Just as they did the night before at their second presidential debate, the candidates remained focused on pocketbook issues, with McCain seeking distance from President Bush by pushing a plan to buy up bad mortgages, and with Obama hammering his rival as a successor to the incumbent Republican administration.
First in Pennsylvania, then in Ohio and Wisconsin, McCain repeated his argument from Tuesday’s debate that Obama lacks the record to back up his promises to change Washington. McCain offered more details of a plan, which he first mentioned at the debate, ordering the federal government to spend $300 billion to rescue homeowners – an idea that Obama opposed Wednesday as a burden on taxpayers.
“We must go to the heart of the problem, and right now that problem is a housing crisis,” McCain said in Bethlehem, Pa. “The United States government will purchase mortgages directly from homeowners and mortgage services, and replace them with manageable mortgages. The dream of owning a home should not be crushed under the weight of a bad mortgage. The moment requires that government act – and as president I intend to act, quickly and decisively.”
At an afternoon rally here, Obama repeated his refrain from the debate, criticizing McCain for saying that health care was a responsibility and not a right, and framing the Republican’s health care plan as an empty promise. Obama also reminded supporters of a McCain’s adviser’s remark last week about the need for the GOP nominee to shift attention away from the economy or risk losing the election.
“Well I’ve got news for John McCain,” Obama said. “This isn’t about losing a campaign – this is about Americans who are losing their jobs, Americans who are losing their homes, Americans who are losing their life savings. I can take four more weeks of John McCain’s attacks, but American people can’t take four more years of John McCain’s George Bush policies.”
The back-and-forth reflected the tense dynamic of the race.
Trailing in the polls with less than four weeks until Election Day, McCain aimed to seize voters’ attention with a pledge to rescue homeowners, and spoke in Pennsylvania to a crowd that responded with shouts of "Nobama" and "liar." Coming off a second debate that seemed to do little to erode his lead, Obama hit back at McCain on health care and the economy, but also struck a sunny disposition under rain clouds in Indiana, saying “I’m here today to tell you that there are better days ahead.”
The most pointed and personal remark Wednesday came from an unexpected source—Cindy McCain, who also showed her disregard for Obama a day earlier when she said Obama was waging “the dirtiest campaign in American history.”
“The day that Sen. Obama cast a vote to not to fund my son when he was serving sent a cold chill through my body let me tell you,” she said in introducing the GOP ticket in Pennsylvania. “I would suggest Sen. Obama change shoes with me for just one day. I suggest he take a day and go watch our men and women deploying.”
The McCains have both largely avoided discussing the military service of their two sons during the campaign. Jimmy McCain, the younger of the pair, is a Marine who has already served a tour in Iraq. His brother, Jack, is at the Naval Academy.
At the same rally, Bill Platt, the Lehigh County Republican chairman who warmed up the crowd of 8,500, referred to Obama twice as “Barack Hussein Obama.” The McCain campaign later issued a statement saying it does not condone “this inappropriate rhetoric whih distracts from the real questions of judgment, character, and experience that voters will base their decisions on this November.”
McCain’s mortgage plan, introduced at Tuesday’s debate, provided a fresh dividing line between the presidential nominees.
The McCain plan, which the campaign says carries a price tag of $300 billion, would have the government buy mortgages directly from distressed homeowners. Senior adviser Douglas Holtz-Eakin said the federal government would retire the existing loan, then have the Federal Housing Administration issue a 30-year, fixed-rate mortgage “at a manageable interest rate” and backed by the government.
The plan would not require new legislation but rather rely on existing powers, some just recently passed by Congress, he said.
A landmark housing bill that Bush signed into law in late July gave the Federal Housing Administration the authority to refinance up to $300 billion worth of mortgages. McCain’s plan combines that power with the authority of Freddie Mac and Fannie Mae to purchase loans, Holtz-Eakin said.
Moreover, the massive $700 billion financial markets bailout package just passed by Congress also grants the Treasury Department to directly purchase mortgages, but Holtz-Eakin said he isn’t sure whether any of the $700 billion should be used for McCain’s initiative.
Details provided to reporters Wednesday made one thing clear: Taxpayers would directly pick up the tab for the difference in cost between a homeowner’s old, too-expensive mortgage and the cheaper one provided by the government.
Members of Congress, led by House Financial Services Chairman Barney Frank (D-Mass.) specifically avoided that element when they passed the landmark housing bill, which became law July 31 and took effect Oct. 1.
The McCain campaign claims that the initiative would help keep struggling homeowners in their houses, lower mortgage rates to just above 5 percent and stabilize housing prices. That, in turn, would stabilize the value of the now-toxic mortgage-backed securities and other housing-related derivatives “that have been plaguing the valuation of balance sheets in the financial sector,” Holtz-Eakin said.
The Obama campaign, in a statement issued Wednesday afternoon, said the plan was “even more costly and out-of-touch than we ever imagined.”
“John McCain wants the government to massively overpay for mortgages in a plan that would guarantee taxpayers lose money, and put them at risk of losing even more if home values don’t recover,” said Obama economic adviser Jason Furman. “The biggest beneficiaries of this plan will be the same financial institutions that got us into this mess, some of whom even committed fraud.”
Victoria McGrane contributed to this report.