McCain Softens His Opposition To AIG Bailout

Republican presidential candidate John McCain, struggling to strike the right note amid roiling financial markets and a Wall Street restructuring, on Wednesday softened his opposition to a bailout of mega-insurer AIG that he had flatly ruled out a day earlier.

John McCain
John McCain

Before the Treasury Department proposed an $85 billion loan to keep afloat American International Group Inc., the country's largest corporate insurer, McCain said he wouldn't support any bailout for AIG or any other company. "This is something that we're going to have to work through," he said Tuesday. "There's too much corruption, there's too much excess."

Watch McCain's appearance on CNBC in the video below

On Wednesday, McCain repeated that he didn't want to bail out AIG and knew of no one else who did. But, he said millions of people with retirement, investments and insurance tied to AIG were "going to have their lives destroyed because of the greed and excess and corruption."

Elaborating on the charge of corruption, McCain said that many Wall Street executives had claimed "everything's fine, not to worry" and that Congress and regulators had paid no attention. "All of them were asleep at the switch," he said, and went on to blame special interests and lobbyists as well.

Asked for specific examples of corruption regarding AIG, senior McCain campaign adviser Steve Schmidt offered none.

"Well, at this hour, when you look at the situation, it is still muddled and unclear," Schmidt told The Associated Press. "But it is clear that the system has been corrupted, that there has been systemic failures, that the economy has been damaged by greed and avarice, and the broken institutions between Washington and New York have now conspired in a way that has put the American economy in crisis."

McCain repeated his call for a high-level commission, on the order of the one that investigated the Sept. 11 attacks, to review the economic troubles on Wall Street. But when asked by ABC for examples of what he would do to deal with the current problems, McCain cited only the proposals he offered well before the crisis emerged — no tax increases, affordable health care and energy alternatives among them.

In the interview, McCain called the financial crisis "one of the most severe crises in modern times," yet on Monday morning he had maintained his oft-stated position that "the fundamentals of our economy are strong." For that he drew withering criticism from his Democratic opponent, Barack Obama, and others. By afternoon, with the markets falling amid other bad financial news, McCain was using a more dire tone.

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In two new television ads Wednesday, McCain asserts that he is the right leader to keep Americans' savings safe.

"Enough is enough," McCain says in one of the commercials. "I'll meet this financial crisis head on. Reform Wall Street. New rules for fairness and honesty. I won't tolerate a system that puts you and your family at risk. Your savings, your jobs — I'll keep them safe."

In a second ad, McCain criticizes Obama as offering only "talk and taxes" as solutions. Obama himself taped a two-minute commercial Tuesday in Colorado in which he speaks directly to American voters about the country's economic problems.

The early morning release of McCain's ads and their rapid production — one was taped during a 10-minute stop at a home in Tampa, Fla., on Tuesday — highlight his efforts to reclaim the high ground on a subject he has acknowledged is a weakness.