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Obama blasts Congress for failing to pass bailout bill

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  • NEW: Barack Obama criticizes Congress, statement from John McCain
  • McCain's campaign says Obama "failed to lead"
  • VP candidates' debate is Thursday in St. Louis, Missouri
  • Joe Biden, Sarah Palin spending much of the week in debate prep mode
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(CNN) -- Sen. Barack Obama blasted Congress for not passing a financial rescue package Monday, while Sen. John McCain's campaign accused Obama and Democrats of putting "politics ahead of country."

The House of Representatives rejected a $700 billion plan to bail out the financial system, putting a roadblock in front of the largest government intervention in the market since the Great Depression.

The bill failed by a vote of 205 to 228, with 140 Democrats and 65 Republicans voting in favor and 95 Democrats joining 133 Republicans against.

"This is a moment of national crisis, and today's inaction in Congress as well as the angry and hyper-partisan statement released by the McCain campaign are exactly why the American people are disgusted with Washington," the Obama-Biden campaign said in a statement released shortly after the vote.

The statement went on to say that every American "should be outraged that an era of greed and irresponsibility on Wall Street and Washington has led us to this point." Video Watch more on the vote »

Also after the vote, McCain touted his role in last week's negotiations on the bailout bill.

"I laid out principles" including "responsible oversight," transparency and a cap on so-called golden parachutes --the big bonuses Wall Street CEOs would receive despite their involvement in the economic crisis, he said from Des Moines, Iowa. "I worked hard to play a constructive role."

He said he was satisfied with the way the bill was written, though "it wasn't perfect."

Earlier, McCain's campaign accused Obama and Democrats of injecting politics into the American economy.

"From the minute John McCain suspended his campaign and arrived in Washington to address this crisis, he was attacked by the Democratic leadership: Sens. Obama and [Senate Majority Leader Harry] Reid, Speaker Pelosi and others.

"Their partisan attacks were an effort to gain political advantage during a national economic crisis. By doing so, they put at risk the homes, livelihoods and savings of millions of American families," Doug Holtz-Eakin, a senior policy adviser for McCain and his running mate, Alaska Gov. Sarah Palin, said in a statement.

"Barack Obama failed to lead, phoned it in, attacked John McCain and refused to even say if he supported the final bill. ... This bill failed because Barack Obama and the Democrats put politics ahead of country," Holtz-Eakin said.

Republicans and Democrats blamed each other for the failure of the bill, which President Bush had urged Congress to approve.

Obama had earlier Monday spoken with Treasury Secretary Henry Paulson, Speaker of the House Nancy Pelosi and congressional leaders. Video Watch Pelosi say Democrats 'delivered' »

McCain and Obama had both said Sunday that they would probably vote for the legislation, as long as it included some key principles they had pushed for.

McCain announced last week he was "suspending" his campaign events to focus on the financial crisis, but Democrats accused him of pulling a political stunt. iReport.com: Do you support a Wall Street bailout?

The economy has dominated the campaign trail this month, and both candidates have been trying to convince voters that they will do a better job of getting the financial crisis under control.

Earlier Monday, McCain told voters that Obama isn't being honest about his tax votes and said the Democrat is "always cheering for higher taxes." iReport.com: Share your stories from the campaign trail

In response, the Obama campaign called McCain's remarks "false attacks" and an "angry diatribe."

"Two times, on March 14, 2008, and June 4, 2008, in the Democratic budget resolution, he voted to raise taxes on people making just $42,000 per year. He even said at the time that this vote for higher taxes on the middle class was 'getting our nation's priorities back on track,' " McCain said at a rally in Columbus, Ohio.

"Then something amazing happened: On Friday night, he looked the American people in the eye and said it never happened. My friends, we need a president who will always tell the American people the truth," McCain said.

McCain said a vote for Obama would "guarantee higher taxes, fewer jobs and an even bigger federal government" and charged that "these policies will deepen our recession." Video Watch McCain slam Obama on spending »

Shortly after McCain finished his speech, the Obama campaign accused the Arizona senator of lying.

"Sen. McCain's angry diatribe today won't make up for his erratic response to the greatest financial crisis of our time. John McCain knows that the budget he's talking about didn't end up raising taxes on a single American, and the lie he told the American people today is all the more outrageous a day after he admitted that his health care plan will increase taxes on some families," Obama campaign spokesman Tommy Vietor said.

In McCain's speech, the Republican presidential candidate was referring to votes on a resolution (Senate Concurrent Resolution 70) meant to outline the Senate's budget priorities through 2013, but the measure had no practical effect.

According to a CNN review of the resolution, it assumes that most of the 2001 and 2003 tax cuts pushed by President Bush will expire in that time, which McCain says amounts to a tax increase. Obama and his running mate, Sen. Joe Biden, voted "yes" on the resolution. McCain did not vote.

However, the Democrats offered their own cuts in the 48-page resolution, which called for several tax cuts and breaks, including rolling back the alternative-minimum tax and the so-called "marriage penalty."

According to an analysis by the independent Tax Policy Center, the tax plan Obama has proposed during the campaign would increase taxes in 2009 on the wealthiest 20 percent of households, while offering tax cuts for the other 80 percent.

Meanwhile, as Obama and McCain continue campaigning this week, their running mates will be focused on their upcoming debate. Palin and Biden face off Thursday in St. Louis, Missouri, in the only vice presidential debate of the election season.

After McCain's rally, Palin headed to McCain's ranch near Sedona, Arizona, for what a top aide calls "debate camp."

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Palin has already spent four days hunkered down in a Philadelphia hotel for debate prep with advisers.

Biden was preparing for the debate in Delaware on Monday.

CNN's Dana Bash and Alexander Marquardt contributed to this report.

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