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Candidates Weigh In On Bailout Proposal

STEVE INSKEEP, host:

It's Morning Edition from NPR News. I'm Steve Inskeep.

LINDA WERTHEIMER, host:

And I'm Linda Wertheimer. America's next president will have to live with the consequences of whatever rescue is extended to the nation's financial system. The two men who want the job are offering some suggestions about how that rescue might be structured. NPR's Scott Horsley reports.

SCOTT HORSLEY: Republican presidential hopeful John McCain says the Wall Street rescue plan floated by the Bush administration is a burden costing $10,000 for every American family. But expensive as the proposal is, McCain says Congress has no choice but to act.

Senator JOHN MCCAIN (Republican, Arizona; Republican Presidential Nominee): If we don't, credit will dry up with devastating consequences for our economy, people will no longer be able to buy homes, and their life savings will be at stake.

HORSLEY: At a news conference in Michigan yesterday, McCain suggested a number of changes to the rescue plan put forward by the White House, starting with increased accountability.

Senator MCCAIN: We won't solve a problem caused by poor oversight with a plan that has no oversight.

HORSLEY: McCain suggested a bipartisan panel to monitor the Treasury secretary as he buys troubled assets. McCain also called for a $400,000 cap on the salaries of Wall Street executives who unload those assets. He says no company that accepts government help should pay its CEO more than the president of the United States.

Senator MCCAIN: It's wrong to ask teachers, farmers, small business owners to fill the gas tanks of the helicopters of Wall Street tycoons.

HORLEY: Democratic presidential nominee Barack Obama proposed similar conditions during a news conference in Florida. Like McCain, Obama supports bipartisan oversight and limits on CEO pay. He also says taxpayers who finance the rescue plan should be treated like investors with a chance to make their money back.

Senator BARACK OBAMA (Democrat, Illinois; Democratic Presidential Nominee): We can ask taxpayers to make an investment in the stability of our economy, but we cannot ask them to hand their money over to Wall Street without some expectation of being made whole.

HORSLEY: So far, the two candidates are pretty much in agreement, but Obama adds one more requirement that McCain does not. The Illinois senator says any rescue plan for Wall Street should also include help for families who are struggling to make their monthly mortgage payments.

Senator OBAMA: 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.

HORSLEY: The Bush administration has resisted adding mortgage relief to the rescue package, but Obama insists this is not a case where the president can say my way or the highway.

Senator OBAMA: If we don't get this right then not only are we going to have some immediate problems, but the next administration is not going to have the resources or the capacity to deal with other emergencies that may come up. And so it's critical from my perspective to make sure that this is done properly.

HORSLEY: Both candidates were asked if the 12-figure cost of the rescue might force them to scrap some of the initiatives they've campaigned on. Both said no. McCain is sticking with his plan to extend President Bush's tax cuts and to reduce the income tax rate for corporations.

Senator MCCAIN: The way out of this is to grow our economy. Cut spending, keep taxes low, make sure that there are incentives in place for jobs and businesses to grow and flourish.

HORSLEY: Obama admits he'll have to take economic conditions into account, but insists he won't abandon his big ticket plans for health care, alternative energy, or a middle-class tax cut.

Senator OBAMA: We are going to have to make sure that ordinary folks have money in their pockets, that they are able to pay gas and food costs, that retail sales are bolstered. And so I think that it is important for us to make sure that we are shoring up the economy.

HORSLEY: Both candidates say they plan to stay personally involved in the rescue talks even as they're busy campaigning for a job that just got even harder. Scott Horsley, NPR News. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.