Biden: Fed, Treasury should have temporary authority over crisis

By Bob Stuart

Published: September 20, 2008

Giving the Federal Reserve and Treasury Department temporary authority over the lurching economy could pull it from the brink, Democratic vice presidential candidate Joe Biden declared Saturday from the campaign trail.
“The Federal Reserve and the Treasury Department need to stop the bleeding. If they are not able to stop a run on the market now, the economy could collapse,” Biden said during a brief telephone interview while campaigning in Southwest Virginia at the United Mine Workers fish fry in Russell County.
The Bush administration Saturday proposed a $700 billion plan to buy distressed mortgage securities in an effort to halt the hemorrhaging on Wall Street. The bailout would be the largest in U.S. history.
In addition, Biden said, he would like to look at a long-term plan for dealing with the massive debt. The Bush administration Saturday proposed increasing the public debt limit from $10.6 trillion to $11.3 trillion.
Biden and Democratic presidential nominee Barack Obama discussed the economy Friday in a conference call with former Federal Reserve Chairman Paul Volcker, former Treasury Secretary Robert Rubin and billionaire investor Warren Buffett.
The experts, Biden said, agreed “that we have to do something immediately, and then look at how to deal with the accumulated debt.” The temporary solution means a purchase of bad debts, Biden said.
Saturday marked the second consecutive day for Biden campaigning in Virginia, where the Obama campaign has spent considerable time and resources in recent weeks.
If Obama can win Virginia, he can win the election, Biden said. President Johnson in 1964 was the last Democrat to carry Virginia.
“It’s a pivotal state and we have a genuine chance,” Biden said. “It’s not just registration.”
Obama has launched massive registration drives in Virginia in hopes of extending recent gains made by Democrats in the traditionally red Old Dominion, highlighted by Jim Webb’s victory over Republican George Allen in the 2006 U.S. Senate race.
A key, Biden said, could be Obama’s focus on the middle class.
“We think Virginians are no different than Delawareans and Pennsylvanians in what they talk about at the kitchen table,” Biden said. “We think we’re offering real answers.”
Polls show the race in Virginia to be a virtual dead heat.
While Obama offers middle-class tax cuts, Biden said his longtime friend and Republican presidential nominee John McCain plans more of the same, starting with tax cuts for the wealthy.
McCain, Biden said, talks about change, but is not offering any substantive alternatives to the policies of the Bush administration.
“What is he going to change?” Biden asked. “He has agreed with Bush on education, health care and the war.”
Biden has known McCain since the latter was a Navy liaison to the U.S. Senate.
“We argue as friends,” Biden said.
That friendship, Biden said, mirrors his relationship with Republicans inside the Beltway.
“Ask anybody in the Republican Party. I can reach across the aisle and get things done,” Biden said.
Obama brings a similar bipartisan spirit, Biden said, pointing to the Illinois senator’s work with Indiana Republican Sen. Richard Lugar on a nuclear weapons bill.