Home News Obama, McCain cautiously embrace USD 700B bailout

Obama, McCain cautiously embrace USD 700B bailout

Published on 29/09/2008

29 September 2008

WASHINGTON — Both U.S. presidential candidates gave cautious support to a newly negotiated USD 700 billion bailout of the hobbled financial industry, while both campaigns also sought to take at least partial credit for many aspects of the bailout.

The multibillion dollar bailout has become a key issue in the race between Democrat Barack Obama and Republican John McCain. Both men indicated in Sunday morning television interviews that they would reluctantly support the Wall Street bailout deal, which is highly unpopular with voters, and Obama predicted quick passage of the measure, which comes up for a vote in the House on Monday.

“This is something that all of us will swallow hard and go forward with. The option of doing nothing is simply not an acceptable option,” McCain said. Obama said he was inclined to back it because he thinks the financial problems have gone beyond Wall Street to affecting everyday consumers.

The plan, proposed by President George W. Bush, would give the administration broad power to use billions of taxpayer dollars to purchase devalued mortgage-related assets held by cash-starved financial firms. The bailout, the largest in U.S. history, was designed to keep the worst financial crisis since the Great Depression of the 1930s from spreading throughout the entire economy.

With worry about the American economy overtaking other issues such as Iraq in the buildup to the Nov. 4 election, the candidates have each tried to portray themselves as best able to steer the country through its economic problems.

McCain, a longtime Arizona senator, has painted himself as a leader who will restore financial oversight to the economy while also slashing wasteful spending and cutting taxes on individuals and businesses, whereas Obama, McCain says, would usher in an era of big government spending programs and high taxes.

Obama, a first term senator from Illinois, has tried to link McCain with the unpopular Bush’s economic policies and argued McCain backs corporate tax breaks and lax regulation that have contributed to the Wall Street economic crisis.

Polls suggest the race now slightly tilts Obama’s way, with the gains McCain made following the Republican National Convention earlier this month starting to fade.  This occurs as the economy, an issue that does not play to McCain’s foreign policy strengths, emerging as a dominant issue.

The bailout plan almost threatened to derail the first presidential debate held last Friday when McCain suggested delaying the first debate with Obama until a deal was reached. McCain made a last-minute change of mind, showing up for the debate in Oxford, Mississippi.

Asked during a television interview Sunday, Obama said his Republican rival did not deserve any pats on the back for helping forge the tentative agreement on the Wall Street bailout announced early Sunday by lawmakers and the Bush administration.

“Here are the facts: For two weeks I was on the phone everyday with (Treasury) Secretary (Henry) Paulson and the congressional leaders making sure that the principles that have been ultimately adopted were incorporated in the bill,” Obama said.

At a rally in Detroit, Obama predicted quick passage of the measure and said it contained important consumer-friendly provisions he had supported.

He also said Washington had no choice but to act although he said it was an outrage that “we are now being forced to clean up their mess.”

Obama also criticized McCain, saying his economic philosophies are out of touch and dangerous for a teetering economy.

Speaking on morning television, McCain said the latest version of the bailout plan meets his insistence of an oversight body to monitor the treasury secretary and limits the compensation of executives of financial institutions applying for loans.

“Let’s get this deal done, signed by the president, and get moving, because the real effect of this is going to restore some confidence, and get some credit out there, and get the economic system moving again, which is basically in gridlock today,” McCain said.

McCain said Sunday that he rushed back to Washington because he was not going to “phone in” his advice.

Republicans generally have said McCain’s participation helped prod the agreement. Democrats countered that his presence had little effect on the outcome and may have even delayed a deal.

Like McCain, Obama spent parts of several days in Washington because of the bailout talks. But he has returned to the campaign trail and on Sunday he and running mate Delaware Senator Joe Biden attended a rally in Detroit, the home of the ailing U.S. auto industry.

Obama said in his television interview that he was inclined to support the Wall Street bailout because it includes increased oversight, relief for homeowners facing foreclosure and limits on executive compensation for chief executives of firms that receive government help.

“None of those were in the president’s provisions. They are identical to the things I called for the day that Secretary Paulson released his package,” Obama said. “That I think is an indication of the degree to which when it comes to protecting taxpayers, I was pushing very hard and involved in shaping those provisions.”

Many in Congress, including Democrats and Republicans, supported the safeguards.

More than five weeks remain in the campaign, and the calendar includes three more nationally televised debates, including one scheduled for Thursday between vice presidential running mates Sarah Palin, the Republican governor of Alaska, and Biden.

[AP / Expatica}