Obama, McCain refine plans for handling economic crisis

CLEARWATER, Fla. — Barack Obama and John McCain offered more details Tuesday about what they would do to bail out the nation's struggling financial institutions, with both men demanding remedies that provide greater oversight and taxpayer protections.

The presidential rivals held dueling news conferences devoted to the financial crisis on a day congressional leaders balked at the Bush administration's $700 billion plan to buy troubled investments that have shaken some of the most venerable financial firms on Wall Street.

Both candidates are struggling with the fallout from a financial crisis that neither had foreseen. Obama conceded that as president he might be compelled to defer pieces of his $130-billion-a-year spending plan if the economy worsens. McCain has been forced to re-examine his long-held view that free-market solutions work best and is calling for tougher regulation.

The plans put forward by the pair are nearly identical in important respects.

Both candidates said they are uncomfortable with the sweeping powers the Bush proposal would give to the secretary of the Treasury. They recommended creation of an independent board that would oversee the rescue.

Obama said "the power to spend $700 billion of taxpayers' money cannot be left up to the discretion of one man, no matter who he is or which party he is from. I have great respect for [Treasury] Secretary [Henry] Paulson, but he cannot act alone."

Each is calling for measures that would permit taxpayers to recoup some of the public money sunk into the deal. Obama wants to impose a "financial stability fee" — charged to financial institutions — that would be used to repay households for the massive public outlay.

McCain and Obama both said Wall Street executives should not be able to collect excessive payouts as a result of a government bailout.

Yet differences remain. Obama said he would like to see an economic-stimulus package for families struggling to pay bills and stave off foreclosure.

McCain, at a Dow Corning solar-panel factory in Freeland, Mich., made it clear he would not support such a stimulus package. "I don't think anything should be added to this legislation," he said. "This legislation should stand on its own."

He also criticized Democratic leaders in Congress who have indicated they may not support the proposal until McCain also signs on to provide bipartisan support.

"For the Democrats to say that their vote is going to be gauged on my vote frankly doesn't do them a great deal of credit," McCain said.

McCain said he will seek "basic improvements" to the legislation as it moves forward.

The legislation, he said, needs greater provisions for accountability, possibly including an independent oversight board, and a yet-undefined "path for taxpayers to recover the money." The price tag works out to $10,000 for each American family, "and that money cannot simply go into a black hole of bad debt with no means of recovering any of the funds."

An open question is how far McCain and Obama will push to see their principles folded into the rescue plan.