White House ’08: Obama, McCain and the bailout
Story by Chris Graham
Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson are urging swift action on the Bush administration’s proposed $700 billion Wall Street bailout. Democrats and Republicans on Capitol Hill are balking, and as the pressure is mounting on Congress to act, it is raising to a fever pitch on the presidential campaign trail.
“We need to put our country first and focus what’s best for Main Street. It’s the excess and greed of Washington and Wall Street that got us in this situation to start with,” said Republican nominee John McCain, who is trying mightily to position himself as a populist Wall Street regulator on a record of a quarter century of advocacy as a staunch opponent of government regulations on the financial-services sector.
McCain is also efforting to position himself as a man of action in the current financial crisis and to position Barack Obama as being indecisive even as their cohorts in the Senate and in the House of Representatives are telling Bernanke and Paulson and the president that they themselves want to know more about what is being proposed in terms of this historic federal-government bailout than it seems even its designers seem to be able to relate.
“It will not help struggling homeowners pay their mortgages. It will not bring a halt to the slide in home prices,” said Sen. Jim Bunning, a conservative Republican from Kentucky, echoing the thoughts of many of his colleagues on both sides of the aisle. “This massive bailout is not a solution. It’s financial socialism, and it’s un-American,” Bunning said.
McCain, for his part, seems to be hitching his wagon to the bailout much as he did when he decided to make the continuation of status-quo policies in Iraq his thing to do early last year. In a TV ad reportedly put on the air beginning today, McCain attacks Obama “and his liberal allies” for being “mum on the financial crisis.” Obama, on his side, is staying the course that he has been following since the Bush administration announced its controversial bailout plan, saying today in Tampa that “it is wholly unreasonable to expect that American taxpayers would or should hand this administration or any administration a $700 billion blank check with absolutely no oversight or conditions when a lack of oversight in Washington and on Wall Street is exactly what got us into this mess.”
Obama said the bailout should include protections to ensure that taxpayer dollars are not used to “further the bad behavior of irresponsible CEOs on Wall Street,” and that the pronouncements from Paulson that he should be given the power of primary oversight as regards the implementation of the bailout are off-base. “I have great respect for Secretary Paulson, but he cannot act alone. We should set up an independent board that includes some of the most respected figures in our country, chosen by Democrats and Republicans, to provide oversight and accountability at every step of the way,” Obama said.
“Regardless of how we structure the plan, if the government makes any kind of profit on this deal, we must give every penny back to the taxpayers who put up the money in the first place. And after the economy recovers, we should institute a Financial Stability Fee on the entire financial services industry to repay any losses to the American people and make sure we are never asked to foot the bill for Wall Street’s mistakes again. We can ask taxpayers to make an investment in the stability of our economy, but we cannot ask them to hand their money over to Wall Street without some expectation of return,” Obama said.