Obama supports 'broad authority' for Treasury Department
Barack Obama today said he supported giving the US Treasury Department “broad authority” to deal with the economic crisis.
But his Republican presidential rival John McCain said the Federal Reserve, the US central bank, should stop bailing out failed financial institutions.
The US presidential candidates were speaking as US authorities announced plans for a substantial rescue plan which will help relieve banks of their unwanted mortgage-backed assets which have paralysed world financial markets.
Both men seemed to agree that leaders should put aside partisan differences and work together to solve the crisis.
Speaking to reporters in Florida, Mr Obama said any recovery plan should be guided by not rewarding reckless business leaders.
“What we have to do is make sure taxpayer money is not being used to bail out bad decisions,” he said.
He refused to put a price tag on a bailout he could support, but said it would not bar him from pushing for middle-class tax cuts that have been central to his campaign.
“I think now more than ever we have to have the broad-based middle-class tax cuts,” he said.
“We have an immediate emergency situation in the capital markets and it is important to provide the Treasury and the Fed with broad authority to make sure the credit markets work, that bills are paid, that payrolls are made, that there’s liquidity in the system.
“We have an institutional problem that has to do with a regulatory system that’s inadequate to the new global marketplace.”
The 47-year-old Illinois senator blamed the crisis on what he said were failed economic policies that Mr McCain would continue, while saying that “partisan wrangling” should be put aside while US authorities dealt with the crisis.
“We can’t steer ourselves out of the crisis by going in the same direction. That’s what this election is all about,” he said.
But he went on: “I think it’s critical at this point that the markets and the public have confidence that their work will be unimpeded by partisan wrangling, that leaders in both parties work in concert to solve the problems at hand.”
Meanwhile, Mr McCain said the US central bank must get back to “its core business of responsibly managing our money supply and inflation”. He laid out several recommendations for stabilising markets in the financial crisis that has rocked Wall Street and taken over the presidential campaign.
He made little mention of the proposal being crafted by Treasury Secretary Hank Paulson that could amount to a one trillion dollar taxpayer bailout of the mortgage industry.
Instead, he said “any action should be designed to keep people in their homes and safeguard the life savings of all Americans”.
“A strong dollar will reduce energy and food prices,” Mr McCain said.
“It will stimulate sustainable economic growth and get this economy moving again.”
The 72-year-old Arizona senator again criticised Mr Obama for ties to US mortgage giants Freddie Mac and Fannie Mae and for advocating tax increases which Mr McCain said would “turn a recession into a depression”.
He also called Securities and Exchange Commission chairman Chris Cox a “good man” but reiterated his view that Mr Cox should step down or be fired, saying there needed to be greater accountability in Washington.
