MCCAIN’S NEW MORTGAGE PLAN?…. It’s generally tough to find actual news during a presidential debate, but John McCain did raise a few eyebrows early on with a proposal that, at least at first blush, sounded kind of new.
“As president of the United States, Alan, I would order the secretary of the treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes — at the diminished value of those homes and let people be able to make those — be able to make those payments and stay in their homes.
“Is it expensive? Yes. But we all know, my friends, until we stabilize home values in America, we’re never going to start turning around and creating jobs and fixing our economy.”
He added that this is “my proposal, it’s not Sen. Obama’s proposal, it’s not President Bush’s proposal.”
There are a couple of problems here. First, in the exact same debate, asked about the notion of personal sacrifice, McCain reiterated his support for an “across-the-board freeze” in federal spending, “except for defense, Veterans Affairs, and some other vital programs.” It sounded as if McCain wanted to cut spending dramatically, while simultaneously unveiling a massive new spending plan.
Second, the Washington Post reported, “The Obama campaign called the mortgage idea ‘old news,’ saying that a similar Treasury Department program is already underway as part of the economic rescue package and that Obama backed it.”
Indeed, McCain’s comments last night sounded similar to remarks Obama made at a press conference two weeks ago: “[W]e should consider giving the government the authority to purchase mortgages directly instead of simply purchasing mortgage- backed securities. In the past, such an approach has allowed taxpayers to profit as the housing market recovered. This is not simply a question of looking out for homeowners; it’s doubtful that the economy as a whole can recover without the restoration of our housing sector, including a rebound in the home values that have suffered dramatically in recent months.”
As Hilzoy explained last night, there might be something different about the proposal McCain mentioned during the debate; we’ll have to wait for additional details. At this point, though, it sounds a little thin.