McCain Revises Proposals for Families in Economic Crisis

By Dan Balz
Washington Post Staff Writer
Friday, April 11, 2008

NEW YORK, April 10 -- Two weeks after drawing criticism for saying he favored only a limited federal role to help deal with the home mortgage crisis, Republican presidential candidate John McCain sought to assure Americans that he is prepared to use the government where necessary to help ease the impact on working families of a declining economy.

In a campaign appearance Thursday with small-business owners in Brooklyn, Sen. McCain (R-Ariz.) also addressed the economic downturn with proposals to help families facing foreclosure restructure their mortgages and to give workers who have lost jobs more flexibility and incentives to seek retraining and a speedier return to the workforce.

McCain plans a more comprehensive economic speech next week, but he came here to blunt criticism from his Democratic rivals, Sens. Barack Obama (Ill.) and Hillary Rodham Clinton (N.Y.), that he is insensitive to the plight of ordinary Americans.

"Let me make it clear that in these challenging times, I am committed to using all the resources of this government and great nation to create opportunity and make sure that every deserving American has a good job and can achieve their American dream," he said.

On the housing crisis, McCain again made clear his opposition to broad federal intervention. He said he still opposes helping those who fed the speculative frenzy in the housing and credit markets. "Tax breaks for builders, funds to purchase homes in foreclosure and tax credits that are not targeted to where the need is greatest do not constitute the federal help that is warranted," he said.

Instead, McCain proposed a federal program that would require individual homeowners to seek help from the government and, if they qualified, enable them to restructure mortgages and stay in their homes. Families who can afford their current, albeit higher, mortgage would not qualify, and the aid would cover only primary residences.

McCain also demanded a Justice Department investigation to look into criminal wrongdoing in both the home mortgage industry and in the securitized credit instruments that were created to fuel the speculative bubble in the housing market.

Clinton, who had ridiculed McCain's earlier economic speech, described his latest proposals as "half-measures."

"Apparently Senator McCain got the message: letting the phone simply ring and ring is not the way to respond to economic crises," she said in a statement. "So now he's changed positions and is finally responding to a housing crisis that has been going on for months."

At a campaign stop in Gary, Ind., Obama also dismissed McCain's new approach. "Better late than never," Obama said. "But don't expect any real answers. Don't expect it to actually help struggling families. Because Senator McCain's solution to the housing crisis seems a lot like the George Bush solution, which is to sit by, and hope it passes by, while families face foreclosure and watch their home prices decline."

Staff writer Perry Bacon Jr. contributed to this report.

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