The Bush administration announced plans to overhaul U.S. financial regulatory structure Monday, the latest in a stream of stories on economic woes. Representatives from the Clinton, McCain and Obama campaigns discuss their candidates' views on the ailing economy.
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Next, how candidates McCain, Clinton and Obama view the president's plan to overhaul financial regulations. Judy Woodruff has that story.
The Bush administration's proposal for overhauling the nation's financial regulatory agencies has garnered mixed reviews from Wall Street, Capitol Hill, and from the presidential campaign trail.
The plan gives the Federal Reserve greater oversight of market stability; merges several bank-supervising agencies into one; and creates a third regulator to protect consumers and investors.
But with time running out on the Bush administration, the task of reforming the regulatory system likely will fall to the next president.
For the views of those vying to be the next president, we turn to economic advisers from each campaign.
Gene Sperling was national economic adviser for President Bill Clinton, and he now advises Hillary Clinton.
Georgetown Law Professor Daniel Tarullo also served as an adviser to President Clinton, but now advises Barack Obama.
And former Congressional Budget Director Doug Holtz-Eakin now advises John McCain.
Gentlemen, thank you all three for being with us. Let's start with a broad look at what the treasury secretary of the Bush administration essentially laid out yesterday.
First of all, let me turn to you, Dan Tarullo. What does Barack Obama, your candidate, think in broad terms about this proposal?
DANIEL TARULLO, Adviser, Barack Obama:
Well, first and most importantly, he feels that the priority for the country needs to be dealing with the current housing crisis, the current freeze in the credit markets. And that is where he would put his emphasis, and regrettably the administration has yet to address that issue.
With respect to Secretary Paulson's plan, however, Senator Obama, as he indicated in his speech last week in New York, does believe that the country needs significant financial reform.
Our regulatory system has let us down. We've had multiple opportunities in the last 10 or 15 years to take account of the new forms of financial activity. We haven't done so. And so he is glad that there is a debate started.
Having said that, he feels that there are some real shortcomings in the plan.
Well, we'll talk about those in just a minute.
Let me turn to you, Gene Sperling, representing the Hillary Clinton campaign. What is her sense of this broad plan?
GENE SPERLING, Adviser, Hillary Clinton:
I think her sense is that she thinks it's positive that Secretary Paulson is at least starting this conversation. She certainly doesn't agree with everything that's in the plan, but I think what her problem is, is that the administration just does not seem to appreciate that we need immediate action for an immediate crisis.
So I think the analogy that's been used by others, which is I think correct, which is it's a little bit like you're in the middle of a natural disaster, you've got people stranded, there's been no real plan by the administration, and somebody comes up with a long-term plan to restructure FEMA.
It's an important discussion to have, but it's an odd discussion to put the focus on when you still haven't had the immediate action that's needed to kind of stabilize the housing market.
All right, Douglas Holtz-Eakin, what does John McCain think of this?
DOUG HOLTZ-EAKIN, Adviser, John McCain:
Well, this may be one of those rare moments of bipartisan unity on this issue, in that there's a clear and pressing need to deal with the mortgage crisis. And I'm sure we'll come back to that.
The senator thinks it's important to overhaul our financial system. We have a patchwork that's been built up over 70 years of regulators which in some cases duplicate each other, in some cases miss areas entirely.
He welcomes the plan as the beginning of a discussion, but I don't think anyone would pretend this is the end point or something that would pass the Congress.