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Candidates Voice Concerns for Taxpayers Amid Bailouts

September 22, 2008 at 6:30 PM EDT
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As the government seeks to shore up the stability of U.S. financial markets, Sens. John McCain and Barack Obama expressed concern over the consequences of the massive bailouts for average taxpayers. Political reporters recap the latest news from the campaign trail.
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GWEN IFILL: With only a little over six weeks to go before Election Day, the economic crisis is also making itself felt on the campaign trail. Both major presidential candidates focused on it today.

SEN. BARACK OBAMA (D), Illinois: True economic recovery requires addressing not just the crisis on Wall Street, but the crisis on Main Street.

GWEN IFILL: The administration’s evolving bailout plan was Topic A for both candidates today. Campaigning in Wisconsin, Democrat Barack Obama emphasized the consequences of any potential solution.

SEN. BARACK OBAMA: We need a plan that helps families stay in their homes and workers keep their jobs, a plan that gives hardworking Americans relief instead of using taxpayer dollars to reward CEOs on Wall Street.

And we cannot give a blank check to Washington with no oversight and no accountability when no oversight and accountability is exactly what got us into this mess in the first place.

GWEN IFILL: But McCain, Obama said, is part of the problem.

SEN. BARACK OBAMA: Let’s be clear. When it comes to regulatory reform, Sen. McCain has fought time and time again against the commonsense rules of the road that could’ve prevented this crisis.

John McCain voted for those laws and those policies again and again and again. And he now claims that he’s the one who can clean it all up.

SEN. JOHN MCCAIN (R), Arizona: My plan is about keeping people in their homes and safeguarding the life savings of all Americans by protecting our financial system and capital markets. Those are our priorities.

GWEN IFILL: In Pennsylvania, Republican John McCain said government oversight should be expanded beyond the Treasury secretary.

SEN. JOHN MCCAIN: I’m greatly concerned about the plan that gives a single individual the unprecedented power to spend $1 trillion — $1 trillion — without any meaningful accountability.

Never before in the history of our nation has so much power and money been concentrated in the hands of one person, a person I admire and respect a great deal, Secretary Paulson. This arrangement makes me deeply uncomfortable.

We won’t solve a problem caused by poor oversight with a plan that has no oversight. And part of the reason we’re facing this crisis is an antiquated regulatory system of uncoordinated agencies that just haven’t been doing their job. We must help keep people in their home, we must protect American savings, and we must keep students with loans in school.

GWEN IFILL: Obama also promised to cut $40 billion in government spending. The McCain campaign dismissed his plan as “all talk and taxes.”

Taking similar approaches

GWEN IFILL: Here to help explain what the candidates are saying and what it means, are Amy Walter, editor-in-chief of the Hotline, National Journal's political daily, also, New York Times political reporter Jackie Calmes.

Welcome to you both.

Amy, what is it that they were saying or they're trying to say and what does it mean?

AMY WALTER, Editor-in-Chief, The Hotline: Two very good questions. They both sounded like they're saying basically the same thing, right? Washington is broken; Wall Street's broken. We're going to both fix it up, partly by doing more oversight, partly by going out and doing some long-term plans.

Basically, it feels a lot like a disinfectant kind of policy, which is we're going to open this up, clean things out.

And the problem right now, I think, for a lot of voters is it still doesn't necessarily address what's happening today and what the bailout plan could mean for them specifically.

And I think part of the problem is these guys don't quite know yet exactly what the plan is going to look like. That's not been hammered out yet. So right now, they're talking about more long-term solutions, you know, as you heard in the piece here, making sure that -- taking out the lobbyists, keeping it more open, making sure there's more oversight.

So that, fundamentally, that's the focus that they're on now. As senators, of course, they're ultimately going to have to vote on something. And right now, we don't know exactly what that is.

GWEN IFILL: So, Jackie, given that these are two very different candidates, how different are their -- have been their approaches to this and how much alike?

JACKIE CALMES, New York Times: Well, like Amy said, they do sound exactly alike. And their approaches -- it's really too early to tell what they would do. They're both talking about protecting the taxpayer, number one and, number two, curbing chief executives of these companies, curbing their compensation, which is a very popular thing to say, of course.

And this is one of the demands that Democrats in Congress are making of the administration now, as a quid pro quo for approving this $700 billion asset swap plan.

And I say asset swap plan because, while it is a bailout -- certainly the biggest in history, probably -- what really the candidates are doing is sort of feeding the public's confusion about just what this is, because ultimately $700 billion won't be spent. Some of that will come back in the -- when these assets are resold.

