RKMBs Forums .::Important::. Politics and Current Events McCain Was Right, Obama Wrong

WASHINGTON – Senate Democrats prepared Sunday to answer a request for the remaining $350 billion in financial industry bailout funds as the Bush administration and President-elect Obama undertook a tag-team effort to obtain the money from reluctant lawmakers.

A vote in Congress is likely as early as this week, several senators predicted after receiving a rare Sunday briefing from top Obama economic adviser Larry Summers on the Wall Street bailout, as well as on Obama's separate $800 billion-or-so economic recovery plan.

President Bush would request the additional money for the Troubled Asset Relief Program, or TARP, but the incoming administration would make the case for it by laying out a series of changes in how the program is run. More of the money would go directly to relieve homeowners threatened with foreclosure, said Senate Banking Committee Chairman Christopher Dodd, D-Conn. A fuller accounting of the money already spent is needed as well, Dodd said.

"Larry Summers made a very strong argument for why it's important and critical for the overall recovery," said Sen. John Kerry, D-Mass. "And I think that's an argument that most senators understand."

Summers sought to win over Senate Democrats even as the GOP leader of the House, John Boehner of Ohio, warned that any effort to release the additional money would "be a pretty tough sell." Boehner appeared on CBS' "Face The Nation."

A request would force a vote within days on whether to block the funding, but the deck is stacked in favor of Bush and Obama winning release of the remaining $350 billion. Congress can pass a resolution disapproving the request, but the White House could veto the resolution; then, just one-third of either chamber would be needed to uphold the veto and win release of the money. Senate leaders would prefer to win a majority vote, Dodd said.

The idea is to make the money available to the new administration shortly after Obama takes office Jan. 20. The unpopular bailout has featured unconditional infusions of money into financial institutions that have done little to reveal what they've done with it.

Treasury Secretary Henry Paulson originally promised the money would be used to buy up toxic mortgage-related securities whose falling values have clogged up credit markets and brought many financial institutions to the brink of failure.

Senate Majority Leader Harry Reid indicated Sunday that Bush and Obama officials are near agreement on submitting notice to Congress about using the remaining $350 billion.

"We're waiting to hear from President Bush and or President-elect Obama as to what, if anything, they're going to do," said Reid, D-Nev., "and that's occurring as we speak."

"The likelihood is that we'll have some kind of vote on that somewhere in the course of the week," Kerry said.

But to prevail, Obama and his team must soothe senators who feel burned by the way the Bush administration has used the TARP.

"The (incoming) administration ... is going to fundamentally alter how this is being managed," Dodd said. "The concept is still very sound and solid and it is needed. But it's not going to pass around here unless there's a strong commitment to foreclosure mitigation."

Dodd said lawmakers were demanding other conditions, such as more concrete steps to limit executive compensation and make recipients of the funds be more accountable.

The Congressional Oversight Panel raised detailed questions last week about how banks are spending the first $350 billion, how the money will combat the rising tide of home foreclosures and Treasury's overall strategy for the rescue. In instance after instance, the panel said, the Treasury Department did not offer adequate responses.

In an interview aired Sunday on ABC's "This Week," Obama said he has asked his economic team to develop a set of principles to ensure more openness about how the money is spent. Under consideration by Obama aides and congressional Democrats are proposals to limit executive pay at institutions that receive the money and to force such institutions to get rid of any private aircraft they may own or lease.

"I think that when you look at how we have handled the home foreclosure situation and whether we've done enough in terms of helping families on the ground who may have lost their homes because they lost their jobs or because they got sick, we haven't done enough there," Obama said.

Pat Buchanan is God and minorities are inferior.

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."
...

at least you admit the wrong guy won.

...

ABC

Nice thread title change, queer boy. I thought you were against that kind of thing?

Claiming to have brought something up first after the fact is hardly the same thing. Furthermore, McCain was actively advocating it as a policy, whereas Obama was not.

McCain did the same thing...that makes it okay...Obama will save us all...the talking heads on my television are never wrong...

John McCain is red in the face and hopping mad. I’m sitting in his office in the Senate Russell Office Building, and he’s just rushed in after delivering a speech on the Senate floor where he seethed about the earmarks in the Homeland Security Bill.

