Gingrich: McCain Must Come Out Against Bailout

ABC News' Teddy Davis Reports: Former House Speaker Newt Gingrich said Tuesday that President Bush's proposed bailout plan is a "dead loser on Election Day" and urged Sen. John McCain, R-Ariz., to come out against it, saying that the GOP nominee cannot be for it and maintain his claim to be a reformer.

"I don't know how he can vote for this and with a straight face go around and say that he's for real change and he's the reform candidate," Gingrich told ABC News.

Gingrich's comments were the latest sign that the presidential campaign could be upended by the Bush administration's $700 billion plan to buy up and hopefully resell troubled mortgage-backed securities.

If McCain were to comes out against the bailout plan, Gingrich said that Republicans would rally to his side and it would become possible for the McCain-Palin ticket to style itself as "taking on the Bush-Obama establishment."

"Either McCain is going to go along" with Obama in supporting the plan, said Gingrich, "in which case the establishment will have the fix in . . . or you are going to see McCain decide, much in the way that he did in picking Palin, that, in fact, he is a genuine maverick, that he genuinely defends the taxpayers, and that this is a terrible bill."

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By rsslllss @ Saturday, September 27, 2008 6:09 PM

McCain didn't oppose the bail-out plan in the debate, he's gonna stick it to us conservatives again, :(

By elsamman @ Friday, September 26, 2008 5:13 PM

Bail Out is Bad. The actual mechanics of the Paulson plan are good. So why don't we take Paulson's plan and get Wall Street to pay for it.

If you want the tax payer's balance sheet you can have it to solve this crisis. But you can't have our P&L. The financial community must insure this plan.

If it turns a profit and many people believe it will, Wall Street gets some of the profit in the form of a tax credit. If there is a loss the government will access financial institutions (read one time tax spread over several years backed up by warrants).

Get a majority of Wall Street stake holders to sign off (no taxation without representation) and the make every eligible institution be part of the guarantee whether they participate or not. After all they will benefit by not having the banking system melt down before their eyes.

By remy @ Friday, September 26, 2008 3:53 PM

Remember Regan and Reykjavik - Sometimes the best 'deal' is no deal, or to paraphrase Cool Hand Luke's (Paul Newman movie) "Sometimes nothing is a mighty cool hand". Sometimes No Deal is a mighty cool deal.

By alnardy @ Friday, September 26, 2008 3:39 PM

I think Bush is admirably sacrificing himself by helping in 'distancing' McCain from the Bush policies. Knowing that the 'bailout' is bad but giving McCain the opportunity to voice his opposition to it while maintaining the 'maverick' title and thus appealing to the voters. Al Carey, Hansville

By turtlehead @ Friday, September 26, 2008 11:24 AM

I have spent the first 15 years of my adult life being fiscally responsible, depriving myself and family of frills, to get out from under the banks. Now there is light in the tunnel, and the Fed Government wants to bleed me for more, sorry this is close to a last straw. If we pay this money, I will be working to feed the banks for the last 15 years of my career. I support the large irresponsible banks to be absorbed by the thousands of responsible banks throughout the country. NO Bailout for irresponsible Bankers and Homeowners!!

My local credit union has a net worth to asets ratio of 12.75%. They may be interested in picking up some of the better assets from these large banks. I'm certain everyone's local bank is in as good a shape. No bailout for Billionaire Bankers!!

I'm sure Warren Buffet is concerned about loosing his billions of investments. That sounds like a crisis for him, but not for me down here in small town America. No Bailout for Billionaire Bankers!!

By Lawson43 @ Friday, September 26, 2008 11:20 AM

I agree with Newt. McCain should do something very Maverickish. This will get the Republician Base behind him and tip the undesideds in his direction. Besides, it will be better for the country.

By 08ama @ Friday, September 26, 2008 2:03 AM

You republicans are always looking for a good fight, now you got one. Fight the Bailout. Obama will show, it is only through cooperation and compromise, can we make it through this thing.
I'm a simple man, but everyone has to admit, we have all cashed in on this. No golden parachutes will be enough to calm us peasants.

