SCENARIOS-Obama faces acute economic challenges

(Reuters)

After his triumph at the polls on Tuesday, U.S. president-elect Barack Obama will face a host of economic problems on a scale not seen since the 1930s.

Below are some of those challenges and sketches of Obama's policies toward them.

FINANCIAL CRISIS

The U.S. financial crisis is the worst of its kind since the Great Depression. Economists say the country is in a recession that may get worse by the time the next president takes office in January.

Obama advocates a second stimulus package to jump-start the economy. Valued at $175 billion, the plan would include funding for infrastructure and another round of rebate checks.

HEALTH CARE

Obama has proposed a national insurance program to allow individuals and small businesses to buy health care similar to that available to federal employees, supplemented in part by a tax on employers who do not provide coverage.

He supports electronic health records to improve efficiency and reduce errors.

ENERGY

U.S. dependence on foreign oil is seen as both a security and economic threat. Obama says he is open to offshore drilling and nuclear power but emphasizes boosting energy efficiency and massively increasing investment in renewable energy.

TAXES

Obama highlighted his tax proposals during the campaign, saying Republican rival John McCain's tax approach would benefit big corporations while his would deliver tax benefits to the broad middle class.

Obama wants to expand the Earned Income Tax Credit and Child and Dependent Care Tax Credit, create a refundable "Universal Mortgage Credit" of 10 percent of mortgage interest for home owners who do not itemize tax returns, and eliminate income tax for seniors making less than $50,000 a year.

He also intends to roll back some of the tax cuts for the wealthy enacted by President George W. Bush.

TRADE

Obama has promised to review the North American Free Trade Agreement and use trade pacts to advance good labor and environmental standards around the world. He has also promised to end tax breaks that encourage U.S. companies to shift jobs overseas.