Obama: Bailout Likely To Delay Health Care, Education And Other Spending Programs

CLEARWATER, Fla. — 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."

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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.

Comments

[GoodGuysandBadGuys]

decrease the pentagon budget and there will be plenty of money.

don't put off what needs to be done because you're continuing to feed the beast that has been robbing america since it's inception.

[DocJerome]

We knew this was coming in lieu of the current crisis. There is just not enough money to fund two wars, then give financial companies one trillion dollars to feast on. JMac and the Bush cronies are engaged in white collar terrorism and in a panic, the electorate will urge congress to give them unprecedented and unfettered gratuities with taxpayer monies for their performance.

This belies the concept of free enterprise. Allow the institutions with a record of proven poor performance to fail. There should be no bailout proposal, rewarding institutions that eagerly point out to its clients the practice of outsourcing to foreign labor while at the same time, looking for a taxpayer safety blanket to coverup/pardon their failures. There must be consequences.

Unless there is a broad profit sharing proposal and total restructuring with a stark re-calibration of the financial markets, a bailout is out of the question. No socialization of private company losses. This is at it's root, unconstitutional and completely unacceptable.

[valleygent]

Senator Obama...please don't give the opposition talking points to use against you...we don't need this kind of brutal honesty from you just yet...wait until you are President for that.

[Tane]

Lou Dobbs said last night that he would vote for the first candidate to admit that the financial crisis would curtail some of their spending programs. Obama just did that. I emailed Lou Dobbs to ask if he would stand by his word and vote for Obama now. I suggest everyone do the same. You can contact him at http://loudobbs.tv.cnn.com/ .

[SENATORCALLENBOWE]

ITS POLITICS AT IT BEST :)

[DocJerome]

It's reality.

[lwfky]

And here it is- the Republican's ultimate goal. Push the U.S. so far into debt that the middle class is destroyed permanently. No health care, no education, no homes. The only option will be to join the military, so now we have our all "volunteer" army to fight McCain's perpetual war. If there truly is a God, these people are going to burn in Hell for hurting so many of their brethren!

[MaeScott]

Rev. Wright was right. Our leadership should be damned all to hell.
Flag-pin Patriotism...or terrorism...pick one.

[DanielfromLI]

This is my favorite part of this article:

"McCain said taxpayers shouldn't be "on the hook" for AIG or any other corporation. Biden also said that the government shouldn't bail out AIG. For his part, Obama at the time didn't take a position on the idea of a buyout.

"I think that in that situation, I think Joe should have waited as well," Obama told NBC. "

Looks like another instance where Obama would like to vote "present", when a real decision needed to be made- no liberal would've accepted a "wait and see" policy from the Bush administration.

[KISHAGREEN]

The operative term here is "Bush Administration". Obama's not president yet and his desire not to play politics with a national crisis is admirable.

Plus, Biden was wrong. No one likes the corporate welfare, but it's hard to argue that at least some of it is neccessary to keep us all from drowning in this mess. .

[Kindheart]

Instead of coming together and doing what is best for our country, don't you think your rhetoric is unnecessary at this time?

[KiwisCanFly]

Not at all DanielfromLI. It's called prudence.

[chuk98death]

Yeah that is EXACTLY how we got the Iraq war. You always wait and see what the specifics are before you make a decision so you do not have to go back and change your mind. it is one of the reasons why even when the GOP claim Obama has made flip-flops, he really has not made that many as opposed to McCain, especially if you judge them with the last 19th months since the race began.

If he needed to absolutely make a decision then he would but if not then wait and see what the specifics are and then decide...because obviously Biden and McCain did not consider the threat posed to regular folks if AIG went down.

[milo h minderbinder]

Personally, I'd rather hear an answer after all the facts are available and analyzed than a kneejerk reaction.

A bailout is an extraordinary step to take, it's something that should be decided on a case by case basis and should be carefully deliberated instead of just going with a gut reaction.

[gotalife]

"Obama urged Democrats to be as fiscally tough as conservative Republicans and said that the bailout was forcing a new perspective on the federal budget"

Just vote no with the cons.

The markets are fine, they are just trying to get rid of bad debt for the banks.

[kutkreata]

I was thinking the same thing. Something seems very weird about this bailout. I think that the kos may be right on this.

http://www.dailykos.com/storyonly/2008/9/22/15256/2632/465/606678

[katok]

These delays are consistent with GW's vision, thereby suggesting this latest crisis, has been casued to create this desired effect.

[jkpcguru]

Well, I'm glad he has admitted this. It shows to me the he is flexible and a realist. I have no worries about him fighting for health care and tax cuts. He will come into office with a huge mess to deal with. I want the the health care and tax cuts fight to start. Even if it takes a couple years for him to get it through. If McCain wins, we can look forward to an even worse health care system.

[ldaniel65]

He is going to get slamed for this truth, I for one rather an honest answer. Obama/Biden '08

[darthdarcy]

That's why they are doing this, anything to prevent our government serving the American people and their needs..!

It's the last big swindle hopefully, of the American Treasury, by the Bush Mafia and known associates..!

[DanielfromLI]

I don't see why all of a sudden his plan is economically unfeasible- when it was already going to increase the deficit by about $300 billion even if there was no bailout. I hope for America's sake Obama reconsiders his proposed tax hikes as they are the most detrimental to a struggling economy.

Key points: in 2005, under the Bush tax cuts, the federal government collected more revenue than ever before in history- obviously increasing taxes isn't the true way to boost revenue.

