McCain backs bailout while defending deregulation

ECONOMY | Obama puts some blame on poor oversight

WASHINGTON -- John McCain defended deregulation on Wall Street even as he endorsed a $700 billion bailout of financial firms, in an interview aired Sunday.

Barack Obama said an inadequate regulatory system was partly responsible for the crisis.

McCain has long supported fewer regulations for businesses. But as the financial crisis on Wall Street worsens, McCain is calling for more government.

Obama said McCain is late in calling for better oversight after years of supporting fewer regulations.

McCain was asked if he regretted supporting a 1999 law that removed barriers between investment banks and commercial banks erected in 1933 in response to the 1929 stock market crash.

''No,'' McCain said. ''I think the deregulation was probably helpful to the growth of our economy.''

McCain defended the Bush administration's bailout as necessary but acknowledged it could get expensive.

''We're going to take over these bad loans,'' he said. ''And we're going to have the taxpayer help you out. But when the time comes and the economy recovers, then anything that's gained back is going to go to the taxpayers first.

''I'm not saying this isn't going to be messy. And I'm not saying it isn't going to be expensive. But we have to stop the bleeding.''

The plan would dole out huge sums of money to financial firms to purchase bad mortgage-backed securities so the firms can resume normal lending operations.

In a statement to reporters, McCain said he favors a bipartisan oversight panel including Warren Buffett, Mitt Romney and Michael Bloomberg to monitor the bailout.

Obama said, ''There were a lot of factors involved'' in the crisis. ''But I think there is no doubt that if we had had a regulatory system that had kept pace with the changes in the financial system, that would have had an enormous impact in containing some of the problems that are out there.''

•  •  Obama is scheduled to speak at noon today at the Resch Center in Green Bay Wis., where McCain and Sarah Palin spoke last week.

•  •  McCain addressed the National Guard Association Sunday in Baltimore. He and Palin were scheduled for a rally today in Media, Pa.

•  •  Palin spoke at a large rally Sunday at a retirement community north of Orlando, Fla. The fire chief estimated the crowd at 60,000. Palin had no events Saturday, though she told the crowd daughters Piper and Willow got to go to Disney World.

•  •  Democratic officials say Michelle Obama will visit cities in Wisconsin this week and host a roundtable discussion with military spouses Wednesday in Allentown, Pa. Later that afternoon, she is to attend a rally in Philadelphia.•   The campaign says Jill Biden, wife of Joe Biden, will also attend both events. AP