McCain’s Mortgage-Bailout Plan Has Pretty Much Everyone Up In Arms

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This is the "How Do You Like Me Now,
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Here’s an interesting little fact coming from Nate Silver: "Between the three debates thus far, the Obama-Biden ticket has used the phrase "middle class" 21 times. McCain-Palin have used it twice." Indeed, it was hard to miss Obama continuously steering his answers back to the middle class in Tuesday’s debate. But while McCain wasn’t actually using the phrase, on Tuesday he did introduce a proposal for homeowners that initially got lost in the post-debate pontificating. McCain’s “American Homeownership Resurgence Plan” would have the Treasury Department buy up bad home-loan mortgages at their original rates and renegotiate the price based on the diminished value of the home. And while that may sound appealing to those homeowners, doubts are being raised in both liberal and conservative corners about the burden the plan places on taxpayers, and the fairness of it all.

• The National Review editors don't think McCain's proposal can "improve on current law without rewarding an unacceptable amount of bad behavior," since McCain hasn't explained how it won't end up "lowering the standards set forth" in last summer's Frank-Dodd housing bill. Frank-Dodd looks "downright prudent compared to what McCain has proposed." [National Review]

• The Washington Post editorial board is skeptical, saying that "the cost will be hard to justify" unless McCain can prove his plan "would be more effective than other measures already adopted by the Bush administration." [WP]

The Wall Street Journal editorial board isn't "convinced that his plan to buy underwater mortgages at taxpayer expense is the cure this patient needs." It "appears to offer no upside for taxpayers," plus "it's far from clear how the Treasury would appraise, underwrite and issue millions of loans in a short space of time." [WSJ]

• George Will writes that when McCain made his proposal during the debate, "conservatives participating in MSNBC's 'dial group' wrenched their dials in a wrist-spraining spasm of disapproval." However, with Obama moving toward an electoral landslide, "it may be politically prudent for McCain to throw caution, and billions, to the wind." [WP]

• Andrew Romano sees the plan as clearly aimed at helping McCain "reconnect with the all-important middle class." Though it "represents the most direct attempt to date to rescue struggling homeowners," it seems redundant, rewards risky behavior, and may be hard to actually implement. Politically, he "risks enraging fiscal conservatives" and "exposing himself to charges of hypocritical pandering." [Stumper/Newsweek]

• Craig Crawford claims that McCain has at least come up with a plan, while Obama "remains content to keep his economic plans as vague as possible and reap the benefits of his party's structural advantage in this election." Obama will need to do something to help homeowners if he becomes president, but apparently "voters will have to wait until after the election to find out what that might be." [CQ Politics]

• Jane Sasseen believes McCain "clearly meant to use [the proposal] to position himself as different from both President George W. Bush and Obama on dealing with the average American's woes." However, "more explanation will be needed if McCain's proposal is going to be taken seriously and not simply as fodder for a debate." [BusinessWeek]

• Sasha Issenberg contends that the mortgage plan is part of a larger effort to woo female voters back to McCain. [Boston Globe]

• Nicole Gelinas calls the plan "an invitation to activists to demand permanent government subsidy of everyone who bought a house these last few years, no matter how foolishly." [NYP]

• J. Bradford Delong says it's "corrupt" to give "a large, no-strings-attached gift of taxpayer cash to bank executives who failed at their business of risk management, and to bank shareholders who failed at their business of hiring executives." [NYDN]

For a complete and regularly updated guide to presidential candidates Barack Obama and John McCain — from First Love to Most Embarrassing Gaffe — read the 2008 Electopedia.