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Obama Now Rejects McCain's Mortgage Buy-Up Plan
October 08, 2008 8:17 PM
ABC News' Teddy Davis and Rigel Anderson Report: Barack Obama's top economic adviser criticized John McCain's mortgage buy-up plan on Wednesday, saying it would cause the government to lose money by paying too much for bad loans.
McCain's top economic adviser responded with a statement of his own in which he argued that Obama would "rather support a bailout of Wall Street than rescue Main Street America."
During Tuesday's debate, McCain proposed devoting nearly half the $700 billion from the recent financial rescue package to buying troubled mortgages directly, rather than indirectly aiding the nation's financial markets by buying up mortgage securities.
The Obama campaign's initial reaction was a version of "me, too," and his press aides circulated a quote from last month when Obama had floated a similar idea while stopping short of formally proposing it.
"We could consider giving the government the authority to purchase mortgages directly instead of simply purchasing mortgage-backed securities," said Obama while campaigning in Clearwater, Fla., on Sept. 23. "In the past, such an approach has allowed taxpayers to profit as the housing market recovered. But, this is not simply a question of looking out for homeowners, it's doubtful that the economy as a whole can recover without the restoration of our housing sector, including a rebound in the home values that have suffered dramatically in recent months."
But as more details about the plan began to emerge on Wednesday, Obama's campaign shifted gears and came out against it.
Here are Tuesday's dueling statements:
Obama-Biden economic policy director Jason Furman : "Senator McCain’s first response to this economic crisis was to say that the fundamentals of our economy are strong. Since then, he’s acknowledged that there is a crisis and offered multiple plans, sometimes conflicting. Last night, in his latest attempt to get it right, he threw out a proposal that appeared to give the Treasury authority it already has to re-structure troubled mortgages. But now that he’s finally released the details of his plan, it turns out it’s even more costly and out-of-touch than we ever imagined. John McCain wants the government to massively overpay for mortgages in a plan that would guarantee taxpayers lose money, and put them at risk of losing even more if home values don’t recover. The biggest beneficiaries of this plan will be the same financial institutions that got us into this mess, some of whom even committed fraud. Since this beginning of this crisis, Barack Obama has demanded that any rescue plan must protect taxpayers and ensure that they share in any profit once the economy recovers, and he worked to include that principle in the plan that passed Congress. John McCain’s plan to overpay for bad mortgages by handing taxpayer dollars over to big financial institutions is erratic policy-making at its worst, and it’s not the change we need to strengthen our economy, create new jobs, and keep Americans in their homes ."
McCain-Palin senior policy adviser Douglas Holtz-Eakin: "By opposing John McCain's effort to help Americans stay in their homes, it is clear that Barack Obama would rather support a bailout of Wall Street than rescue Main Street America. Unlike Barack Obama, John McCain doesn't believe that working to keep Americans in their homes is 'too costly' and 'out of touch.' From his campaign's comments, it is clear that Barack Obama would rather see the taxpayers' money go to corrupt Wall Street firms like AIG than keeping Americans in their homes. If Barack Obama wants to defend using the taxpayers' money to prop up Wall Street instead of keeping people in their homes and providing jobs on Main Street, John McCain is happy to have that debate. Barack Obama says he wants to protect taxpayers but apparently that does not include protecting their homes."
October 8, 2008 | Permalink | User Comments (212)
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This is amazing. McCain's plan would primarily benefit middle class, older retirees, low income people who got subprime loans, refinanced and now have seen their home values plummet. If Wall street is getting a pass, why not these groups on Main St? After all I thought he wanted to help those on Main street.
Another issue, if the economy is so important, why has he not considered who would be his treasury secretary (if he became president)? Did he really give it more than a passing consideration? Does he believe Paulson is doing a fabulous job or is he relying on Nancy Pelosi/Barney Frank to do the recommendation?
Posted by: Really? | Oct 8, 2008 9:00:48 PM
OBAMA SUPPORTED bailing out Wall St. Billionares! Now he wants to "stick it" to the little guy, WTF???
Posted by: hmn | Oct 8, 2008 9:03:25 PM
I am exhausted from following the flip flopping Obama does. He never seems to have his own ideas and I can not believe no one sees that. He always comes out a day or two later saying what McCain has already said, he just twists the words around.What is he going to do as President? Wait for everyone to speak first so he can twist it into his own words or sit and ponder every night over the events of the day before he forms an opinion or act. We may need our President to act quicker than that and what if his advisors aren't around ?
