McCain criticizes Fed bailouts; Obama calls for tougher oversight
John McCain says regulators should protect consumers and punish fraud and predatory lending. Barack Obama urges decisive bipartisan moves to aid working families.
GREEN BAY, WIS. — Republican John McCain criticized the U.S. government's response to the economic meltdown on Wall Street today, saying the Federal Reserve needed to stop bailing out failed financial institutions and get back to its "core business of responsibly managing our money supply and inflation."
The Fed this week crafted an $85-billion bailout of insurance giant American International Group, which followed Treasury Department rescues of Fannie Mae and Freddie Mac and of Bear Stearns.
Treasury Secretary Henry M. Paulson said this morning that he planned to work through the weekend with congressional leaders on a comprehensive plan to address the root causes of the financial crisis. The plan, which could involve the government taking over banks' bad debts, "needs to be big enough to make a real difference and get to the heart of the problem," he said. "We're talking about hundreds of billions" of dollars.
Democratic presidential nominee Barack Obama, in Coral Gables, Fla., met with his top economic advisors, including investor Warren Buffett, former Treasury Secretary Robert E. Rubin and former Fed Chairman Paul A. Volcker. At a news conference afterward, Obama endorsed giving "broad authority" to the Treasury Department to deal with the credit crisis.
But he criticized the Bush administration, saying it had ignored Main Street in favor of Wall Street, and called on the White House -- which has asked for a bipartisan approach to solving the economic crisis -- to use the same benchmark for solving the crunch for working families.
"For too long this administration has been willing to hit the fast-forward button in helping distressed Wall Street firms while pressing pause when it comes to saving jobs or keeping people in their homes," Obama said.
"In the same bipartisan spirit that is being shown with regard to the crisis on Wall Street, I ask Sen. McCain, President Bush, Republicans and Democrats to join me in supporting an emergency economic plan for working families" to help them pay for rising costs of gasoline, food and housing.
Endorsing the government's "unprecedented action" to address the crisis on Wall Street, Obama warned that the plan "must be temporary and coupled with tough new oversight and regulations of our financial institutions."
