Senators disown McCain mortgage plan

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By Stephen Dinan

After Tuesday's debate though, Mr. Obama's campaign had said the plan wasn't new and, in fact, claimed Mr. Obama had proposed something similar weeks earlier. The McCain campaign said the charge is disingenuous.

"The night of the debate he thought this was a great idea. Why does he switch? Strictly political ambition," McCain domestic policy adviser Douglas Holtz-Eakin told MSNBC.

Part of the problem was the McCain campaign issued an incorrect fact sheet the night of the debate that said financial institutions would take a hit in the new plan. Mr. McCain did not mention that in his own public pronouncement, and by Wednesday his campaign said the fact sheet was in error.

Mr. McCain also didn't mention Mrs. Clinton or any other author in Tuesday's debate, and in fact seemed to rule out co-authors.

"It's my proposal, it's not Senator Obama's proposal, it's not President Bush's proposal," he said.

But by Thursday, McCain spokesman Brian Rogers said the plan did match what Mrs. Clinton and others had already proposed.

Mrs. Clinton last month took to the floor of the Senate to call for updated the Homeowners Loan Corp., a New Deal-era program that also bought mortgages from homeowners and resold them at market value.

But Mrs. Clinton's office said her proposal would require banks to absorb losses from the new mortgages, where Mr. McCain's plan would buy back the original mortgage, meaning the government absorbs its loss of value.

"It's offensive to suggest the new McCain plan is what Senator Clinton proposed," said Clinton spokeswoman Kathleen Strand. "She and Senator Obama are focused on helping struggling homeowners and holding bank lenders responsible. The Bush-McCain strategy to sit back and do nothing is wreaking havoc on our economy. Senator McCain's new plan calls for bailing out and rewarding irresponsible bank and mortgage lenders, while sticking taxpayers with the bill."

Mr. Rogers, the McCain spokesman, said his candidate's plan is also similar to one proposed by former Bush economic adviser R. Glenn Hubbard and Chris Mayer, both of the Columbia Business School. But a day earlier, on a conference call with reporters, Mr. Holtz-Eakin had said he was aware of but hadn't examined the Hubbard proposal.

Some have also compared Mr. McCain's plan to one proposed by the Center for American Progress, a liberal think tank. Mr. Rogers said that was not the case.

McCain has been blasted from the right and the left for his plan, with fiscal conservatives saying they used to be able to predict how he would come down on questions of spending and government intervention.

"You have John McCain who said he's going to veto every bill that contains an earmark, and then just recently said he would have supported the continuing resolution that contained thousands of earmarks. This is a guy that stood up against ethanol subsidies but then supported bailing out the automakers. And this time, this is a guy who wants to hold the line on spending, who wants to give a five-digit welfare check to millions of homeowners," said Andrew Roth, director of government affairs at the Club for Growth, a free-market advocacy group.