Posted by: conf1689 | Oct 8, 2008 9:03:30 PM
-- I am exhausted from following the flip flopping Obama does. He never seems to have his own ideas and I can not believe no one sees that. He always comes out a day or two later saying what McCain has already said, --
Huh? McCain says bailout, Obama says no.
I think you are watching a different program than the rest of us!
Posted by: Concerned American | Oct 8, 2008 9:05:28 PM
Concerned American: another way to raise revenue and pay for everything is to revive the economy and collect more taxes without raising taxes.
Posted by: Kottaras | Oct 8, 2008 9:06:15 PM
-- This is amazing. McCain's plan would primarily benefit middle class, --
NO, it would benefit idiots who were irresponsible with their purchases, and it would be at the expense of those who were responsible with theirs.
Buying bad loans was what caused the financial crisis to begin with, and now McCain wants to repeat it, and with money we don't have!
Posted by: Concerned American | Oct 8, 2008 9:08:29 PM
JOHN McCAIN IS AN IDIOT!!!
John McCain wants to OVERPAY for bad mortgages by handing taxpayer dollars over to BIG FINANCIAL INSTITUTIONS which got the homeowners in trouble in the first place, with no guarantee that the financial institutions will do anything different in the future.
Plus there is ALREADY a provision in the current $700 BILLION DOLLAR BAILOUT BILL that INTELLIGENTLY deals with bad mortgages.
So John McCain is trying to use this pathetic unintelligent plan, to try manipulate people, and only stupid people will fall for it!!
Posted by: Lisa | Oct 8, 2008 9:10:48 PM
-- Concerned American: another way to raise revenue and pay for everything is to revive the economy and collect more taxes without raising taxes. --
Yes indeed, I'm glad someone sees it! Obamas tax plan would provide an immediate injection of capital to stimulate the economy. And his health plan would provide a double boost.. first by providing an additional estimated $140 billion in tax savings to companies providing health insurance to their employees, allowing them to create more jobs and increase production. Secondly, the increased number of insured Americans would boost revenue to health care providers, which would be further stimulus to create more jobs and have a ripple effect to other supporting market segments!
Posted by: Concerned American | Oct 8, 2008 9:13:13 PM
Concerned American: Careful with the term "ididots". Some of them are Democrats who McCain is trying to assist in times of economic turmoil.
Posted by: Kottaras | Oct 8, 2008 9:16:37 PM
McCain is too old for the job. Plus he's a loser.
End of story.
Posted by: Vicki | Oct 8, 2008 9:18:45 PM
-- Concerned American: Careful with the term "ididots". Some of them are Democrats who McCain is trying to assist in times of economic turmoil. --
Democrat, republican, it dosen't matter. There is a provision in the bailout bill that will deal with foreclosures. McCain just wants to buy bad loans and renegotiate the terms. Those people are not losing their homes to foreclosure, and an undervalued home is not causing a turmoil. Their house value may have gone down, but they are still living there and if they just stay put, those values will eventually rise, at which point they can either refinance or sell for a profit.
Posted by: Concerned American | Oct 8, 2008 9:22:47 PM
Welcome back West Coast!
Posted by: Dave in VA | Oct 8, 2008 9:23:05 PM
Vicki what has age got to do with it? Obama is younger, does he qualify for the top job? This job requires experience and resposibility. MCCain has both.
Posted by: Kottaras | Oct 8, 2008 9:25:08 PM
Obama is such a loser! He has learned to say what people want to hear but in no way does it resemble what he is or what he intends to do. Right now, he and Ayers are being looked into for their criminal activity in ACORN. More Chicago criminal action. This country does NOT deserve this. We've been hit with way too much from the dems, financially and criminally.
Posted by: Ann | Oct 8, 2008 9:26:34 PM
Hey Concerned American
I'm an ex-democrat.I left the party
when Hillary dropped-out from the
race.....I'm anti-Obama......
Obama is an opportunist,fake and an idiot.....He has no real power and his
own party members don't like him....
If he gets elected[i hope NOT] he will
create more problems in this country,more than we face today....Also
he will be a backfire to blacks.....
Remember me.......
Best choice is :
McCAIN/PALIN '08
Posted by: Nicholas | Oct 8, 2008 9:27:30 PM
-- This job requires experience and resposibility. MCCain has both. --
Both? He may have experience with the military, but he has shown several times just withing the last month or so that he is irresponsible and tends to overreact.
Obama has acted rationally and intelligently, and shown the kind of judgment that most respect in a leader.
Throw in their positions on the issues that really matter, and the choice becomes even easier.
