Presidential hopefuls Sen. John McCain and Sen. Barack Obama both blamed Washington for irresponsible spending and urged Wall Street reform Monday after lending giant Lehman Brothers filed for bankruptcy and Bank of America announced plans to buy out Merril Lynch.

In a year of faltering Wall Street firms, the news drew focus to the bailout powers of the Federal Reserve once again, following the federal takeover of lenders Fannie Mae and Freddie Mac last month. McCain has long been against government bailouts in cases of irresponsible lending.

“I am glad to see that the Federal Reserve and the Treasury Department have said no to using taxpayer money to bail out Lehman Brothers, a position I have spoken about throughout this campaign,” McCain said in a press statement, calling the Lehman Brothers crisis “the latest reminder of ineffective regulation and management.”

Obama, who has been a stronger supporter of government intervention, agreed that current regulation has been ineffective, saying, “too many folks in Washington and on Wall Street weren’t minding the store,” in his own press statement.

McCain described his administration’s planned efforts to “replace the outdated and ineffective patchwork quilt of regulatory oversight in Washington and bring transparency and accountability to Wall Street.” The Arizona Republican has long been a proponent of increasing lender responsibility in the private sector.

At a rally in Jacksonville, Fla., McCain told called for stricter government regulation to avoid major federal bailout.

“We will never put America in this position again,” McCain said, according to Bloomberg news.
The McCain camp also released a TV ad Monday morning pledging to help the country’s “economy in crisis.”

“Only proven reformers John McCain and Sarah Palin can fix it,” the ad’s announcer says.

Senator Obama tied McCain’s financial proposals to that of the Bush administration, calling his opponent’s philosophy one “that says even common-sense regulations are unnecessary and unwise, and one that says we should just stick to our heads in the sand and ignore economic problems until they spiral into crisis.”

Referring to the current Wall Street predicament the “most serious financial crisis since the Great Depression,” Obama called for “modernizing the rules of the road to suit a 21st century market.”