palin: When asked about distressed homeowners behind on their mortgages, she told Couric that "some decisions that have been made poorly should not be rewarded." As for the government stepping in to limit or prevent bank foreclosures, she said, "That's something that John McCain and I have both been discussing." But so far neither has taken a stand.

Biden: He'd be more aggressive about trying to save endangered homeowners. "One of the things we've got to be doing is figuring out how, for example, to allow people to stay in their houses," he said on CNBC. "Change the bankruptcy laws. Allow a bankruptcy judge to say to the lender, look, we're going to reduce the amount of money that's owed so that people can stay in their house."

Bottom line: There are already some new programs to help stressed homeowners, though it's not clear how effective they'll be. And despite popular appeal, there's weak support in Congress for laws that would force banks to forgive loans that homeowners can't repay. Voluntary programs are more likely, perhaps as a condition for participating in the financial bailout. And there's little the government can do to prop up home values—especially since inflated prices started the problem in the first place.

TAXES

Each campaign wants to reformulate the tax code. Obama wants to cut taxes on people earning less than $250,000, while raising taxes on the wealthy and imposing a "windfall" tax on oil companies. McCain favors some middle-class tax cuts, lower taxes for the wealthy, and a reduction in the corporate tax rate. Palin and Biden are in lockstep behind their bosses' ideas.

Palin likes to highlight several taxes she reduced or eliminated while governor of Alaska.

Biden counters that Palin's sister, who owns a gas station, "is going to be better off under a Democratic administration than a Republican administration, unless she makes more than $250,000."

Bottom line: Cutting taxes in Alaska—where oil revenues routinely produce a big surplus in the state's budget—is a lot easier than doing it for the country as a whole. Economists differ on which tax plan would benefit the economy more, but the odds of tax cuts for anybody will diminish as the costs of a financial bailout skyrocket.

ENERGY

With gas back below $4 per gallon, pump prices have become less of an election issue. But prices are still about 30 percent higher than a year ago, and many consumers are concerned about winter heating bills and America's dependence on foreign oil.

Palin argues that governing Alaska, the source of much of America's oil, has made her an expert on energy—which would be one of her areas of responsibility as vice president. To bring prices down, she aggressively supports more offshore drilling in U.S. coastal waters, including the Alaska National Wildlife Refuge (which McCain himself opposes).

Biden has had relatively little to say on energy, beyond the highlights of the Obama plan: Invest $150 billion in renewable energy, give Americans a $1,000 energy rebate funded by a new tax on oil companies, and promote hybrid automobiles.

Bottom line: New alternative energy programs could be one casualty of huge government expenditures elsewhere. More offshore drilling seems likely—since Obama, too, now supports that—but the candidates generally agree that such measures won't add more oil, or lower gas prices, for 10 years or more.