McCain Campaign In Complete Dissaray

Senator Lindsey Graham, right, in an interview discussed a tax plan by Senator John McCain that his campaign later disavowed.
No New Economic Proposal Expected From McCain
By JACKIE CALMES, NY Times
Published: October 12, 2008

WASHINGTON — Despite signals that Senator John McCain would have new prescriptions for the economic crisis after a weekend of meetings, his campaign said Sunday that Mr. McCain, the Republican presidential nominee, would not have any more proposals this week unless developments call for some.

The signs of internal confusion came as the campaign was under pressure from state party leaders to sharpen his message on the economy and at least blunt the advantage that Democrats traditionally have on the issue in hard times. Republicans have grown fretful as Senator Barack Obama, the Democratic presidential nominee, has edged ahead in polls three weeks before the election, while Mr. McCain has veered between ill-received economic plans and attacks on Mr. Obama’s character.

Mr. McCain took a break Sunday from filming campaign advertisements and practicing for a final debate with Mr. Obama on Wednesday to cheer volunteers at a phone bank near his Northern Virginia headquarters. Mr. McCain told them he planned to “whip his you-know-what in this debate.” The group erupted with laughter and applause.

On Saturday, his advisers were considering a range of economic ideas, one indicated. On Sunday, on the CBS News program “Face the Nation,” Senator Lindsey Graham of South Carolina, a confidant of Mr. McCain, confirmed a report on Politico.com that Mr. McCain was weighing proposals to cut taxes on investors’ capital gains and dividends. “It will be a very comprehensive approach to jump-start the economy,” Mr. Graham said, “by allowing capital to be formed easier in America by lowering taxes.”

But McCain advisers later said they did not know why Mr. Graham said that. One noted that Mr. McCain’s economic plan already would cut capital gains and dividend tax rates, by extending President Bush’s 2003 tax cuts. At the phone bank, Mr. McCain declined to answer a question from a reporter about what he was considering.

“We do not have any immediate plans to announce any policy proposals outside of the proposals that John McCain has announced, and the certain proposals that would result as economic news continues to come our way,” said a campaign spokesman, Tucker Bounds. Mr. McCain’s policy adviser, Douglas Holtz-Eakin, said, “I have no comment on anything, to anybody.”

Rarely have presidential campaigns had to react so close to an election to so serious a crisis as the global economic panic. Both candidates are struggling to look like leaders, without impeding the efforts of those in charge. By nearly all accounts and in recent polls, Mr. Obama has received higher marks for projecting calm and consistency while Mr. McCain has been criticized as flailing.

“At this point I don’t think McCain can say anything on the economy that will sound credible,” said Bruce Bartlett, a former economic adviser to President Ronald Reagan and President George Bush.

Mr. McCain continued to draw criticism for his announcement last week that, as president, he would have the Treasury buy troubled mortgages at face value and give qualified homeowners instead government-guaranteed, low-interest mortgages based on their residences’ reduced value. After first saying lenders would pay the difference, the next day the McCain campaign said taxpayers would.

On the ABC News program “This Week” on Sunday, the second-ranking House Republican leader, Representative Roy Blunt of Missouri, suggested, as the Obama campaign has, that the McCain mortgage proposal was unnecessary because the concept was “essentially in several pieces of law already” and wrong to leave taxpayers with the cost.

“Somebody needs to take the loss here, and it needs to be the person that had the bad judgment of making that loan, of buying those poorly put-together mortgage-backed securities,” Mr. Blunt said. “It shouldn’t be loss borne by the taxpayer.”

Both Mr. McCain and Mr. Obama plan speeches Monday on the economy. Mr. Obama, at a rally in Toledo, Ohio, will suggest ways to build on the government’s plan to inject capital into banks to ease the credit crisis, an adviser said.

Mr. McCain will be in North Carolina and Virginia, states that Republicans can normally count on but where Mr. Obama is showing strength. In his visit with volunteers on Sunday, Mr. McCain acknowledged that “the economy has hurt us a little bit in the last week or two” and that he was “a couple points down” in national polls.

But he said he would rebound because voters “want knowledge and they want vision.”

Elisabeth Bumiller and Jeff Zeleny contributed reporting.