- The Washington Times - Tuesday, September 16, 2008

The two presidential candidates on Monday put aside their heated debate over pig lipstick and returned to the issue most dear to Americans - the economy - but neither offered any new ideas for ending the financial crisis on Wall Street.

In a dizzying day of dueling statements and rapid-response rebuttals, Sen. John McCain said his long experience in Washington makes him better suited to combat Wall Street’s greed and corruption. Sen. Barack Obama, meanwhile, blamed Republican policies for the crisis and claimed he would target aid to middle-class America most hurt by the current financial meltdown.

Yet as they spoke, evidence emerged that the economic fiasco had outgrown government intervention, and their words failed to quell a record plunge of the Dow, which apparently didn’t care that both presidential candidates openly oppose a sputtering U.S. economy.

With two of America’s oldest financial institutions crumbling amid a mortgage crisis and plummeting real estate values, the nominees faced off in a war of words, with attacks and counterattacks, each declaring that he is best able to handle the current economic upheaval.

“You know that there’s been tremendous turmoil in our financial markets in Wall Street,” Mr. McCain said to supporters in Jacksonville, Fla. “People are frightened by these events. … I think still, the fundamentals of our economy are strong, but these are still very, very difficult times, so I promise you: We will never put America in this position again. We will clean up Wall Street.”

Mr. Obama said Mr. McCain’s statement shows that the Republican is “out of touch” as he sought to tie the Arizona senator to the Bush administration.

“This country can’t afford another four years of this failed philosophy,” the Democrat said in an early morning statement. “The challenges facing our financial system today are more evidence that too many folks in Washington and on Wall Street weren’t minding the store.”

But Mr. Obama added: “I certainly don’t fault Senator McCain for these problems, but I do fault the economic philosophy he subscribes to.”

On Capitol Hill, lawmakers pointed partisan fingers, with Democrats and Republicans blaming each other for not doing enough to stabilize the shaky financial markets. Neither presidential candidate questioned the Congress that they’re part of for its oversight of the tumultuous markets.

“Failing to police lenders and neglecting to protect consumers ushered in the subprime crisis that has brought the American economy and Wall Street to their knees,” said Senate Majority Leader Harry Reid, Nevada Democrat. “This ‘anything goes’ approach to governing has resulted in lost jobs and carries an enormous price tag for the American taxpayer.”

Sen. Richard C. Shelby of Alabama, the ranking Republican on the Senate Banking Committee, said that the committee “will continue to monitor” the situations on Wall Street and that it would conduct a “thorough review of how they transpired and what the implications are for global finance, the banking system, the U.S. economy and the American taxpayer.”

Some economists questioned whether there is anything further that either candidate can propose beyond the actions that the Bush administration, the U.S. Treasury and the Federal Reserve have already taken.

“I don’t know that there is too much more that the McCain campaign could come out with that the Bush administration has not already proposed,” said economic consultant Cesar Conda, who was Vice President Dick Cheney’s chief domestic adviser.

The two candidates had been locked in weeks of seemingly petty exchanges, with Mr. McCain most recently accusing his rival of sexism for using the phrase “lipstick on a pig,” which his campaign contended was a dig at Republican running mate Sarah Palin.

Mr. Obama, meanwhile, released an ad last week showing his foe 25 years ago - with the outsized glasses in style then and clad in a now-horribly out-of-date suit - and charged that the 72-year-old doesn’t send e-mails.

But with just 50 days to go until Election Day, the two returned to the issue most voters say is their No. 1 concern: the economy.

Mr. McCain, seeking to distance himself from President Bush and his administration, put the blame for the Wall Street’s recent unraveling squarely on the federal government.

“The McCain-Palin administration will replace an outdated, patchwork quilt of regulatory oversight and bring transparency and accountability to Wall Street,” Mr. McCain said in a statement.

The Republican nominee also released a new ad, titled “Crisis,” which seemed to contradict his contention that the economy was fundamentally strong.

“Our economy in crisis. Only proven reformers John McCain and Sarah Palin can fix it. Tougher rules on Wall Street to protect your life savings. No special interest giveaways. Lower taxes to create new jobs. Offshore drilling to reduce gas prices,” the ad says.

The rapid-response team at the Obama campaign fired back quickly, charging that Mr. McCain is part of the problem.

“Today of all days, John McCain’s stubborn insistence that the ‘fundamentals of the economy are strong’ shows that he is disturbingly out of touch with what’s going in the lives of ordinary Americans,” said campaign spokesman Bill Burton. “Even as his own ads try to convince him that the economy is in crisis, apparently his 26 years in Washington have left him incapable of understanding that the policies he supports have created an historic economic crisis.”

The candidates’ economic plans are almost polar opposites of each other and, until now, have not addressed in any detail how they would restructure the government’s bailed-out mortgage lenders Fannie Mae and Freddie Mac.

Mr. McCain has proposed making the Bush tax cuts permanent, including the 35 percent top marginal income-tax rate, cutting the corporate tax rate, and keeping the capital gains tax rate for investors at 15 percent.

Mr. Obama wants to raise the top tax rate to nearly 40 percent, keep the 35 percent corporate tax rate where it is, and raise the capital gains tax on investments to 20 percent or more.

Valerie Richardson in Colorado contributed to this story, along with Don Lambro and Sean Lengell in Washington.

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