McCain, Obama call for greater bank security

[October 01, 2008]  WASHINGTON (AP) -- Presidential candidates Barack Obama and John McCain worked to cool the partisan heat of the financial crisis, with both calling for Congress to regroup and act quickly to prevent a feared financial collapse and foster confidence in the banking system.

The stock market embraced the new tenor, rocketing upward nearly 500 points on Tuesday, but nearly frozen credit markets -- where businesses turn to raise money -- showed no sign of a thaw.

Not since Franklin D. Roosevelt was voted into the White House in the depths of the 1930s Great Depression have presidential hopefuls found themselves in such uncertain economic times and under so much pressure to assure voters they are best able to prevent a feared financial meltdown.

Republican McCain and Democrat Obama both said Tuesday that politicians needed to set aside politics to save the financial system. Together, they backed a call to raise the Federal Deposit Insurance Corp. guarantee on bank accounts from a limit of $100,000 to $250,000.

FDIC Chairwoman Sheila Bair took up the proposal Tuesday afternoon, asking Congress for authority for an unspecified increase in insurance limits. She said most banks remained sound but contended that increasing the insurance cap would help ease the crisis of confidence.

The Dow Jones industrial average shot up 485 points, reclaiming nearly two-thirds of its staggering 778-point nosedive a day earlier.

The country's already reeling financial sector showed signs of coming unglued Monday when the House, contrary to expectations, rejected a $700 billion Bush administration rescue plan. President Bush had sent the measure to Capitol Hill 11 days earlier, declaring fast action essential.

After a raucous session in which Republican and Democratic lawmakers tried to blame one another for the rejection, it appeared the House would go back into session late Thursday or Friday to take another run at the bailout plan.

The Senate was scheduled to vote on the plan Wednesday evening, and McCain, Obama and his running mate, Sen. Joe Biden, were returning to Washington for the vote.

Obama warned it would be "catastrophic" if a deal isn't reached soon and said Congress should work on the bill it rejected.

"Given the progress we have made, I believe we are unlikely to succeed if we start from scratch or reopen negotiations about the core elements of the agreement," the Illinois senator said in a statement. "But in order to pass this plan, we must do more."

McCain, whose own Republicans were largely responsible for sinking the bill, acknowledged that lawmakers had failed to convince voters that the deal was urgent.

Both said the time for blame had passed and action was needed urgently.

Obama told about 12,000 people at a rally at the University of Nevada at Reno that the crisis "affects the financial well-being of every single American. There will be time to punish those who set this fire, but now is the moment for us to come together and put the fire out."

McCain concurred in an interview on MSNBC.

"So we've got to act and we've got to act -- and I'm confident we will -- we will pass legislation because we have to do it. And that's -- the important thing now is bipartisanship. Sit down and work together. That's what I want to do, and that's what I'm committed to do," the four-term Arizona senator said.

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On the Net:

McCain: http://www.johnmccain.com/

Obama: http://www.barackobama.com/

[Associated Press; By STEVEN R. HURST]

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