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McCain: 'New Money' Might Fund $300 Billion Mortgage Plan
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ShareOctober 09, 2008 7:11 PM
ABC News' Teddy Davis, Hope Ditto and Arnab Datta Report: John McCain's $300 billion mortgage buy-up plan may require new funds, according to a Thursday interview the Arizona senator gave to ABC News' Charles Gibson.
Asked if his mortgage plan would be "new money or part of the $700 billion" already appropriated by Congress for the Wall Street bailout, McCain said, "part of the $700 billion, new money, if necessary."
"Look," he continued, "in one day they wiped out $1.2 trillion when it dropped 700 points. And I'm not throwing this money around lightly. But if the housing values continue to go down, there's no floor. There's no turnaround here. We all know what was the catalyst for this catastrophe. And that was Fannie and Freddie."
The Obama campaign reacted to the Gibson-McCain interview by charging that the Arizona senator's plan "just keeps getting worse."
"John McCain's risky bailout scheme just keeps getting worse," Obama-Biden spokesman Hari Sevugan tells ABC News. "After calling for a spending freeze, now he tells us he wants as much as $300 billion in new spending for a scheme that would have taxpayers subsidize the same banks on Wall Street that got us into this mess. John McCain’s response to the financial crisis gets more erratic by the day."
In an outline of the plan emailed to reporters during Tuesday's debate, the McCain campaign indicated that the $300 billion plan would be drawn exclusively from the recently enacted $700 billion Wall Street bailout.
On Wednesday, McCain adviser Douglas Holtz-Eakin altered the Tuesday night plan, saying it would be drawn from "several pots of money".
"The initiative would rely on authorities that have been provided, in recent months, by the Congress," said Holtz-Eakin on a Wednesday conference call arranged by the McCain campaign. "There's $300 billion worth of refinanced capacity at the FHA at this point. That can be combined with the statutory capacity of Fannie Mae and Freddie Mac, which are now owned by the federal government, for all practical purposes, to purchase mortgages."
"You know," he continued, "if a Fannie Mae or Freddie Mac bought 80 percent of the mortgage, you could leverage that $300 billion in refinancing tremendously. And there's also the $700 billion that was provided to the Treasury by the Congress. There's direct purchase authority in there to augment these as well, although it may be useful to reserve that for other purposes."
The designated funding source is not the only aspect of McCain's plan that changed from Tuesday to Wednesday.
As first reported by Politico's Mike Allen, McCain also changed the substance of the mortgage buy-up plan, "making it more generous to financial institutions and more costly for taxpayers."
The McCain campaign told reporters in a Tuesday issue paper that lenders "must recognize the loss that they've already suffered."
But when McCain posted his plan to the web on Wednesday, that sentence was missing.
"That language was mistakenly included in the initial draft and it's been corrected. It doesn’t reflect the intentions of the initiative, which necessitated the correction and the removal of the sentence," a McCain official told Politico. "A simple mistake."
October 9, 2008 in McCain, John, Obama, Barack, Vote 2008: Democrats, Vote 2008: Republicans | Permalink | User Comments (187)
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I'm sick of John McCain's SOCIALIST policies!
Sorry, I just couldn't resist. It's just too funny!
Posted by: Oh, the irony of it all | Oct 9, 2008 7:44:01 PM
When socialism comes to America, McCain will have wrapped it in a flag and Palin will - with a wink - carry its cross.
John McCain, American Comrade!
Posted by: sixpack | Oct 9, 2008 7:45:10 PM
yes - McCain, the great American comrade
Romney please
Posted by: redneck | Oct 9, 2008 7:46:39 PM
Forget Republicans. I am not in favor of them. Nancy Pelosi and Harry Reid submitted the proposal without full Majority. Some of their own Democrats did not support the bill. They failed miserably. This is where judgement issue comes. People like Obama should anticipate these kind of issue and be proactive and do necessary to make it happen.
Posted by: Tim | Oct 9, 2008 7:46:52 PM
As a republican I must admit, this man is just gets more erratic by the minute. I really belive his age and health are working hard against him. I am very concen about this as I dont want a SARAH PALIN president. I am sorry I am being honest.....I fell sory for McCain he lost this moderate republican vote...I also have a brother in WV and a recent poll Obama shows obama up by 8 points..Thats just amazing.
