The article, which appeared under Sen. McCain's name, included a favorable reference to banking deregulation that, in light of this week's near-meltdown in the financial industry, provided an irresistible target for Sen. Obama's campaign and once again put McCain on the defensive. McCain's campaign accused Obama of manufacturing an attack by deliberately misreading the Republican's words.
The article was published in Contingencies magazine, which is produced under the auspices of the American Association of Actuaries. In it, McCain touted his plans for increasing competition in health care as one way to expand coverage and reduce costs.
McCain wrote, "Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation."
Obama, appearing at Bethune-Cookman University in Daytona Beach, Fla., mocked his rival for sounding out of touch at a time when Washington is moving rapidly to re-regulate the financial industry to curb the excesses that put the system into near-paralysis in the past week.
"So let me get this straight -- he wants to run health care like they've been running Wall Street," Obama told the audience. "Well, Senator, I know some folks on Main Street who aren't going to think that's such a good idea."
The Obama campaign first learned of the McCain article when New York Times columnist Paul Krugman referenced it Friday night on his blog. Since then, officials in the campaign have spread its contents as quickly as possible.
McCain's campaign, caught off guard by the uproar caused by the article, called the criticism from Obama a red herring. What McCain was referring to, one of his advisers said, was the change in regulations that allowed banks to operate across state lines, thereby opening up more competition while providing easier access to services for consumers.
"This is absurd," McCain senior economics adviser Doug Holtz-Eakin wrote in an e-mail sent to reporters. "If Barack Obama thinks that today's financial troubles were caused by policies which allowed Americans to use an ATM anywhere in this country, then it is better that he continue to be silent about solutions to the crisis on Wall Street. That crisis arose from corruption and regulators asleep at the switch. It's also possible Senator Obama is simply a dishonest politician who will say anything to get himself elected and just isn't ready to be President."
Coming only a few days after McCain had defended the economy as "fundamentally strong" as the stock markets were plunging last Monday, however, this latest episode underscored anew the extent to which the economic crisis has put McCain on the defensive.
McCain moved immediately to deal with his comment about the economy's fundamental soundness, and over the next several days he pushed an increasingly populist message that emphasized the tough times Americans are facing and called for cracking down on corruption and greed on Wall Street.
Obama unloaded on McCain during appearances Saturday. He fired back at McCain for running ads linking him to former top executives of Fannie Mae, James A. Johnson and Franklin Raines. Johnson briefly headed up Obama's vice presidential search team but stepped aside when controversy arose over his role at Fannie Mae. Raines recently settled with the government after being tagged in a huge financial scandal at the mortgage financing institution.
Obama said he had met Raines only once and talked to him for about five minutes, denying that Raines played any real role in the campaign. Raines issued a statement this week saying he had not been an adviser to the campaign.
Instead, Obama cited comments by the former head of Fannie Mae's government relations office, who was quoted by Politico.com as saying, "When I see photographs of Sen. McCain's staff, it looks to me like the team of lobbyists who used to report to me."
"Folks," Obama told his audience in Daytona Beach, "you can't make this stuff up."
With millions of Americans worrying about their retirement security as federal officials rushed to stabilize the shaky financial system, Obama also seized on McCain's support for partial privatization of Social Security. He said McCain was prepared to gamble with people's life savings.
"If my opponent had his way, the millions of Floridians who rely on it would've had their Social Security tied up in the stock market this week," he said. "Millions would've watched as the market tumbled and their nest egg disappeared before their eyes. Millions of families would've been scrambling to figure out how to give their mothers and fathers, their grandmothers and grandfathers, the secure retirement that every American deserves."
The statement appeared to be a substantial exaggeration, and the McCain campaign quickly fired back.
McCain spokesman Tucker Bounds accused Obama of not telling the truth.
"John McCain is 100 percent committed to preserving Social Security benefits for seniors, and Barack Obama knows it," he said in an e-mail sent out while Obama was speaking. "This is a desperate attempt to gain political advantage using scare tactics and deceit."
Bounds pointed out that Obama has expressed support for government support for private accounts that would be an accompaniment to Social Security and said the senator's remarks were "a perfect demonstration of his willingness to ignore facts in favor of his own self-promotion."
