Obama Has No Solutions; McCain Can Be Our 21st Century Roosevelt

Yes, this is not an Obama-bashing post. Those are very important and certainly more exciting. But this post comes as a result of my being in the car on late Friday afternoon and hearing several experts say that at least John McCain has offered a plan, and that his is a plan that goes to the core issue that has caused our immense financial crisis. Here’s a sneak peek (read all below the fold):

It’s a simple idea. Take some of the money that Congress has already committed to fixing our financial system and use it to give millions of homeowners a new mortgage and a fresh start. No default. No bankruptcy. No foreclosure. No deteriorating neighborhoods. The United States government will support the refinancing of distressed mortgages for homeowners and replace them with manageable mortgages.

Franklin Roosevelt tried many solutions to the Great Depression. Some failed. Some worked brilliantly. The thing is: He had a chance to try and fail. And he TOOK CHANCES. John McCain is willing to stick his neck out and offer a constructive idea that would restore some liquidity and help heal this monstrous mess.

BELOW: McCain’s Saturday radio address (embargoed until 6 a.m. ET), and below that is a report on a telephone conference on The American Homeownership Resurgence Plan (explained below).

Repeat that name — The American Homeownership Resurgence Plan — and tell your neighbors, relatives and friends about John McCain’s plan that deserves, at the least, our consideration. Tell people that not all of the details — obviously — are worked out, but that it is a great start.

Tell people that Obama, as usual, has only lofty words, whereas John McCain is offering a real plan. Barack Obama is ridiculing McCain’s plan, but offers NO substitutes. All Obama has are rhetoric and ridicule. Those are not requisite abilities for a great president in a time of crisis. We need a leader who is willing to risk by proposing a daring plan.

FIRST, the Saturday Radio Address:

DOWNLOAD THE AUDIO FILE HERE (MP3).

Good morning. This is John McCain, speaking to you at the end of another week filled with troubling news about our economy. On Tuesday, Americans also had a chance to hear my opponent and me debate our very different plans to meet the crisis.

We’ve had two debates now, with a third coming this Wednesday night. And I can’t shake the impression that Barack Obama is trying so hard to exploit America’s financial crisis that he hasn’t really focused on how to solve it. He keeps talking about the past, too – although in a very selective way. He leaves out certain details, like the part about how he was taking campaign money from the same executives of Fannie Mae and Freddie Mac who were causing America’s financial crisis.

At the time, I was the one who called for tighter restrictions on Fannie Mae and Freddie Mac that could have helped prevent this crisis from happening in the first place. Senator Obama was silent on the regulation of Fannie Mae and Freddie Mac, and his Democratic allies in Congress opposed every effort to rein them in. But that doesn’t prevent him from talking now as if he’d seen and warned about the coming crisis all along – like some voice in the wilderness who went unheeded. Far from warning executives from Fannie and Freddie about their reckless conduct, he not only took their money but added them to his team as advisers.

As I said in Tuesday’s debate, in this time of crisis we must go to the heart of the problem, and right now that problem is a housing crisis. Under my orders, as president, the Secretary of the Treasury will carry out a Homeownership Resurgence Plan.

It’s a simple idea. Take some of the money that Congress has already committed to fixing our financial system and use it to give millions of homeowners a new mortgage and a fresh start. No default. No bankruptcy. No foreclosure. No deteriorating neighborhoods. The United States government will support the refinancing of distressed mortgages for homeowners and replace them with manageable mortgages.

It’s critical that we stabilize mortgages, or else the housing market won’t stabilize and homeowners across our country face troubles even greater than they face now. The housing market faces distortion by a glut of low-priced, foreclosed homes. And this would lead to a crash in the value of the number one asset of a majority of Americans. With so much on the line, the moment requires that government act – and as president I intend to act, quickly and decisively.

As we help homeowners to avoid the worst, moreover, we must also act to protect investors – especially those relying on their investments for retirement. Current rules mandate that investors must begin to sell off their IRAs and 401Ks when they reach 70 and one half. Those rules should be suspended, so that investors aren’t forced to sell their stocks at just the time when the market is hurting the most.

The response from Senator Obama to my Homeownership Resurgence Plan was typical of his response to the entire crisis. First, Senator Obama tried to claim that it was really his idea. But if anyone believed that claim, they didn’t believe it for long because the very next day Senator Obama and his campaign attacked my plan to stabilize mortgages. He claimed that the cost of the plan would place a burden to taxpayers – this from the same guy who plans to increase federal spending by 860 billion dollars. In reality, the money will come from funds already committed under the rescue package passed by Congress. The funds aren’t new, but the priorities will be when we put the financial strength of our government back on the side of working families.