But it's all feeding this idea that people, that the voters are confused. I think we're at a watershed moment right now.

And this -- the reaction that they're hearing from voters and in Congress that's being reflected that is sort of raising questions about this plan, you see today the stock market closed 373 points down.

Appealing to voters on the economy

GWEN IFILL: You know, Amy, as we listen to these candidates, we try to put the real policy action that they talk about onto what kind of candidates they're trying to be and who the voters are trying to appeal to.

So when they both talk about deregulation -- and we hear John McCain say things like Andrew Cuomo would be -- a Democrat would be a good secretary of -- a good head of the Securities and Exchange Commission, who's he speaking to with a comment like that?

AMY WALTER: And when Barack Obama's plan, by the way, it's an 11-point plan called -- this is literally what it's called -- Plan to Reform the Greed and Excesses of Washington. Who could that be going to?

So when 80 percent of voters in this country say things are off on the wrong track and we want a new direction, and when Congress's approval rating is somewhere in the teens, that's exactly who they're trying to talk to, these voters who say, "I want change. I clearly think that things are going the wrong way, but I don't quite know yet who's going to bring that to me."

And what I find fascinating, too, is we have two candidates right now talking about plans, about the big economic problems for this country, and yet when they were asked the other night on "60 Minutes," OK, well, given the fact -- and, as Jackie points out, it may not be $700 billion, but we don't know what the debt is going to look like once they take office, but it's going to be a lot bigger than it is today -- don't you think you should maybe scale back on a lot of these campaign promises you've been making? No, we don't need to do that at all.

The reality behind the promises

GWEN IFILL: Yes, well, that's another question, Jackie, which is we have the Republican talking about the increased need for oversight and regulation and the Democrat talking about today -- we heard Barack Obama talking about spending cuts, even though his health care plan alone would cost a lot more money. How do these things all come -- how can they be explained?

JACKIE CALMES: Well, I think we are truly at a watershed moment, perhaps, in our politics right now that's going to amount to a turn from the time going back to the, you know, when Ronald Reagan came to Washington 30 years ago, nearly, that deregulation was in vogue.

And if you talked about regulating business, you had to defend it -- the only way you could really pass new regulations is if it had some public good, like clean air, clean water.

But now you see John McCain is on the defensive about regulations or deregulation, after a career spent promoting that idea. And it's the Democrats who have been on the defensive for over a quarter century when they talk about regulations are now boasting about it.

And when it comes to spending, you know, neither Barack Obama nor John McCain's talk of spending cuts would come near to addressing the deficits we're facing, and that was even before we started spending this money on bailing out Wall Street.

And, you know, John McCain, the earmarks, that would be like rounding error in the size of the deficit, if you did away with every one of them, which, of course, you won't.

And then -- and Barack Obama, like you say, is sticking with his plan. He says we'll save money when we end the war in Iraq. Well, that's hardly money you can take to the bank.

And so it's going to be -- you know, we've gotten to the point where you wonder, why would anyone want to be president?

McCain, Obama's credibility

GWEN IFILL: Well, you know, there is that question. But, you know, there is also one more thing, which is -- there's a subtext. There are a couple subtexts going on. One is about taxes and taxation, but the other is, who is advising whom?

We hear a lot, Amy, especially in advertising, campaign advertising about who is more credible on this issue based on who his advisers are.

AMY WALTER: Right. And I think, for most voters, that kind of goes over their head. I mean, inside Washington, we talk about a lot of these names we're throwing -- we're seeing thrown around right now on the campaign, too, who worked for Fannie Mae and Freddie Mac, and whose advisers were once lobbyists.

Right now, it seems sort of a wash right now, in terms of the back-and-forth on this.

The reality is, yes, John McCain has been in Washington a lot longer than Barack Obama, so it would seem that this would be an attack that would stick much more to him than Obama.

However, John McCain comes into this campaign with very high favorable ratings. He has already an established identity as something of a maverick. This is not a traditional Republican candidate.

So he gets a benefit of the doubt here that I think another Republican candidate who's spent as much time in Washington as McCain wouldn't get.

Obama, meanwhile, doesn't have as much time in Washington, but any time you've been around Washington, any time you're doing work in politics, you're going to be around insiders.

GWEN IFILL: Things stick.

AMY WALTER: Yes, and you're also around insiders. I mean, I think this is part of the problem. When you're trying to run against Washington from Washington, it becomes a very difficult argument to make.

GWEN IFILL: Amy Walter and Jackie Calmes, thank you both very much.

AMY WALTER: Thanks.

JACKIE CALMES: Thanks, Gwen.