SCENARIOS: Economic challenges facing the next president

(Reuters) - Whether Democrat Barack Obama or Republican John McCain wins the White House on Tuesday, the next U.S. president will face a host of acute economic problems on a scale not seen since the 1930s.

Below is a handful of some of those challenges and the different ways Obama, an Illinois senator, and McCain, an Arizona senator, would likely address them:

FINANCIAL CRISIS

The U.S. financial crisis is the worst 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.

McCain advocates a $300 billion housing plan that would use some of the funds from the recent $700 billion Wall Street bailout package to buy up troubled mortgages as the best way to bring the economy "out of the ditch."

HEALTH CARE

Both candidates identify bringing down high health-care costs and reforming the health insurance system as an economic priority.

McCain would end tax breaks for employer-provided health insurance and provide a refundable tax credit of $2,500 per person, or $5,000 for families. He would promote competition by allowing people to buy insurance across state lines.

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.

ENERGY

U.S. dependence on foreign oil is seen as both a security and economic threat.

McCain advocates an "all-of-the-above" approach to energy independence, including offshore drilling, building 45 nuclear plants and investing in renewable sources of energy like wind and solar.

Obama says he is open to offshore drilling and nuclear power, but emphasizes boosting energy efficiency and massively increasing investment in renewable energy.

TAXES

The two candidates have clashed over taxes at the close of the campaign, with McCain accusing Obama of wanting to spread people's wealth around and Obama saying McCain's policies would benefit big corporations rather than the middle class.

Among their various proposals:

McCain proposes doubling the personal tax exemption for dependents to $7,000, reducing the maximum corporate tax rate to 25 percent from 35 percent and allowing businesses a first-year deduction for purchases of equipment.

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 homeowners who do not itemize tax returns, and eliminate income tax for seniors making less than $50,000 a year.

(Compiled by Jeff Mason; Editing by Stacey Joyce)