McCain, Obama question $700B financial bailout

Associated Press | 9/24/2008, 5:57 a.m.

WASHINGTON — Democrat Barack Obama and Republican John McCain raised doubts about the Bush administration’s $700 billion bailout and demanded conditions that could snag its quick passage through the highly partisan Congress.

Less than six weeks remain in the presidential contest as the candidates prepare for their first debate on Friday, a confrontation on foreign policy and national security. Those issues, despite ongoing wars in Iraq and Afghanistan, have slid to a distant second place behind voter anxiety over the U.S. economy, which is in the midst of a financial crisis not seen since the Great Depression of the 1930s.

McCain, who only a week ago said the economy was fundamentally sound, now says the U.S. financial system is facing a major crisis. But he cautioned against given too much power to Treasury Secretary Henry Paulson.

“Never before in the history of our nation has so much power and money been concentrated in the hands of one person. This arrangement makes me deeply uncomfortable,” McCain told an Irish American group in Pennsylvania, a key battleground state. “We will not solve a problem caused by poor oversight with a plan that has no oversight.”

McCain praised Paulson and said he had spoken to him several times last weekend. But the Republican candidate nonetheless called for a bipartisan oversight board for the proposed bailout, to be headed by Warren Buffet or another broadly respected business leader.

McCain also called on Congress to move quickly and work with the administration to restore stability to the troubled financial sector. But he said the goal of any action must be to allow homeowners to stay in their homes and prevent Wall Street executives from profiting from a taxpayer bailout.

Speaking on NBC television on Monday, McCain said, “We are in the most serious crisis since World War II.”

He also said that despite the ballooning national debt, he would not raise taxes if elected president.

Obama and his wife, Michelle, were campaigning in Wisconsin, a battleground state, while McCain planned stops in Pennsylvania, where the race was equally close. He was to be joined there by running mate Sarah Palin, the Alaska governor who has brought new life to the Republican ticket.

The candidates traded charges on Sunday, each declaring the other unprepared to handle the U.S. financial meltdown that looms over the next American president. They likewise said there were too few assurances of oversight and guarantees that Paulson’s unprecedented bailout would assist beleaguered citizens.

McCain cautioned against granting unchecked authority to Paulson, saying he is “greatly concerned that the plan gives a single individual the unprecedented power to spend $1 trillion on the basis of not much more than ‘Trust me.”’

In a statement to reporters, McCain urged the creation of a bipartisan oversight board to review the government bailout rather than entrusting Paulson with complete power to craft it. He said the board should be headed by a trusted financial steward like billionaire financier Warren Buffett, and said former Massachusetts Gov. Mitt Romney and New York City Mayor Michael Bloomberg should be involved as well. Both Romney and Bloomberg made enormous fortunes in business ventures before entering politics.