Obama says Wall St bailout must protect Main St

Sep 23, 2008


Associated Press

Democrat Barack Obama said Tuesday any plan to rescue Wall Street from its financial woes must ensure that taxpayers are reimbursed and corporate executives are not further enriched for mismanagement.

The Democratic presidential candidate challenged President Bush to cooperate on a rescue plan embodying those principles and drop what Obama characterized as Bush's "my way or the highway" attitude toward the proposed $700 billion bailout. "The president's stubborn inflexibility is both unacceptable and disturbingly familiar," he said.

The Illinois senator added that his proposed middle-class tax cuts remain "absolutely necessary" despite the economic turbulence. He said they would put money in the pockets of working families at a time when the economy might be worsening.

Obama outlined several principles that he said should be included in the bailout to ensure that troubled financial firms and their executives don't take advantage of taxpayers.

Companies that take financial aid from the government must slash their executives' salaries, he said. Taxpayers must be treated like investors who can share in any Wall Street recovery, perhaps with an ownership stake in the companies that are bailed out, and a new fee on financial services should be created to repay the government aid.

"This plan cannot be a welfare program for Wall Street executives," he said at a news conference.

Decisions on how to spend that $700 billion cannot be left solely in the hands of the Treasury secretary, Obama added. An independent, bipartisan board should "provide oversight and accountability at every step of the way."

Obama stopped short of flatly saying he would vote against the bailout if it doesn't address his concerns. If the proposal falls short, he said, "I will strongly recommend ... that we go back to the drawing board."

Obama repeated his criticism of Republican John McCain's statement last week that the fundamentals of the economy are sound.

"I don't think, actually, the fundamentals of our economy are where they need to be," Obama said. "We've got a leaky boat. We've got to make sure we get that boat into harbor and then we have to do a lot of repairs."

McCain has also called for more oversight of the bailout plan and restrictions on executive pay. His campaign accused Obama of "simply following in John McCain's footsteps. ... Again, Barack Obama has shown indecision and a lack of leadership at a time when the American people need certainty," said McCain spokesman Tucker Bounds.

But Obama laid out similar requirements on Friday. His latest comments added detail but weren't fundamentally new.

Earlier Tuesday, in an interview on "Today," Obama had said the huge expense of a Wall Street bailout might require a "phase in" of the programs he has promised, including tax cuts.

But speaking to reporters in Florida, where he later began preparing for Friday's debate, Obama said he remains committed to addressing needs in health care, education and energy.

He said he has outlined ways of paying for those programs that may not be affected by the Wall Street bailout and that they would help reduce economic turmoil.

"When it comes to the middle-class tax cuts ... that is something that I believe is absolutely necessary to strengthen an economy that is going to be sliding, probably, into a deeper recession," Obama said.

In a disagreement within the campaign, Obama running mate Joe Biden said in an interview broadcast Monday that he would not have allowed an Obama ad that mocked McCain as an out-of-touch, out-of-date computer illiterate, calling the TV spot "terrible." Hours later, Biden issued a statement backing off that criticism and saying that he had seen the ad for the first time and found nothing "intentionally personal" in its criticism.

"Having now reviewed the ad, it is even more clear to me that given the disgraceful tenor of Sen. McCain's ads and their persistent falsehoods, his campaign is in no position to criticize, especially when they continue to distort Barack's votes on an issue as personal as keeping kids safe from sexual predators," Biden said.

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