Conservative pundits and bloggers expressed outrage over McCain’s plan to buy up troubled mortgages. McCain has pundits 'scratching' heads

Conservative pundits and bloggers expressed outrage Wednesday over John McCain’s plan for the federal government to spend $300 billion to buy up troubled mortgages, announced during his debate with Barack Obama Tuesday night.

“Last night, he took that position on the housing issue of buying up everybody's mortgage,” former Arkansas Gov. Mike Huckabee said on Fox News. “Conservatives are scratching their heads today and saying, ‘What happened?’”


"What on earth is that about?" Huckabee asked. “Then you got to ask, which houses? The condos in southern Florida, where people bought $500,000 homes as a second home and now can't pay for them? Are we buying those, too?”

Conservative columnist and blogger Michelle Malkin couldn’t hold back her disdain for the proposal.

“I can’t underscore enough what a rotten idea John McCain’s ACORN-like government mortgage buy-up is,” Malkin wrote on her blog, referring to the controversial Association of Community Organizations for Reform Now, a group reviled by conservatives for its support of liberal ideals and alleged corruption. “Will he propose a similar plan for those who bought mutual funds at or near the market top?”

“Folks, forget about all this policy wonkery,” National Review’s Andy McCarthy advised in the magazine’s online blog, The Corner. “McCain's policies have driven us crazy for years.”

“The thought that he's going to win this thing on policy is foolish,” McCarthy wrote. “I mean, now, Fan, Fred and $800 billion later, his great idea is to spend a few hundred bill more to buy the bad mortgages? Really gets the juices flowing, doesn't it?”

McCain senior domestic policy adviser Douglas Holtz-Eakin defended the plan in a conference call with reporters, calling it the “best way to go forward.”

“Sen. McCain believes this is exactly the right kind of policy. Provide direct help to homeowners; at the same time, support the financial markets and keep them from further damaging the availability of credit to Main Street America, one of the — the real threats to the economy at this point in time,” Holtz-Eakin said.

Under McCain’s plan, the government would purchase mortgages directly from homeowners rather than from banks, and replace the homeowners’ current payments with “manageable fixed-rate mortgages” designed to keep people from defaulting. Taxpayers would cover the difference in cost between the old mortgage and the cheaper one provided by the government.

McCain critics said the plan was similar to ones already proposed and scoffed at the notion that it anything new. But among conservatives, the idea of rescuing failed mortgages sparked the same sort of ire as the $700 billion economic bailout recently passed by Congress.

“Conservatives groaned in unison when John McCain launched his ‘new’ initiative to renegotiate the principal on home mortgages with owners approaching bankruptcy,” conservative blogger Ed Morrissey wrote.

“Some called this a ‘second bailout,’ and others predicted a massive hit on home values nationwide,” he added. “In fact, this is nothing terribly new nor innovative, and it has as much chance of preserving home values as it does of eroding them.”

When introducing his plan during the debate, McCain acknowledged that it carried a high price tag.

“Is it expensive? Yes,” McCain said. “But we all know, my friends, until we stabilize home values in America, we're never going to start turning around and creating jobs and fixing our economy. And we've got to give some trust and confidence back to America.”

Conservative financial scholar Alex J. Pollock of the American Enterprise Institute said he understands why conservatives are upset, but he sided with McCain nonetheless.

“Nobody who understands the power of free markets likes bailouts, but it is a phase we go through again and again,” Pollock said. “These are not things you’d like to do, but you’re addressing the crisis, so you do it.”