My fellow Americans, Washington is on the wrong track, and even greater financial troubles lay ahead if we don’t act quickly. The tax-and-spend policies of Barack Obama will only make matters worse. But if you give me the chance, I’m going to set it right. You don’t have to hope that things will change when you vote for me. You know things will change, because I’ve been fighting for change in Washington my whole career. I’ve been fighting for you my whole life. That’s what I’m going to do as President of the United States. Fight for you and put the government back on the side of the people.

Thanks for listening.

NOW, the McCain-Palin Campaign Conference Call On The American Homeownership Resurgence Plan

(I wasn’t going to print this because our blog doesn’t reprint McCain/Palin press releases, but since we have such a crisis on our hands, I think it’s time not to worry about looking too partisan, and instead provide what a courageous presidential candidate has offered as a REAL solution instead of just lots of talk and empty promises based on a paper-thin resume without the real experience needed to do the job.)

“Senator McCain last night announced his initiative, the McCain Resurgence Plan, that has four very straightforward goals. Goal number one is to provide direct help to struggling homeowners, making sure they can stay in their homes with a manageable mortgage, avoid foreclosures and the damaging impact that has on neighborhoods and property values in that area. It would also, in the process of refinancing, help them with their financial situation, and as a result, give some stability to the household spending in the overall economy.” — Doug Holtz-Eakin, Senior Policy Adviser

ARLINGTON, VA — Today, the McCain-Palin campaign held a press conference call with Doug Holtz-Eakin, McCain-Palin senior policy adviser, to discuss John McCain’s American Homeownership Resurgence Plan:

Doug Holtz-Eakin: “Senator McCain last night announced his initiative, the McCain Resurgence Plan, that has four very straightforward goals. Goal number one is to provide direct help to struggling homeowners making sure they can stay in their homes with a manageable mortgage, avoid foreclosures and the damaging impact that has on neighborhoods and property values in that area. It would also, in the process of refinancing, help them with their financial situation and, as a result, give some stability to the household spending in the overall economy.

“Second thing is it would provide, to the mortgage market, lower interest rates. If history was a guide, we’d see a spread of about 160 basis points above government interest rates to the mortgage market. That would put interest rates in the low five percent. Mortgage rates are above that right now. Providing this kind of financing would stabilize housing values and obviously take some stress off the pressures downward in the economy. Having a stabilized housing market would, in turn, combine with the purchase of these mortgages to stabilize the values that are underneath mortgage-backed securities and all the housing-related derivatives that have been plaguing the valuation of balance sheets in the financial sector. And so by starting with the homeowner and working up you accomplish some of the objectives of the financial stabilization plans that we’ve seen come out of Congress and proposed by the administration in recent weeks. Senator McCain beli eves this is exactly the right kind of policy: provide direct help to homeowners and, at the same time, support the financial markets and keep them from further damaging the availability of credit to Main Street America, one of the real threats to the economy at this point it time.

“The initiative would rely on authorities that have been provided in recent months by the Congress. There’s $300 billion worth of refinance capacity at the FHA at this point. That can be combined with the statutory capacity at Fannie Mae and Freddie Mac, which are now owned by the federal government for all practical purposes, to purchase mortgages. If Fannie Mae or Freddie Mac bought 80% of the mortgage, you could leverage that $300 billion in financing tremendously. And there’s also the $700 billion that was provided to the Treasury by the Congress. There’s direct purchase authority in there that would allow to augment these as well, although, it may be useful to reserve that for other purposes.

“Mechanically the initiative is very simple. A homeowner would initiate the process by calling a mortgage broker or other originator and basically saying ‘I’d like to refinance my home.’ They would start the underwriting process, verify incomes, this is an opportunity as well to make sure the program has in it appropriate checks to make sure that government money is not being given to folks who are not primary homeowners, who don’t have adequate income, or otherwise, in the initial purchase of their home didn’t provide valid information. These authorities could then be used to retire the existing loan. The FHA would issue a guaranteed thirty year fixed-rate mortgage at a manageable interest rate. The homeowner would stay in the home, their financial burden would be relieved, the valuation of the existing loan would be resolved, there would no longer be a threat of default or diminished capacity to repay. That would stabilize financial markets, and the taxpayers’ contribution would be, in some cases the difference between the values of those two loans, something which would be the necessity for taxpayer contribution.

“Senator McCain thinks this is the best way to go forward. He’s obviously been personally very concerned about the problems facing the economy. He has participated, as I think everyone on this call knows, extensively in the process of taking the initial proposal by the administration to directly purchase Wall Street securities shaping it in a way that it was both possible to get it through Congress in a bi-partisan fashion, and also had it augmented with the adequate taxpayer protections, some oversight and transparency. This would take the authorities that have now come through and further target them in a way that he thinks would accomplish the purposes of financial stabilization but also to provide some relief to homeowners, near-term stimulus to the overall economy, and lay out a path where he can then turn to his initiatives in taxes, in energy, healthcare, trade to provide job creation in the American economy and a path forward out of this ter rible crisis.”

Listen To The Conference Call

###