“Can you believe they are putting $6 million of pork into Homeland Security?” he asks with his trademark clenched-fists. “They promised they wouldn’t do that. Ben Nelson [the Democratic senator from Nebraska] just inserted a $200,000 museum in Omaha into the legislative branch appropriations bill. These earmarks are a creeping disease. First members condemn them, then they condone, then they embrace them.” Then Mr. McCain adds, “Eight or nine Republican appropriators routinely vote for this pork.” Shaking his head he says, “It’s killing our party.”

If you thought that the senior senator from Arizona would ride off into the political sunset last November, inconsolable after losing his bid for the presidency, think again. He’s over it. And he’s as energized and spry as ever I’ve known him.

I interviewed John McCain for these pages four years ago when he was just launching his presidential campaign. Now I’m here to see how he is coping with defeat, and what his priorities are this year.

Many feared he’d become the Obama administration’s ambassador to the Republican Party, cutting deals to get things done. On the contrary: He’s emerged as one of the lead critics of Obamanomics.

He says he has worked to keep his relations with President Barack Obama “cordial,” but he pulls no punches criticizing the president’s economic policies. “Never. Never have I seen such a transfer from the private enterprise system to the government of such massive scale,” he says. He goes through the list: car companies, banks, insurance firms owned by government, and he especially grimaces when he mentions the $787 billion stimulus package.

View Full Image
wintermoore
Terry Shoffner
wintermoore
wintermoore

Not much has improved because of the stimulus. Mr. McCain scoffs, “And now, the answer is, according to the Obama economists, we didn’t spend enough.” He’s referring to the notion that we should have a second stimulus. This is not something the senator favors.

Asked about the deficits, his response is blunt. “I think it’s the biggest problem we’ve ever faced.”

Ever? “Yep,” he replies. “The only time where we amassed greater debt was during World War II, and that was temporary spending. We won the world war and then cut back. But now . . . the spending is permanent.”

“Look, this is a very popular, attractive, and eloquent president,” he continues. “But I think he was elected to govern in a centrist fashion. And instead,” he says, the administration is “governing from the far left.” Mr. McCain thinks this approach will capsize. “They don’t get that this is a right-of-center nation. Sooner or later, it becomes increasingly clear to the American people that he’s out of sync with the majority.” The latest polls are already showing some of this slippage: Mr. Obama’s favorable rating is now just over 50%, down from 70% his first weeks in office.

Will Mr. Obama ever move to the center as President Clinton did? “He will try to, but he’s got an overwhelmingly liberal Congress and his political instincts are to move to the left. It’s not an accident that he has the most liberal voting record in the United States Senate,” he says, reciting a line from his campaign. On health-care reform, Mr. McCain calls the Pelosi bill “a fish in the sun” that smells more rotten the longer it sits. But he’s worried that this may end badly. The administration has “co-opted the hospitals, he’s co-opted the pharmacists; he’ll co-opt AMA [American Medical Association]. And by the way, if the pharmaceutical companies can save us $100 billion, why don’t they do it now? For the love of God, doesn’t this mean that they’ve been ripping us off?”

In the 2005 interview, Mr. McCain told me rather famously that “I don’t understand economics very well.” The Obama team echoed that phrase throughout the campaign. It’s still stuck in his craw, and it’s one of the first topics he brings up.

“Could I mention, Steve, that I kept hearing during the campaign the stuff about McCain being weak on economics. They obsessed about this in the media. They never said Obama is weak on economics. I came to Washington as a Reaganite limited government tax cutter.” He’s right about the media treatment. Neither candidate had a strong command of economics—certainly not Mr. Obama, as events have shown. Mr. McCain was simply being honest.

He seems perplexed that his pals in the media turned on him in 2008 after years of worshipful press treatment. “In 2000 [when he ran against George W. Bush] I used to go chat with reporters on the back of the bus, and we would have these long, pleasant conversations . . . . I was the underdog clawing my way up. But then in 2008, I noticed that it would be kind of a gotcha session with the press—a totally more hostile attitude.”

Yet conservatives had warned Mr. McCain that he would remain a media darling up until the moment he won the GOP nomination, at which time they would rip him apart. I’m only surprised that he was surprised this happened.

