President Bush on Wednesday warned Americans and lawmakers reluctant to pass a $700 billion financial rescue plan that failing to act fast risks wiping out retirement savings, rising foreclosures, lost jobs, closed businesses and even “a long and painful recession.”
His warning followed extraordinary invitations he issued to presidential nominees Barack Obama and John McCain, and key congressional leaders, to attend a meeting at the White House on Thursday in hopes of working out a compromise.
Meanwhile, raw politics threatened to derail the first presidential debate as McCain suspended his campaign and challenged Obama to delay their first debate, scheduled for Friday in Mississippi, and join forces to help Washington deal with the financial mess. Obama quickly rebuffed his GOP rival, saying the debate should go forward and the next president needs to “deal with more than one thing at once.”
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The bailout, which the Bush administration asked Congress last weekend to approve before it adjourns, is meeting with deep skepticism, especially from conservatives in Bush’s own party who are revolting at the high price tag and unprecedented private-sector intervention.
Though there is general agreement that something must be done to address the spiraling economic problems, the timing and even the size of the package remained in doubt and the administration has been forced to accept changes almost daily.
Bush took the unusual step Wednesday night of calling Democratic Sen. Barack Obama directly to invite him to the meeting, White House press secretary Dana Perino said. White House aides extended the invitations to Republican McCain and to GOP and Democratic leaders from Capitol Hill.
An Obama spokesman said the senator would cut short his debate preparations in Florida and will travel to Washington, D.C. on Thursday.
“Senator Obama has been working all week with leaders in Congress, Secretary Paulsen, and Chairman Bernanke to improve this proposal, and he has said that he will continue to work in a bipartisan spirit and do whatever is necessary to come up with a final solution,” campaign spokesman Bill Burton said in a statement Wednesday night.
Aides to Obama told BlackAmericaWeb.com Wednesday evening that Obama is still preparing for Friday’s debate and plans to participate as scheduled.
“It’s my belief that this is exactly the time when the American people need to hear from the person who, in approximately 40 days, will be responsible for dealing with this mess,” Obama said at a news conference in Clearwater, Florida. “It’s going to be part of the president’s job to deal with more than one thing at once.”
The jockeying between McCain and Obama began after the senators spoke privately Wednesday.
McCain beat Obama to the punch with the first public statement. The surprise announcement was an attempt to outmaneuver Obama on the economy, an issue McCain trails on and as the Democrat gains in the polls. McCain went before TV cameras minutes after they spoke and before the campaigns could hammer out the agreed-upon joint statement.
Democrats immediately questioned McCain’s decision to skip the debate at the University of Mississippi, saying McCain is a desperate candidate running a troubled campaign, trying to buy some time.
“He’s like the kid who is late for the class test and he needs more time to study,” one Obama campaign insider said. “If he doesn’t show up Friday, it won’t look good. It will look like what it is: Transparent and posturing.”
Many are suggesting that McCain’s surprising move was intended to serve as a distraction from potentially damaging news about key staffers from the campaign he’s so willing to suspend.
After creating ads tying Obama to Fannie Mae and Freddie Mac’s troubles and calling on Jim Johnson and Franklin Raines — both Obama supporters and former Fannie Mae executives — to return large golden parachute payments they received from the corporations after leaving, media outlets reported Wednesday that the lobbying firm of Rick Davis, McCain’s campaign manager, was paid $15,000 a month by Freddie Mac almost up until the time it was taken over last month by the government in the nation’s financial crisis.
That money is on top of more than $30,000 a month that went directly to Davis for five years starting in 2000.
The $30,000 a month came from both Freddie Mac and Fannie Mae, the other housing entity now under government control because of the nation’s financial crisis, after recruiting Davis to run a newly created group, the Homeownership Alliance. The five years of payments followed McCain’s failed bid for the presidency in 2000.
Roll Call, a Capitol Hill newspaper, reported early Tuesday evening that Davis’ lobbying firm remained on the Freddie Mac payroll. The New York Times reported all the payments, posting an article on its Web site Tuesday night revealing the $15,000 a month to the firm of Davis Manafort. The newspaper quoted two people with direct knowledge of the arrangement.
On Wednesday, Obama’s campaign accused Davis and McCain’s campaign of not telling the truth about Davis’ continuing financial relationship with Freddie Mac.
Campaign spokesman Dan Pfeiffer said it was troubling that Davis’ firm “continued to be compensated by Freddie Mac until as recently as last month, but that the firm did little work and apparently was being paid simply to provide access to the McCain campaign.”
McCain’s campaign pushed back.
“Mr. Davis has never — never — been a lobbyist for either Fannie Mae or Freddie Mac,” the McCain campaign said in criticizing the news media’s focus on the payments to Davis and his lobbying firm.
Robert McCarson, who was director of corporate relations at Fannie Mae from 1999 to 2004, said it is “ironic that the campaign that bills itself as the campaign of reform would give such a legalistic answer.
“The reality is that Rick Davis didn’t have to register as a lobbyist to do his most powerful lobbying, which was to be the person that John McCain staked his future in as his campaign manager,” said McCarson, a Democrat who was an aide in 1990-91 to then-Rep. Chuck Schumer (D-N.Y.).
McCain’s new posture comes as the latest polls show Obama with the “first clear lead” of the general-election campaign according to a Washington Post-ABC News poll. The poll showed Obama now leads McCain by 52 percent to 43 percent.
The Commission on Presidential Debates said that it is “moving forward” with Friday’s debate, despite McCain’s announcement.
“We believe the public will be well served by having all of the debates go forward as scheduled,” the Commission said.
C.J. Jordan, national coordinator for The African American Coalition for McCain, told BlackAmericaWeb.com that McCain showed “tremendous leadership” in his decision to suspend his campaign and return to Washington.
Jordan dismissed speculation that McCain was engaging in political theatrics because he is slipping in the polls.
“Why would he dodge the debate?” Jordan asked. “Foreign policy [the focus of Friday’s debate] is his strength.”
“This economic crisis could lead to a worldwide collapse, and Obama doesn’t understand the ripple effects,” she said. “This is not the time for debates. It’s time to deal with the nation’s business.”
McCain said Congress must focus on a bipartisan solution to the nation’s financial crisis as the Bush administration’s $700 billion bailout proposal seemed headed for defeat. He said ominously, credit will dry up, people will no longer be able to buy homes, life savings will be at stake and businesses will not have enough money to pay workers.
“It has become clear that no consensus has developed to support the administration’s proposal,” McCain said. “I do not believe that the plan on the table will pass as it currently stands, and we are running out of time.”
Rep. Barney Frank (D-Mass.) called McCain’s decision to skip the debate “the longest ‘Hail Mary’ in the history of either football or Marys.”
But Sen. Lindsey Graham, McCain’s representative in debate negotiations, said McCain will not attend the debate “unless there is an agreement that would provide a solution” to the financial crisis.
Graham (R-S.C.) told The Associated Press that the agreement would have to be publicly endorsed by Obama, McCain, the White House and congressional leaders, but not necessarily given final passage by the House and Senate.
Asked whether the debate could go forward if McCain doesn’t show, Obama spokesman Robert Gibbs replied, “My sense is there’s going to be a stage, a moderator, an audience and at least one presidential candidate.”
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