McCain Refines Plan for Homeowners
By Dan Balz
BROOKLYN -- 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 he is prepared to use the government where necessary to help ease the impact of a declining economy on working families.
In a campaign appearance with small business owners in Brooklyn, McCain also addressed the spreading economic downturn with proposals to help families facing foreclosure restructure their mortgages and to give workers who have lost their jobs more flexibility and incentives to seek retraining and a speedier return to the workforce.
McCain plans a more comprehensive economic speech for next week, but came here today to blunt criticism from Democratic rivals Barack Obama and Hillary Clinton that he is insensitive to the plight of ordinary Americans.
"Let me make it clear that 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.
McCain noted that Americans face multiple economic pressures from the economic downturn, from declining home values and threats of foreclosure to the impact of rising gasoline prices on family budgets to fears that a worsening economic situation will throw more people out of work.
On the housing crisis, McCain once again made clear his opposition to broad federal intervention or bailouts. He said he continues to oppose helping those who engaged in and 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 federal government and, if they qualified for assistance, emerge with a restructured mortgage that would allow them to stay in their homes.
"There is nothing more important than keeping alive the American dream to own your home, and priority number one is to keep well meaning, deserving home owners who are facing foreclosure in their homes," he said.
There are some limitations. Those families who can afford the terms of their current, albeit higher, mortgage would not qualify. And the assistance would only cover primary residences and only go to families that can truly afford the new mortgage.
McCain economic adviser Douglas Holtz-Eakin said the housing assistance would reach an estimated 200,000 to 400,000 families, with an estimated cost of $3 billion to $10 billion. He said McCain's goal is to use federal money only for those families "who really need help." He also called McCain's approach superior to some Democratic measures because it places primary emphasis on the individuals in need, rather than the lenders.
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.
For displaced workers, McCain proposed restructuring current job training programs. Repeating past criticism that federal programs are duplicative and inefficient, McCain said he favored changes that would give workers the ability to build up assets in an account that could be used to pay for retraining programs, offset lost income or even provide bridge payments to continue health insurance. The plan also aims to giving older workers who lose their jobs additional benefits.
McCain touched briefly on energy issues, calling on Americans to look for ways to cut back on their consumption and recommending a halt to the purchase of additional oil for the nation's Strategic Petroleum Reserve.
Sen. Hillary Rodham Clinton, who had ridiculed McCain's earlier economic speech, greeted his latest proposals with fresh criticism, describing them as "half-measures" that are inadequate to the scope of the problem.
"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."
McCain spoke at a small window replacement company in Brooklyn and was introduced by New York Mayor Michael Bloomberg, who recently shelved consideration of an independent campaign for the White House.
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