Mr. McCain is initially reluctant to talk about the campaign, but he provides me with snippets of what went right and wrong. He believes that he could have won the election had it not been for the market collapse in mid-September. “We were three points up on September 14. The next day the market lost 700 points and $1.2 trillion in wealth vanished, and by the end of the day we were seven points down. We lost the white college graduate voters, who became profoundly disillusioned with Republicans. And by the way, that was the way it ended up. We lost by seven points.”

He certainly was dealt a lousy hand. But I challenge him on whether he might have played that hand better. During the first days of the financial crisis, Mr. McCain looked indecisive and worse, a creature of Washington insider politics. Why did he suspend his campaign, and why did he vote for the $700 billion bank bailout plan, which was wildly unpopular with voters?

“You have no idea the pressure I was under,” he says. “I remember being on the phone with President Bush, Vice President Cheney, the Treasury secretary and [Fed Chairman Ben] Bernanke. They assure me the world financial system is going to collapse if I don’t vote for the bill. So I do the impetuous and rash thing by saying, look, I have got to go back to Washington and see how I can help. And by the way, so did Obama—but it was McCain that was the impetuous one. Obama came back to Washington.” Mr. McCain grumbles, “He was at the White House with me. But he wasn’t impetuous.” This is the only time in our interview he shows any bitterness about the campaign.

He feels he was misled by the Bush economic team. He wanted the focus of the rescue plan to be on housing and home owners under water—not the lenders or the big banks. “Paulson and Bernanke both told me on the phone, our primary focus is going to be on the housing crisis. That’s our primary focus. And then three days later they switched their whole priorities around.” Instead, the Bush administration got a $700 billion check from Congress to save banks, investment houses and eventually car companies.

Had he been president, Mr. McCain says he would have done things differently. “Small business has been ignored in this whole bailout. You know, I hate to use the word but it seems to me that the philosophy of Tim Geithner and Ben Bernanke is trickle down, you know? Save Wall Street, save these financial institutions and then maybe they’ll have enough money to loan to the small business person. Wall Street seems to be doing okay. The executive salaries are fine.”

He continues: “But I just came from driving down Central Avenue in Phoenix and saw closed up storefronts because they’re too small to save, but these giant banks are too big to fail.” This is vintage John McCain, the economic populist fighting for the little guy.

If the market crash was the low point, I ask him for his best memory from the campaign. “The high point, I think, was the convention, the selection of Sarah Palin, and the enthusiasm that was generated all over the country.” His fondness for Mrs. Palin and her family strikes me as from the heart; he believes she was a net asset for the ticket.

“Let’s face it,” he says, “she galvanized our base in a way that I couldn’t. Everywhere she went she drew enormous and enthusiastic crowds like a rock star.” He says his only regret in selecting the Alaska governor was that no one on the campaign predicted the ferocity of the assaults against her. “To the liberal left, particularly the feminists, she is their worst nightmare.”

Since Mr. McCain was the co-sponsor of the McCain-Lieberman bill last year to limit CO emissions through a cap-and-trade system, I ask him about the climate change bill that passed the House last month and he surprised me with his opposition. “I believe climate change is real . . . but this 1,400-page bill is a farce. They bought every industry off—steel mills, agriculture, utilities,” he says.

So you wouldn’t vote for the House bill? “I would not only not vote for it,” he laughs, “I am opposed to it entirely, because it does damage to those of us who believe that we need to act in a rational fashion about climate change.”

A s Mr. McCain keeps circling our discussion back to fiscal responsibility, I ask him if the trillion dollar deficits are a sign that America is an empire in decline. “I think there’s a risk of that . . . unless we change. I’m a student of history. The shift in power from the British to the United States took place when the economy and the world’s gold reserves shifted and Britain went from the world’s [creditor] to a world debtor. The same thing could be happening now. I emphasize ‘could.’”

My last question is about the possibility for a 2012 rematch against Mr. Obama. “No chance,” he says.

But the good news for those who admire this maverick is that he’s likely to stay in the Senate for years and is focusing single-mindedly on holding back Obamanomics. For now, that means trying to stop budget busters like ObamaCare, but also saving a few million dollars at a time by cancelling museums in Nebraska, turtle crossings in Florida, and the endless flow of dollars to Democratic Rep. John Murtha’s airport to nowhere in Johnstown, Pa.

And then Mr. McCain is out the door—running to vote on another anti-pork amendment.