(Reuters) - The U.S. presidential candidates Republican Sen. John McCain and Democratic Sen. Barack Obama on Sunday called for oversight of the Bush administration’s $700 billion bailout plan for rescuing financial markets.
The plan’s centerpiece would permit the Treasury to purchase bad mortgage-related debt to try to calm the worst financial storm since the Great Depression. The package would raise the government’s debt ceiling to $11.3 trillion.
U.S. Treasury Secretary Henry Paulson defends the rescue package as painful and costly, but necessary to stabilize a financial system that has all but ground to a halt.
The candidates commented on the package in separate interviews on CNBC, the financial cable TV channel.
“We can set up a system where there’s an independent overseer, maybe the chairman of the Federal Reserve Bank and the Democrats and the Republicans each appoint somebody to oversee the system. A second principle that we have to have is that the taxpayers have to share in the upside of this process. If we are buying up assets and are eventually selling them, we want to make sure that it’s structured in a way that taxpayers aren’t left holding the bag and it ends up costing a lot more than it should.”
“I would certainly want to make sure that Paulson was involved in the transition. That doesn’t necessarily mean that he’d end up being the Secretary Treasury, but I think it’s important for us to make sure that those who are currently in charge when it comes to the financial crisis and defense and intelligence, that they are deeply involved in the transition process.”
“Obviously the rescue is absolutely called for. But I have focused my attention on two things. One is that I respect and admire Secretary Paulson, but as far as I can ... tell, we’re placing all those responsibilities in the hands of one person. I think we need to appoint an oversight board of the most respected people in America, such as maybe Warren Buffett, who’s a Obama supporter; Mitt Romney, Mike Bloomberg, so that there can be some kind of oversight of, instead of just putting all this responsibility on a person who may be gone in four months.”
“The second thing is, this CEO executive compensation. I notice at Lehman, aren’t bailed out but went bankrupt, that some $2.5 billion in compensation. If they’re bankrupt, where did they get that? But the major point is that no CEO of any corporation or business that is bailed out by us, that is rescued by American tax dollars, should receive any more than the highest paid person in the federal government.”