At last night's debate, John McCain proposed a $300 billion rescue plan for Americans with sub-prime mortgages, in which the Treasury Department would buy such mortgages back and, if their holders proved to be sufficiently financially stable, would convert them into fixed-rate loans. The Obama campaign responded that the bailout package passed by Congress already grants such powers to the Secretary of the Treasury, and that Obama floated this idea two weeks ago. And as I reported on Sept. 22, Bill Clinton has been talking about the mortgage conversion idea in the form of a Depression style Homeowners' Loan Corporation. Three days later, Hillary Clinton floated such a plan in a Wall Street Journal op-ed. Is McCain's proposal as strong? No. A key weakness of the package that passed Congress is that it leaves too vague how the Federal Housing Authority and Treasury Secretary should go about the large scale refinancing of sub-primes. Democrats had proposed that bankruptcy judges be given such powers, but that provision was lost during negotiations. McCain's proposal is simply not as specific as it needs to be, as it does not create a structure through which refinancing can easily take place. Alongside the "Main Street/Wall Street" juxtaposition, this appears to be another clear rheotrical appropriation by McCain of a Democratic idea. --Dana Goldstein
