McCain, Obama tangle over Wall Street crisis

BLAINE, Minnesota (Reuters) - Republican nominee John McCain, seeking a lift in the U.S. presidential race, proposed stricter Wall Street regulation on Friday and assailed Democrat Barack Obama for not offering a plan to deal with the financial crisis.

While McCain outlined a package of proposals, Obama took a more cautious approach as they both jockeyed for position in the November 4 election.

Obama, who regained a slight lead over McCain in public opinion polls this week, held back for now from offering his own plan to change Wall Street’s practices, saying he wanted the Federal Reserve and U.S. Treasury to continue their work “unimpeded by partisan wrangling.”

Instead he met in Florida with a group of economic experts that included several from President Bill Clinton’s administration in the 1990s.

At a rally Blaine, Minnesota, McCain seized on Obama’s failure to offer a plan. “This morning I laid out my plan to solve these problems and grow our economy. About the same time Sen. Obama said he isn’t going to offer a plan,” McCain said.

Obama supported efforts by the Fed and the Treasury to work out a financial rescue package and said he would like to see the government adopt an emergency economic plan to help working families cope with rising gasoline and food prices.

Asked why he was not offering a plan of his own to address Wall Street’s meltdown, Obama told reporters it has to be done in an “intelligent, systematic, thoughtful fashion.”

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“I’m much less interested at this point in scoring political points than I am in making sure that we have a structure in place that is sound and is actually going to work,” he said.

Democrats ridiculed McCain this week for saying that U.S. economic fundamentals were sound as powerful financial institutions teetered on the brink of collapse.

Obama said McCain was “a little panicked right now” as he tried to deal with the growing economic crisis.

“At this point he seems to be willing to say anything or do anything,” he said.

Speaking in Green Bay, Wisconsin, McCain said his plan would restore public confidence in the financial system.

He said he would offer reforms to prevent financial firms from concealing bad practices because “an inexcusable lack of financial transparency allowed Wall Street firms to engage in reckless behavior that padded their profits and fattened executive bonuses when times were good.”

Republican presidential nominee Senator John McCain (R-AZ) speaks at the Key Air Hangar at the Anoka County Blaine Airport in Blaine, Minnesota, September 19, 2008. REUTERS/Eric Miller

McCain also said the Federal Reserve needed to stop bailing out troubled companies and instead concentrate on strengthening the U.S. dollar.

However, McCain economic adviser Doug Holtz-Eakin said McCain backed efforts by President George W. Bush and the U.S. Congress to formulate a rescue.

McCain “welcomes all proposals that responsibly address this crisis,” he said.

The Arizona senator, has opposed regulation of the private sector for most of his long political career but in recent days he has emphasized the need for more oversight of the financial industry.


Obama and McCain have engaged in a pitched battle in the fallout over Wall Street, accusing each other of sharing the blame for the crisis.

Opinion polls have moved in favor of Obama, erasing a narrow advantage for McCain after the Republican National Convention.

McCain kept up the fight on Friday, lashing out at Obama for his ties to James Johnson, a former CEO of Fannie Mae.

Fannie Mae and Freddie Mac are two mortgage giants that the government had to bail out earlier this month.

Johnson briefly led Obama’s vice presidential search but resigned amid accusations he received private loans at below-market rates from Countrywide Financial, a company involved in the U.S. subprime mortgage crisis.

“We’ve heard a lot of words from Sen. Obama over the course of this campaign, but maybe just this once he could spare us the lectures, and admit to his own poor judgment in contributing to these problems,” McCain said.

Illinois Sen. Obama has accused McCain of relying on Washington lobbyists to run his presidential campaign, and says if he wants to shake up “the old boys’ network,” all he needs to do is call a staff meeting.

The Obama campaign issued an e-mail citing newspaper articles that reported McCain’s campaign manager, ex-lobbyist Rick Davis, had led efforts to fight off regulations of Fannie Mae and Freddie Mac.

Additional reporting by John Whitesides, writing by Steve Holland, editing by David Alexander and Chris Wilson