September 23, 2008 / 7:09 PM / 9 years ago

CORRECTED - WRAPUP 3-Obama, McCain battle over U.S. financial crisis

(Fixes spelling of Buffett, paragraph 15)

* McCain accuses Obama of failing to provide leadership

* Obama calls for reforms to curb influence of lobbyists

* McCain wants panel to oversee $700 billion bailout plan

By John Whitesides, Political Correspondent

GREEN BAY, Wis., Sept 22 (Reuters) - Barack Obama proposed reforms on Monday to rein in practices that led to the worst U.S. financial crisis since the Depression, while White House rival John McCain touted his own remedies and accused Obama of failing to provide leadership.

McCain, the Republican presidential candidate, pushed a plan he offered last week calling for an independent panel to oversee a Wall Street bailout that could cost as much as $1 trillion. He said Treasury Secretary Henry Paulson had too much power in the crisis.

“This arrangement makes me deeply uncomfortable,” McCain, an Arizona senator, told a gathering of Irish-Americans in Scranton, Pennsylvania. “When we are talking about a trillion dollars of taxpayer money, ‘trust me’ just isn’t good enough.”

Wall Street has been rocked by the worst financial crisis since the Great Depression, with global credit markets seizing up over concerns about the plummeting value of U.S. housing and securities based on home mortgages.

The Bush administration moved last week to restore calm in the markets, asking Congress to approve a plan that would enable the government to acquire up to $700 billion in home and commercial mortgages. The move aims to stabilize the firms by taking the bad assets off their books.

The crisis has dominated the campaign trail over the past week as Democrat Obama and Republican McCain tried to project leadership and outline the principles they believe should guide the process -- although both have been essentially sidelined as the bailout is negotiated.

Obama has seen a steady rise in public opinion polls during the last week, however, with most polls showing the race essentially tied or Obama with a narrow lead and the economy remaining by far the top issue.

A CNN poll released on Monday indicated more Americans think Obama would do a better job handling an economic crisis than McCain.

In the poll of 1,020 people conducted Friday through Sunday, 49 percent said Obama would display good judgment in an economic crisis, compared with 43 who said the same about McCain.

According to the poll, Obama has a 10-point lead over McCain on the question of who would better handle the economy overall.

At a campaign rally in Wisconsin, Obama said he would aim to prevent another crisis by pushing for measures to curb the influence of lobbyists, streamline and strengthen regulatory agencies, crack down on no-bid government contracts and make government more open and transparent.


“No matter what solution we finally decide on this week, it is absolutely imperative that we get to work immediately on reforming the broken politics and the broken government that allowed this to crisis to happen in the first place,” he told a crowd of about 6,000 in Green Bay.

The first-term Illinois senator said an “ethic of irresponsibility” had swept through government, and McCain -- a four-term Arizona senator and 26-year veteran of Washington who has largely favored deregulation -- was part of the problem.

“When it comes to regulatory reform, Senator McCain has fought time and time again against the common-sense rules of the road that could have prevented this crisis,” he said.

McCain called for a bipartisan board to establish criteria for which firms get government help. He suggested billionaire investor Warren Buffett -- an Obama supporter -- as a potential member, as well as former Republican presidential candidate Mitt Romney and independent New York Mayor Michael Bloomberg.

McCain said his plan would keep people from losing their homes while protecting the capital markets, and he needled Obama for failing to put forward his own suggestions.

Obama has delayed offering a detailed plan while the solution is being hammered out in Congress.

“At a time of crisis, when leadership is needed, Senator Obama has simply not provided,” McCain said. “And the truth is that we don’t have time to wait for Senator Obama’s input to act.”

The two campaigns debuted new advertisements attacking each other, with McCain portraying Obama as a product of Chicago’s corrupt machine politics and Obama highlighting his charge that McCain’s health care plan would deregulate that industry the way banking was deregulated.

Additional reporting by Ellen Wulfhorst in Pennsylvania; writing by David Alexander; editing by David Wiessler and Bill Trott

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