By cjlaw @ Thursday, September 25, 2008 3:59 PM

Free market options to this problem abound and we are being held hostage, rushed by greed and election year tactics. The value of this so called toxic paper is housing, property of people who could not afford it in the first place, all of it can be repackaged and sold at a profit. The democratic backed panic attack is nothing more than a tactic to hide the truth of who pushed the whole sub prime market along, Wall Street is the second biggest contributor to the democratic party.So now its time for the democratic party to pay up and let their wall street partners back up the trucks and dump the toxic paper mess on the floor of congress, they might cry on TV but behind the doors the next round of very profitable deals are being set with the real free market locked out. So your right Newt, Sen. McCain and our party must stand firm and call this all for what it is a rip off of titanic scale. He called the bluff so please URGE him to stand firm if you have his ear.

By jimpuett @ Thursday, September 25, 2008 12:52 PM

This bailout is socialism. Just because the majority of taxpayers use the credit system doesn't mean that everyone should pay for its problems. My family happens to be very fiscally conservative and we don't even have a home mortgage. Perhaps the way to pay for this bailout is for those that use the system to pay. Have a percentage tax added to the income tax for those that have deducted home mortgage interest on their Schedule A, and those that don't have that deduction are exempt.

Thanks for reading!

By thku4grace @ Thursday, September 25, 2008 12:32 AM

I've been a supporter of Newt's throughout the 1990's. I felt so offended by the constant liberal attacks he endured throughout time but was reassured he was still out his post as speaker. I can't remember anything that I valued differently than he while he was speaker. Today some things have changed. Newt has offered up an opinion on today's bailout that I don't agree. While I admit it sickens me to have to consider such a step, I also realize there aren't a lot good choices. Further, after watching Newt's interview he displayed misunderstandings of what the plan was and how it would be incorporated. Today's debt market is illiquid. When you experience an illiquid market values are at best a haphazard guess due to lack of buyers. Imagine if you owned a home and you were limited to selling that home to one or two different buyers. Now imagine you need to liquify that home asap or lose your a separate business. Now imagine both of those potential buyers are also unemployed and deeply in debt. You're stuffed! Striving for the lowest and best price is the best approach as a hedge fund manager, but it serves no purpose if your objective is to provide a support for those banks that are dealing with the mark to market rules. Newt seemed to think that the treasury was going to buy the debt at full markup. That's not true. They have stated that isn't their plan at all. Their plan is to buy somewhere in between the fire sale price and the actual market value which still provides for enough upside to clear a profit, whether by selling out before maturity after liquidity has returned to the market or if need be by maturity. Of course, this is the debt that is and will remain debt that will be honored by good mortgages. There is also debt that is and will remain bad. A lot of this will be loss. But the fact remains this is a small portion of the market. Everything is discounted. One of Newt's arguments is that it is ripe for corruption and perhaps some governmental self-dealing, and I agree this is an important issue that must be addressed. It can be designed with the type of oversight that is above reproach. Congress can never again serve as a watchdog. We know how they managed the oversight of the GSEs. The manager of this program needs to be above reproach and the most competent guy in the treasury. I can think of a few names starting with Paulson, but I don't know he wants to go one after January. I believe mark to market is not the problem. Mark to market is the messenger of corporate risk management gone a muck. Newt's idea of a 3 year average will only allow companies to practice similar strategies with less restraint. Then what? More regulation to offset a weaker accounting design? Can't agree with that.

By warwick @ Thursday, September 25, 2008 12:07 AM

Hello,
John McCain can win the election right here.The whole country hates this Paulson Plan. I think it would be better to:

1) Lend the money to the banks based on 35% of value of toxic paper

2) Charge an interest rate of 6% I/O

3) Take an equity position equal the value of shares based on an average stick price over the previous month stock price.

