ABC News' Teddy Davis Reports: Former House Speaker Newt Gingrich said Tuesday that President Bush's proposed bailout plan is a "dead loser on Election Day" and urged Sen. John McCain, R-Ariz., to come out against it, saying that the GOP nominee cannot be for it and maintain his claim to be a reformer.
"I don't know how he can vote for this and with a straight face go around and say that he's for real change and he's the reform candidate," Gingrich told ABC News.
Gingrich's comments were the latest sign that the presidential campaign could be upended by the Bush administration's $700 billion plan to buy up and hopefully resell troubled mortgage-backed securities.
If McCain were to come out against the bailout plan, Gingrich said that Republicans would rally to his side and it would become possible for the McCain-Palin ticket to style itself as "taking on the Bush-Obama establishment."
"Either McCain is going to go along" with Obama in supporting the plan, said Gingrich, "in which case the establishment will have the fix in . . . or you are going to see McCain decide, much in the way that he did in picking Palin, that, in fact, he is a genuine maverick, that he genuinely defends the taxpayers, and that this is a terrible bill."
"If the latter happens," Gingrich continued, "I think you will see the emergence overnight of a 'McCain Reform Wing of the Republican Party' and you'll see House and Senate members siding with McCain by overwhelming margins and then you'll be in a very different political environment. You'll have 'Bush-Obama ads' on the one side and 'taking on the Bush-Obama establishment' on the other side, and that will be, frankly, one of the more amazing elections."
Left unsaid by the former Speaker is the possibility that the bailout plan would simply die if McCain were to come out against it, which in turn, could deprive the McCain-Palin ticket of the opportunity to run against the "Bush-Obama establishment."
"If McCain doesn't come out for this, it's over," a top House Republican told ABC News' George Stephanopoulos on Tuesday.
Gingrich is against the bailout plan because he thinks it is "inconceivable" that the Treasury and Fed can manage Wall Street.
While coming out against the bailout plan, Gingrich forcefully rejected the contention that he favors doing nothing and laid out a conservative alternative.
Gingrich's four-point plan includes: (1) suspending immediately mark to market provisions (the accounting practice of valuing a financial position in an investment at its current market price) in the hopes of stopping the downward spiral in asset values and eventually replacing it with a three year rolling average; (2) repealing immediately Sarbanes-Oxley, the 2002 accounting law Gingrich described as "an enormous drag on small business"; (3) setting the capital gains tax rate at zero "matching the Chinese and Singapore" (to encourage private capital to flood into the market picking up properties without the taxpayers being at risk); and (4) passing an "extraordinarily powerful" energy bill ("to return $500 billion a year to the American economy that are currently going overseas").
Gingrich spoke with ABC News in Washington, D.C., after participating in a polling presentation sponsored by American Solutions, the group he established last year which works to identify issues that have a majority support among Republicans, Democrats, and independents.