McCain, Obama, Clinton home in on economy

WASHINGTON — Hillary Rodham Clinton, Barack Obama and John McCain have diagnosed the swooning U.S. economy and have come up with rival plans to revive it. If the downturn lasts as long as some economists predict, one of the three will get a chance to try to sell his or her proposal to Congress as president.

Or if the economy hits bottom before Inauguration Day and then turns up, the victor may be handed a rare gift: the chance to begin a presidency presiding over the early stages of a rebound.

Take your pick. Who knows where the economy will be in 9 1/2 months?

As economic clouds darkened last week, all three candidates delivered major speeches on the economy while the Bush administration prepared a plan to give the Federal Reserve new regulatory powers over the financial system.

Democrats Clinton and Obama outlined competing $30 billion stimulus packages to help homeowners facing foreclosure and other victims of the financial crisis. This would be on top of the $168 billion stimulus package of rebates and temporary tax cuts passed by Congress last month and signed by President Bush. Both Clinton and Obama also called for broader financial regulation.

Republican John McCain advocated voluntary action by lenders, more transparency in the lending process and the convening of a national conference of accountants and mortgage lenders to review how real estate is valued. He opposed large, taxpayer-financed bailouts but backed cuts in corporate tax rates and making permanent expiring Bush tax cuts.

The two Democrats are calling for a more activist role for the U.S. government to protect individuals. McCain is echoing standard GOP dogma of protecting markets and opposing bailouts.

All three praised recent intervention by the Fed and the Treasury Department to calm the financial storm, including sharp Fed interest rate cuts and a $29 billion rescue plan for investment giant Bear Stearns.

Since all three are members of the U.S. Senate, they can influence congressional action now. But political reality being what it is, their time for impact — at least for one of them — probably lies in the future, not the present.

And there already is a welter of antirecessionary proposals pending in Congress — including major bills by Sen. Christopher Dodd, D-Conn., and Rep. Barney Frank, D-Mass., to let the government step in and back up to $400 billion in troubled loans. Both Clinton and Obama have endorsed this legislation.