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Will candidates' financial plans work?

  • Story Highlights
  • Barack Obama, John McCain focusing on plans to fix economy
  • Obama camps slams McCain's plan, says there's more info on a box of Froot Loops
  • Bad economic situation usually benefits party not in power, analysts says
  • McCain is not acting like there is an incumbent party, Schneider says
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(CNN) -- In the wake of the country's financial meltdown, Sens. Barack Obama and John McCain have been telling voters they'll fix the economy while their opponent would only make it worse.

As the economy dominated voters' concerns, McCain and Obama stepped up the political blame game and got more specific about how they would deal with the country's financial problems.

The candidates' focus on the economy comes during a week of roller coaster activity in the financial markets:

There was the collapse of U.S. investment bank Lehman Brothers, a Bank of America buyout of Merrill Lynch and a government bailout of insurer AIG. Then, President Bush on Saturday asked Congress for the authority to spend up to $700 billion to purchase troubled mortgage assets and get things under control.

Here are a few of the candidates' proposals, and what it would take to put them into action:

McCain said he wants to fire the chairman of the Securities and Exchange Commission, the chief federal watchdog for the investment industry.

"The president can do that, but obviously he'd have to find a better person for the job. And by the way, the current commissioner says he's quitting when Bush leaves office anyways," said CNN's Tom Foreman.

The Republican presidential candidate also wants to set up a Mortgage and Financial Institutions Trust, which he says would help companies avoid bankruptcy while protecting their customers. The money would also help consumers restructure loans so they can keep their homes.

"What's missing on all of this? Well, the price tag," Foreman said.

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McCain also wants to create a top-level commission to figure out how to streamline and strengthen federal agencies charged with protecting the economy. Video Watch how the economy is affecting the campaign trail »

"There's been a lot of talk about the need for this, and it could work, but it would take time. Just because a committee figures out what ought to be done doesn't mean it will happen," Foreman said.

Obama this week also also offered up a lot of proposals, including a commission similar to what McCain suggested.

The Democrat called for a Homeowner and Financial Support Act that would provide funds to prevent catastrophic failures in the financial industry and help keep people in their homes.

Foreman said this evokes the same question asked about McCain's program: "What is this really going to cost? Who's going to pay for it, and can we afford it?"

Obama also wants a $50 billion emergency economic stimulus plan. The money would go toward 1 million jobs for rebuilding infrastructure and schools, and helping local governments avoid budget cuts.

"This would obviously be targeted spending, as opposed to the scattershot of this summer's economic stimulus plan, but that plan was also three times as big as what Obama is proposing here. So you can draw your own conclusions about the bang he might get for these bucks," Foreman said.

Additionally, Obama wants to change bankruptcy laws to make it easier for people who go bankrupt to stay in their homes.

"Interesting to see how this would fare politically. In 2005, a few years ago, bankruptcy laws were rewritten to make it tougher, not easier, for people to hold on to their assets after they go broke," Foreman said.

As the candidates present their economic proposals, they are painting their rival's plans as unsafe for the country.

Earlier this week, McCain said "a vote for Barack Obama will leave the country at risk." Obama said Sunday that McCain will lead the country in "the same, disastrous direction."

Following news of the government's rescue efforts, McCain urged the government to limit taxpayer bailouts and offered a six-point plan that called for streamlining the federal bureaucracy.

Obama said he supported the government's efforts, but offered few specifics on how he would resolve the situation. The senator said he needed more time to review details of the rescue plan before presenting a blueprint.

Obama defended his decision to hold back on specific solutions to fix the financial crisis, and he continued to hammer McCain, saying he will do anything to win the election.

McCain's economic adviser said Sunday that Obama has been "missing in action."

"Sen. McCain has a plan for the Wall Street problem, short-term and long-term," Douglas Holtz-Eakin said on CNN's "Late Edition."

"He's got a plan for the American workers so that they are going to have a job, access to health care, energy at reasonable prices, be able to sell around the globe. He's telling the truth to the American people, and he should," he said.

Obama's economic adviser brushed off suggestions that Obama was behind on any financial issues.

"Six months ago, he outlined a clear, six-point plan of how we could re-establish oversight of financial markets, and he has expanded and reiterated that," Austan Goolsbee said on Late Edition. "John McCain, at that same time six months ago, was saying we ought to start removing regulatory barriers. So he has been way out front and way foresighted on these issues. It's completely inaccurate to say he's nowhere to be found."

He also slammed the plan laid out on McCain's Web site, saying, "There is more information on the back of a box of Froot Loops than on what they presented."

Historically, when the economy is in bad shape, it plays better for the party not in power, CNN senior political analyst Gloria Borger said.

"If you look at unemployment numbers in battleground states, those unemployment numbers have gone up, so one would have to say it would benefit the party out of power," she said.

"But I think the American public is looking now to see how these candidates handle the crisis. ... I think this next week will tell us what the American public feels about their leadership," she said.

McCain has been stressing his independence from the current administration, countering Democratic accusations that he is "more of the same."


While the economic woes should hurt McCain as a representative of the party in power, CNN senior political analyst Bill Schneider said this year, there is no incumbent running.

"At the moment, in this campaign, everybody is pretending there is no incumbent party," he said. "I don't know if McCain can get away with it. He's not supposed to -- he's the president's party. But at the moment, the odd thing about this election is there is no incumbent running."

CNN's Dana Bash and Tom Foreman contributed to this report.

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