4) Push the banks to auction the toxic paper themselves to hedge funds etc.

To me this will make the citizens much happier and achieves the same result.Plus no need for huge staff to oversee the Paulson Plan.

Regards
Warwick Zealey

By jjamalley @ Wednesday, September 24, 2008 1:51 PM

This is circulating around trading desks today . . .

SUBJECT: REQUEST FOR URGENT BUSINESS RELATIONSHIP

DEAR AMERICAN:

I NEED TO ASK YOU TO SUPPORT AN URGENT SECRET BUSINESS RELATIONSHIP WITH A TRANSFER OF FUNDS OF GREAT MAGNITUDE.

I AM MINISTRY OF THE TREASURY OF THE REPUBLIC OF AMERICA. MY COUNTRY HAS HAD CRISIS THAT HAS CAUSED THE NEED FOR LARGE TRANSFER OF FUNDS OF 800 BILLION DOLLARS US. IF YOU WOULD ASSIST ME IN THIS TRANSFER, IT WOULD BE MOST PROFITABLE TO YOU.

I AM WORKING WITH MR. PHIL GRAM, LOBBYIST FOR UBS, WHO WILL BE MY REPLACEMENT AS MINISTRY OF THE TREASURY IN JANUARY. AS A SENATOR, YOU MAY KNOW HIM AS THE LEADER OF THE AMERICAN BANKING DEREGULATION MOVEMENT IN THE 1990S. THIS TRANSACTIN IS 100% SAFE.

THIS IS A MATTER OF GREAT URGENCY. WE NEED A BLANK CHECK. WE NEED THE FUNDS AS QUICKLY AS POSSIBLE. WE CANNOT DIRECTLY TRANSFER THESE FUNDS IN THE NAMES OF OUR CLOSE FRIENDS BECAUSE WE ARE CONSTANTLY UNDER SURVEILLANCE. MY FAMILY LAWYER ADVISED ME THAT I SHOULD LOOK FOR A RELIABLE AND TRUSTWORTHY PERSON WHO WILL ACT AS A NEXT OF KIN SO THE FUNDS CAN BE TRANSFERRED.

PLEASE REPLY WITH ALL OF YOUR BANK ACCOUNT, IRA AND COLLEGE FUND ACCOUNT NUMBERS AND THOSE OF YOUR CHILDREN AND GRANDCHILDREN TO WALLSTREETBAILOUT@TREASURY.GOV SO THAT WE MAY TRANSFER YOUR COMMISSION FOR THIS TRANSACTION. AFTER I RECEIVE THAT INFORMATION, I WILL RESPOND WITH DETAILED INFORMATION ABOUT SAFEGUARDS THAT WILL BE USED TO PROTECT THE FUNDS.

YOURS FAITHFULLY MINISTER OF TREASURY PAULSON

By sherylhamlin @ Wednesday, September 24, 2008 1:29 PM

Senators, Please do NOT vote for the bailout. The provisions such as mark to maturity are ridiculous, as well as other provisions. The banks with bad paper can hire Goldman Sachs to sell the paper for them at pennies on the dollar. Once sold and off the books, they can borrow or take capital again. People can start lending each other money. Just imagine if $700 billion were divided amond all Americans - we could put that money to good use and spur the economy. Other industries are making money and will survive. No one forced these financial institutions to make these marginal loans and no one forced people to borrow money they couldn't repay. VETO BAILOUT, PLEASE. Thanks.

By Retired Chief @ Wednesday, September 24, 2008 11:55 AM

$700-billion (with a "B") is a debt the United States cannot afford to embrace. Let the chips fly....

By patrick henry @ Wednesday, September 24, 2008 11:33 AM

Newt is right! He's right! He right! This bailout is bad for America. It is anti-American because it is anti-free market. It is socialism. Let the market be free! It is who we are as free Americans. McCain must strongly oppose the bailout and we the people will stand with him.

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