Posted by: Concerned American | Oct 8, 2008 9:30:15 PM
-- I'm an ex-democrat.I left the party
when Hillary dropped-out from the
race.....I'm anti-Obama...... --
Then you are not voting for McCain, you are voting against Obama.. which is irrational and one of the reasons we wound up with 8 years of a numnuts in office.
Posted by: Concerned American | Oct 8, 2008 9:32:19 PM
Have you seen the "exclusive interview" by Sean Hannity with McCain & Palin?
What a JOKE!! Hannity fed them easy questions and it sounded like he was giving them a chance to continue the debate, except without Obama there. That's the only way that stinking ticket can win a debate. Hannity KNOWS the facts about who raised taxes and on who (millionaires). Yet when palin again brought up the "94 votes to raise taxes", Hannity didn't question the facts. The facts are that the 94 votes were not all to raise taxes, less than a quarter of them were to raise taxes, and then only on people making $1million or more. Anyone reading this make that kinda scratch?? When asked about Ayers again, they brought up old news and Hannity didn't even ask about Palin's husband being part of the radical group that wants to secede from the union. Why??
The facts are that the McCain will keep repeating their lies because they think that the more they repeat them, the more the voters will think they are the truth! If I were assigned to McCain's ship, I would mutiny because of the marbles he always has in his hand because the sound of them hitting each other calms him down!!
Hannity is a conservative lap dog, nothing more, nothing less. He is not a responsible journalist! Responsible journalists will ask TOUGH questions that BOTH sides will have to answer, not just the candidates that his keepers want to appear "truthful".
Posted by: Desert Storm Veteran | Oct 8, 2008 9:33:09 PM
McShame is trying to screw us again!! I am not an economist, but what McShame is trying to do is enrich his rich friends again!! He wants the government to pour another 300 billion to buy all those bad mortgages, but because the government cannot own these mortgages, he has to sell it to the lowest bidder, who as we all know are his friends. Thus the banks holding these mortgages will sell it to the government at the current high unsustainable rate. In turn the government has to unload it, and the same McShame friends will then buy it back at the lowest bidding rate. So these banks sell high, then buy it back low. Then they will complain that they are on the brink of bankruptcy, and ask the government for another BAILOUT, using our hard-earned money. So the 300 billion spent by McShame will now be down the drain and another 600 billion will have to be spent bailing out these same bankers. All of them enrich themselves, including McShame!! BIGGEST LOSERS?? We, the American people. SAY NO TO MCSHAME!!!
Posted by: Sareena Jones | Oct 8, 2008 9:34:31 PM
Planting Seeds of Disaster: ACORN, Barack Obama, and the Democratic party
You’ve got only a couple thousand bucks in the bank. Your job pays you dog-food wages. Your credit history has been bent, stapled, and mutilated. You declared bankruptcy in 1989. Don’t despair: You can still buy a house.” So began an April 1995 article in the Chicago Sun-Times that went on to direct prospective home-buyers fitting this profile to a group of far-left “community organizers” called ACORN, for assistance.
At the time, however, that 1995 Chicago newspaper article represented something of a triumph for Barack Obama. That same year, as a director at Chicago’s Woods Fund, Obama was successfully pushing for a major expansion of assistance to ACORN, and sending still more money ACORN’s way from his post as board chair of the Chicago Annenberg Challenge. Through both funding and personal-leadership training, Obama supported ACORN. And ACORN, far more than we’ve recognized up to now, had a major role in precipitating the subprime crisis.
...
Another factor working in ACORN’s favor was that its increasing success with local banks turned those banks into allies in the battle with Fannie and Freddie. Precisely because ACORN’s local pressure tactics were working, banks themselves now wanted Fannie and Freddie to loosen their standards still further, so as to buy up still more of the high-risk loans they’d made at ACORN’s insistence. So by the 1993, a grand alliance of ACORN, national Democrats, and local bankers looking for someone to lessen the risks imposed on them by CRA and ACORN were uniting to pressure Fannie and Freddie to loosen credit standards still further.
...
Up to now, conventional wisdom on the financial meltdown has relegated ACORN and the CRA to bit parts. The real problem, we’ve been told, lay with Fannie Mae and Freddie Mac. In fact, however, ACORN is at the base of the whole mess. ACORN used CRA and Democratic sympathizers to entangle Fannie and Freddie and the entire financial system in a disastrous disregard of the most basic financial standards. And Barack Obama cut his teeth as an organizer and politician backing up ACORN’s economic madness every step of the way.
http://article.nationalreview.com/?q=ZjRjYzE0YmQxNzU4MDJjYWE5MjIzMTMxMmNhZWQ1MTA=&w=MA==
Posted by: LightSeeker | Oct 8, 2008 9:37:37 PM
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