Posted by: Mike-Pa | Oct 9, 2008 7:46:56 PM
comrad j sydney mccain now that is what you call a leader--
Posted by: rodney | Oct 9, 2008 7:47:15 PM
My message was for Mr. Truth Hurts the GOP
Posted by: Tim | Oct 9, 2008 7:48:37 PM
mike wv--that truly is amazing----guess everyone is sick of his personal attacks --and his lack of knowledge on the main issues.
Posted by: rodney | Oct 9, 2008 7:54:51 PM
True. I do agree. As a mother I cant put my trust in McCain. He just does not understand the economy. When Americans are hurting McCain is just decided to go negative Sad. I am an independent voter and I very turn off by McCain and more so with Palin. I am like so many of my friends even republicans who dont fell comfortable with Sarah. They a say due to McCain health past issues they fell if he dies Sarah will take over, a scarry thought. The best choice this November for all Americans is Obama/Biden. Lets not make the same mistake by voting for the wrong ticket.
Posted by: Jess | Oct 9, 2008 7:57:21 PM
If there are those "several pots of money", why not use some of them to reduce gigantic loans US owes for China, Japan etc.
Someone needs to pay interests for that money as well.
Posted by: Mike | Oct 9, 2008 8:05:33 PM
I think that we are smarter this time, I hope. Theres is nothing, not one thing I should be voting for John McCain. Yes I am a proud republican and I will not change my party, It does not mean I will not put country first and vote for the best team. I proudly cast my vote for Obama/Biden
Posted by: Mark Lakes | Oct 9, 2008 8:05:46 PM
McCain is just not with it.
Posted by: John | Oct 9, 2008 8:07:55 PM
Don't worry, McCain will change this plan 4 more times before the election. If every play is a Hail Mary pass, you're going to lose the game. We need a solid, stead, intelligent president. That would be Obama.
Posted by: AppeaseThis | Oct 9, 2008 8:09:13 PM
Today, I called the manager of the trust fund for my grand kids to check on the losses. He stated he put the blame on the Democrats during the Clinton Administation for legislation making mortgage loans/money too easy for people who could not pay. He stated no safequards or regulations were built in at time of passage. It all started during years ago but we are paying the price now. Last thing he said, "Pray, Obama is not elected. It will only get worse for the average American family with the socialist agenda at work."
Joe did say, he would move some of my trust account funds around and try to protect it from further losses. I can only hope.
Please, please do not vote for one of the people responsible for our economic chaos. Vote McCain/Palin. Obama is all talk and no real solutions on any problems. SOCIALISTS DO NOT HAVE AMERICAN VALUES.
Posted by: Mai | Oct 9, 2008 8:11:17 PM
I'm so digusted with McCain's antics that I won't be voting for him now. What do his plans matter?
Posted by: johndal | Oct 9, 2008 8:11:59 PM
Jphn McCain's plan is crazy.....
I am not giving a bank another dime. Not off my back.
Posted by: enough | Oct 9, 2008 8:12:07 PM
I should be in govt. These guys have their own printing press for cash. I mean how do you go into office with a net worth of ten ofthousands and walk away after a failed two, four or six year term a freakin' multimilllionaire? People wake up, look at the crooks who claim to "represent" you. Then look at who their actions end up benefiting... Can we vote OUT the incumbents NOW!!!
Posted by: hmn | Oct 9, 2008 8:13:39 PM
Where will "New Money" come from? China I guess, since we already them billions anyway.
Posted by: Francheska | Oct 9, 2008 8:18:15 PM
The entire subprime lending structure intended to get loans to people who didn’t qualify for them by lowering lending standards. In fact, thanks to the Community Reinvestment Act and groups like ACORN, lenders got accused of RACISM if they didn’t lower their standards — and so long-established prerequisites for mortgages like income standards and down payments disappeared.
And where did the greed arise? It came from Congressional mandates to have Fannie Mae and Freddie Mac buy up subprime loans to provide short-term profits to the lenders lowering those standards. Who pushed those mandates? Obama’s own party. Who accused regulators like Armando Falcon of racism for blowing the whistle on the bad financial decisions at Fannie and Freddie resulting from the massive underwriting of these loans? Obama’s own party.
Posted by: Democrat Social Engineering Caused Subprime Meltdown | Oct 9, 2008 8:19:53 PM
My friend and I are arguing today at work. He said that Obama is a Muslim liar. I was so against what he said. I told him that Obama is not a Muslim, but he's a serial liar.
I hope somehow McCain can come from behind, despite falling poll numbers, increasing media hostility, and inches out Obama for the Presidency.
Posted by: young_voter | Oct 9, 2008 8:19:57 PM
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