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MICHELE NORRIS, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris, and we're going to begin this hour with Senator Barack Obama. While campaigning in Florida today, Obama released what he calls an emergency economic plan. In a moment, we'll talk with Obama about that plan. First, the basic points.

The plans calls for a windfall profits tax on oil companies over five years. That money would be redistributed to Americans in the form of a rebate: $500 for individuals and $1,000 for married couples.

Second, Senator Obama is proposing an additional $50 billion to create two separate funds. One is called a $25 billion state growth fund. The campaign says it would help state and local governments avoid property tax hikes and budget cuts in health education and housing assistance.

A separate $25 billion jobs and growth fund is meant to fuel investment in infrastructure: highways, bridges, school repairs.

Earlier today, I spoke with Senator Obama, and I asked him how he would pay for his plan.

Senator BARACK OBAMA (Democrat, Illinois; Presidential Candidate): You know, when it comes to a stimulus package, typically you are not looking at offsets, because what you're trying to do is to prevent the economy from going into a further tailspin, which will cut tax revenues. So hopefully just by stimulating the economy, the stimulus is paying for itself.

On the short term, this is $50 billion that is financed by the deficit, but what I've said is that we need a short-term stimulus, and then we need a long-term policy for fiscal restraint, and that means eliminating waste in government, it means rolling back the Bush tax cuts on the wealthiest Americans. It means beginning to wind down the War in Iraq, where we're spending $10 billion every single month. But when it comes to short-term stimulus, the key is just making sure that we avoid the economy going into a further tailspin.

NORRIS: But with the deficit as high as it is right now, is it responsible to propose something that's likely to increase deficit spending?

Sen. OBAMA: Well, Michele, understand that if we continue on the trends we're on right now, where unemployment keeps on going up - I'm in Florida, where they are in recession for the first time in 16 years - if you continue to see an economic slide, that is going to cost far more in terms of tax revenues because businesses aren't selling, taxes aren't being collected, and what we're going to end up with is a much worse situation when it comes to our deficit.

NORRIS: Now, you know because of the timing of our program many of our listeners are in their cars, and so I want to ask you about your proposal to force big oil companies to share their record-breaking windfall profits, and it's hard to find an economist who supports the idea of a windfall profits tax. Most argue that this would stifle investment in oil discovery and oil production precisely at the moment when the U.S. should be encouraging more.

Sen. OBAMA: You know, classic economic theory says you don't meddle in the markets. Look, I mean, and most economists buy into that approach. Exxon Mobil made $12 billion last quarter. They made $11 billion before that and $11 billion before that, and not all of this is going into research and development, and families need some relief.

Now, I am the first to admit that what we need is a comprehensive plan, and that's what I've been putting forward for the last 18 months, making sure that we're increasing fuel efficiency standards on cars drastically, investing in the retooling so that we can have plug-in hybrids. I have set a goal that we reduce our oil consumption by 30 percent over the next 20 years. So that's the long-term answer to rising gas prices.

But in the short term, the notion that oil companies that have been making record profits hand over fist can't give a little bit of that back to make sure that not just drivers but senior citizens on fixed income are going to have the ability to pay for heating this winter, which is going to be a huge potential problem, I don't think that's too much to ask.

NORRIS: Before I let you go, Senator, I just want to ask you about this sparring that's been going on back and forth between the two campaigns. Yesterday, the John McCain campaign accused you of playing the race card. This morning, one of your top strategists, David Axelrod, acknowledged that you were referring to race, among other things, when you talked about how you present a different image than the faces that we now see on our currency, on our $1 bills and on our $5 bills. I just want to be clear about what you were trying to say in that comment. How has the GOP or the McCain campaign been using scare tactics, particularly when it comes to race?

Sen. OBAMA: Look, Michele, this notion that somehow I was playing the race card is ridiculous. What I said in front of a 98 percent conservative, rural, white audience in Missouri is not - is nothing that I haven't said before, which is I don't come out of central casting when it comes to what presidential candidates typically look like, and it doesn't just have to do with race. It has to do with my name. It has to do with my biography and my background. It has to do with our message of change.

And so in no ways do I think that the McCain campaign has, you know, targeted race issues, although I will say that the way they've amplified this, you know, has been troublesome, and the eagerness with which they've done it indicates they think, you know, they can exploit this politically. But in fact, what I have said, and there's no doubt about this, they've said it themselves, is that they want to make me appear risky to the American people, and that - I don't think that there's any doubt that, you know, people are still trying to figure out, you know, what's this young guy doing here running for president, and our job is to make sure that they understand that the changes we're promoting are changes that have to be made, that if we don't make them, in fact that's the riskier course.

NORRIS: You know, I think I heard you say that you think that they might be trying to exploit this because of the speed with which they reacted to your statements, because race is such a tricky thing. You yourself acknowledged that in your speech in Philadelphia. To the extent that they do try to exploit this, how do you inoculate that? How do you, as a candidate in a historical position, given that some Americans may feel some discomfort about crossing that historical threshold, how do you deal with that?

Sen. OBAMA: You know, I have great confidence in the American people. I mean, if you look at the campaign that John McCain's run over the last month, it's been Paris Hilton, Britney Spears, this latest episode, just recently the false accusation that I refused to visit troops because the cameras weren't with me, suggesting that I would rather lose a war so I could win a political campaign. I mean, you know, there have been a sort of just a sustained caricature, caricature of me and character attacks against me.

You know, that, I think, is an indication that they don't have many good ideas in terms of actually solving problems for the American people, and my goal is to keep talking about the issues that matter.

NORRIS: That was Senator Barack Obama. I spoke with him after a campaign stop in St. Petersburg, Florida, and we've been talking with the campaign of Senator John McCain as well, to arrange an interview with that candidate. We hope to be able to bring you that soon.

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