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Obama calls for financial regulations, stimulus
2008-03-27
Democratic presidential candidate Barack Obama proposed greater government regulation of the U.S. financial system and a new $30 billion economic stimulus plan on Thursday in response to the housing crisis. Both Obama and his Democratic rival, New York Sen. Hillary Clinton, accused Republican candidate John McCain of supporting little to ease the current credit and housing problems, which drew a quick response from the McCain camp. Obama declared that under both Republican and Democratic administrations -- a slap at Clinton's husband, 1990s Democratic President Bill Clinton -- an era of financial deregulation had created conditions that pushed the U.S. economy to the brink of a recession. "It is time for the federal government to revamp the regulatory framework dealing with our financial markets," the Illinois senator said in a wide-ranging speech on the economy. In a month when the U.S. Federal Reserve helped shore up the ailing financial system and financed the takeover of Bear Stearns, a major Wall Street investment firm, Obama said the new regulations should include liquidity and capital requirements for financial institutions. "If you can borrow from the government, you should be subject to government oversight and supervision," he said. He proposed a $30 billion stimulus plan that would provide relief to areas hardest hit by the housing crisis and an extension of unemployment insurance for those out of work. "If we can extend a hand to banks on Wall Street when they get into trouble, we can extend a hand to Americans who are struggling through no fault of their own," Obama said to applause. Obama, who would be the first black U.S. president, and Clinton are in a heated battle for the Democratic nomination to face McCain, an Arizona senator, in the November presidential election. PRINCIPLES AND PROBLEMS The Clinton campaign issued a statement accusing Obama of outlining vague proposals. "Presidents have to do more than announce principles. They have to solve problems," said Clinton campaign policy director Neera Tanden. Clinton turned her fire on McCain in an economic address in Raleigh, North Carolina, saying McCain has backed "virtually nothing" to ease the current crisis. While describing McCain as "a friend of mine," she said: "He'd rather ignore the credit crisis and mortgage crisis -- or blame middle-class families instead of offering solutions on their behalf." McCain, who gave an economic address on Tuesday, said he was "committed to considering any and all proposals" to help homeowners but that he opposed a "multibillion-dollar bailout for big banks and speculators." Former Hewlett-Packard chief executive officer Carly Fiorina, who is an economic adviser to McCain, accused Obama and Clinton of "politics of the worst sort." "Both of them are rather vague on specifics but they do borrow from the principles John McCain has already laid out," Fiorina said. Obama was introduced by New York Mayor Michael Bloomberg, who flirted with his own presidential bid and pointedly noted that he had not endorsed a presidential candidate. Clinton, who would be the first woman president, called last week for a $30 billion emergency housing fund to help ease the housing crisis. An estimated 4 million American homeowners are in danger of losing their houses. A two-year, $168 billion stimulus aimed at propping up the U.S. economy is about to take effect, with $152 billion to be doled out this year. (Additional reporting by Jeff Mason, Deborah Charles and John Whitesides; Writing by Steve Holland; Editing by Bill Trott) (To read more about the U.S. political campaign, visit Reuters "Tales from the Trail: 2008" online at http://blogs.reuters.com/trail08/
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