During the Bush years when corporate tax rates were lower and capital gains were reduced the government made more money than during the Clinton administration when they were higher.

The United states has the 2nd highest corporate taxes in the world after Japan- how will raising them keep jobs here?

How will taxing outsourcing convince more companies to do business here?

Or not supporting free trade in Colombia and South Korea- or exisiting treaties like NAFTA- which have done more to increase US manufacturing and exports between the US Canada and Mexico-

It just scares me that Obama doesn't know this- that we could return to a Jimmy Carter administration of high taxes and weak foreign policy for a whole four years could cause irreversible damage to our economy. If protectionism was the key to the future of our economy- it would've worked back then-

To think the government knows how to spend our money better than we do- is the illusion of the democratic party.

[ProudLiberalDemocrat]

Bush tax cuts generated false tax receipts because of home prices that have since collapsed.

And effective corporate rates in the U.S. are far below other major industrialized nations. Jobs are not leaving the U.S. because of tax rates.

Stop the lies.....

Bill Clinton raised taxes and balanced a buget to surplus, made government smaller, and real income for every American increased. George Bush cut taxes and those that received the cuts have benefited (real growth of 2%), while the rest of us are waiting for it to trickle down.

Stop the Republican lies.....Deregulation failed!!

[Kindheart]

Typical, Danielfrom LI, your way didn't work, isn't that obvious yet to you???
This bailout will have effect on our country for years to come.

[dRwOOD]

"It just scares me that Obama doesn't know this- that we could return to a Jimmy Carter administration of high taxes and weak foreign policy for a whole four years could cause irreversible damage to our economy."


Are you F*ing kidding - are you paying attention to what is going on RIGHT NOW???

idiots, the whole lot......... "pride in ignorance" never applied so well as it does right now

[DaOne]

At least we are not being told lies like this:

But Mc Cain said in an interview here with CNBC and The New York Times that he would press on with his plan to extend the B ush tax cuts for the wealthy and to cut a series of other taxes. Contrary to the warnings of fiscal analysts, he said he still believed he could do so and balance the federal budget, which was falling deeper into deficit even before the financial crisis, by the end of his first term.

"I believe we can still balance the budget," Mc Cain said. "I think that it is restraint of spending, and I think it's growth of government and the economy - and the recovery of our economy. And anything you do that would take more money from the American people who are hurting more now, I think, would be a serious mistake."

http://iht.com/articles/2008/09/22/america/campaign.php

[ManwithaParachute]

If Barack is going to delay any of his proposals because of these Wall Street crooks then my support is delayed. At this point, a third party candidate gets my vote.

Obama wants to support the bailout then he loses my vote period. My family has worked hard and pulled ourselves up from abject poverty. Doing things the right way. This is the reward......watch the crooks get bailed out and we have to forgo health care. Hell NO!

[cheryltalks]

What do you propose happen? How do you think that Americans can afford to live as extravagantly as we have knowing full well that something would crash, but just hopefully not in our life times. If this man wants to truly put our education and healthcare first - that is a first. But to withold your vote because he is speaking in truths and not "fantasy" that we can have it all is absurd. You probably were not a realist nor a strong supporter to begin with. You think McCain has anyone's interest at heart any better? Go ahead. Go on out there.

[DaOne]

You vote 3rd party and you elect McSame...better a delay than never at all.

Is that what you want?

[Tinkeraw]

Be realistic. If you, in your private home budget, was planning to say send your child to a private college, but was hit with an unexpected financial expense such as a hurricane hitting your area and causing damage to your home causing costs beyond your insurance coverage (this is a true story by the way), you adjust your budget and spending. The kid goes to a good state university, you are able to repair your home to a competitive level so that when you sell the house it is comparable with the market (remember, as an example, the insurance pays you for tile ... the cheapest tile on the market, if you want to upgrade, even slightly, that is on you).

Budgets must be flexible. Don't hold it against Obama because he has the wisdom to see that we may not be able to get everything all at once. I would rather have it phased in responsibly than empty promises or further in debt. As long as the long range goal is still there, and met.

[ManwithaParachute]

The bail out is crap. If you really want to prove free markets are good or bad you have to let it play out. Any intervention becomes the problem. Therefore Government will become the problem. Take the GOP at their word and let them choose to intervene. It becomes their mess.There is nothing that will stop this economic collapse except to take care of the economy from the bottom up. This is a consumer based economy and when the consumers cannot consume because they are not able to take care of the base needs then the economy sinks. When the economy produced "goods" we were self-sufficient and able to keep moving even through the depression.Do not kid yourselves into thinking this is merely a crisis or accident. On the contrary, this result has been predicted and neglected. The US will become a third world country and unable to climb back up because the Economic conservatives will use the failure of the bailout to justify the practical elimination of the Government for the people. It will become Government to control and constrain the people. The bailout leads to Fascist style government. In fact, fascism is here already. Barack is complicit if he choses to support this bailout. Fear-mongering is the fascist favorite tool.

The world will not end. The economic table will reset. It simply changes the scale of the haves and have nots.

[XME]

You say that now, but if NOT bailing out leads to NO ONE being able to even get money from their own bank account (it CAN happen), you'll be criticizing him for NOT backing it. Personally, I think they need to add a TON of provisions, start with way less money, and they shouldn't react as if the country will die if we don't do it by Friday. However, ALL economists are saying that something needs to be done...unless we simply prefer a 2nd Great Depression. Now, I would be upset if they let that pass with out HUGE revisions as the originial proposal is crap and would make our Constitution completely useless, and Bush has already done enough damage...seems he's trying to finish the job.