For rivals, finance crisis poses on-the-fly tests

By JACKIE CALMES and JEFF ZELENY

updated 9:20 a.m. ET Sept. 19, 2008

WASHINGTON - The financial crisis has turned the race between Senators John McCain and Barack Obama into an audition for who could best handle a national economic emergency.

Mr. McCain, the Republican nominee for president, called on President Bush on Thursday to dismiss the chairman of the Securities and Exchange Commission, Christopher Cox, a former Republican congressman and a Bush appointee.

Mr. McCain, who early in the week seemed to struggle to find a consistent message on the economy, also proposed a government body to relieve struggling financial institutions of some bad debt in hopes of keeping them solvent. A similar approach was being considered Thursday night by the Bush administration and Congressional leaders.

Mr. McCain is expected to lay out a broader view of his approach to the crisis on Friday morning in Wisconsin.

His Democratic rival for president, Mr. Obama, campaigning in New Mexico, issued the outlines of his own plan later Thursday. His campaign said he would fill in the details after he met Friday with his economic advisers in Miami, his next campaign stop.

The actions of both men captured how they were being forced to make policy proposals and pronouncements on the fly, from one campaign rally to another, as each day’s developments in the financial markets and in Washington were overtaken by new ones the following day.

With Election Day less than seven weeks away, the financial crisis has transformed the race, wiping away almost all other issues. In a purely political sense, the developments are highlighting economic anxiety and putting the spotlight on a topic that Democrats believe will benefit them.

As the chances increase that Congress will get involved with a plan to help take distressed assets off the books of troubled firms — and potentially put taxpayers on the hook — the politics could become even more intense and complicated, creating further challenges for Mr. McCain and Mr. Obama as they seek to be seen as in command.

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“I cannot remember a modern election in which the presidential candidates were faced with commenting on a problem of this magnitude this close to Election Day,” said Michael Berman, a Democratic Party strategist.

The candidates’ challenge parallels that of the Bush administration and federal regulatory officials who are managing the crisis. From Treasury Secretary Henry M. Paulson Jr. on down, there have been contradictory statements, false starts and emergency actions as the crisis spread from one financial institution to another.

But what is worse for Mr. Obama and Mr. McCain is that they are on the sidelines and yet expected to act as if they have the best information available. They are getting updates from economic advisers and supporters on Wall Street and also near-daily briefings from Mr. Paulson and sometimes Ben S. Bernanke, chairman of the Federal Reserve. Another complication is that the candidates have to balance the political need to look boldly presidential against the danger of further agitating the markets or stoking Americans’ anxiety.

By most accounts, Mr. Obama has the advantage, because anything that keeps voters focused on the economy is good for Democrats, since a Republican holds the White House. In Cedar Rapids, Iowa, on Thursday, Mr. McCain sought to turn that advantage against his rival, charging that Mr. Obama’s “own advisers are saying that the crisis will benefit him politically.”

The McCain campaign could not cite an example of an Obama adviser’s claiming that.

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