It was the first question of the evening: how to turn the economy around and help those ensnared in the housing crisis. And in John McCain's first answer, he bragged about a bold new proposal he would implement as president -- that Obama already fought for in the recently passed bailout bill.
"You know that home values have, retirees, continues to decline," McCain started, somewhat unsteadily. "And people are no longer able to afford their mortgage payments. As president of the United States, Allen, I would order the Secretary of Treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes at the diminished values of those homes and let people make those -- be able to make those payments and stay in their homes. Is it expensive? Yes. But we all know, my friends, until we stabilize home values in America we're never going to start turning around and creating jobs and fixing our economy. and we've got to give some trust and confidence back to America. I know how to do that, my friends. And it's my proposal, not Senator Obama's proposal or President Bush's proposal."
It took awhile (by rapid response standards), but by the end of the debate, Obama campaign was all over the claim.
National press secretary Bill Burton noted that the "rescue bill includes authority for the Treasury Department to buy 'residential or commercial mortgages.'" Moreover, he noted, Obama has made that proposal twice previously.
At a Sept. 23 press conference, Obama said: "For example, we should consider giving the government the authority to purchase mortgages directly instead of simply purchasing mortgage- backed securities. In the past, such an approach has allowed taxpayers to profit as the housing market recovered. This is not simply a question of looking out for homeowners; it's doubtful that the economy as a whole can recover without the restoration of our housing sector, including a rebound in the home values that have suffered dramatically in recent months."
And in an Oct. 1 statement, Obama repeated the idea. "We also must do more than this rescue package does to help homeowners stay in their homes. I will continue to advocate bankruptcy reforms to help families stay in their homes and encourage Treasury to study the option of buying individual mortgages like we did successfully in the 1930s," he said.
Meanwhile on Fox News, conservative pundit Bill Kristol wasn't too impressed with McCain's jumping on the mortgage buying bandwagon.
"We will hear much more about this $300 billion mortgage plan of the next day or two," Kristol said. "It might end up hurting McCain. It is a pretty chaotic campaign. If you were going to do this, you [would need] lay the groundwork for it."
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