Thursday, October 9, 2008

Switch and Bait

Remember the plan that John McCain brought up in the debate on Tuesday night to buy up all those mortgages and help out those struggling homeowners? Sounded good, right? Help the homeowners and get them back on their feet? Whoops, check that.

Sen. John McCain (R-Ariz.) made an overnight change in the homeowner bailout he proposed at Tuesday’s presidential debate, making it more generous to financial institutions and more costly for taxpayers.

McCain’s staff says it was always meant that way.

When McCain sprung his surprise idea at the start of the debate in Nashville, his campaign posted details online of his American Homeownership Resurgence Plan, which would direct the government to buy up bad home mortgages, allowing strapped people to keep their property.

The document posted and e-mailed by the McCain campaign on Tuesday night says at the end of its first full paragraph: “Lenders in these cases must recognize the loss that they’ve already suffered.”

So the government would buy the mortgages at a discounted rate, reflecting the declining value of the mortgage paper.

But when McCain reissued the document on Wednesday, that sentence was missing, to the dismay of many conservatives.

That would mean the U.S. would pay face value for the troubled documents, which was the main reason Sen. Barack Obama (D-Ill.) gave for opposing the plan.

A McCain campaign official explained the change: “That language was mistakenly included in the initial draft and it’s been corrected. It doesn’t reflect the intentions of the initiative, which necessitated the correction and the removal of the sentence. A simple mistake.”

In other words, it would shift the losses from the banks that got us into this mess in the first place and put it on the government. That’s us. So one way or another, the banks make out like bandits and the homeowners get screwed…again.