Obama says he may rein in spending plans

WASHINGTON -- Democrat Barack Obama said Tuesday the deepening American financial crisis and prospect of a massive government bailout meant he likely would have to delay expansive spending programs outlined during his campaign for the White House.

In an interview with NBC television, Obama said he would have to study what happens to the United States' tax revenues before making decisions on budgeting for his promised initiatives on national health care, education, energy and other concerns.

As the Bush administration and Congress negotiated details of a $700 billion financial rescue plan, Obama said the problem should be dealt with as a short-term crisis with bipartisan action and then as a long-term structural issue.

"Although we are potentially providing $700 billion in available money to the Treasury, we don't anticipate that all that money gets spent right away and we don't anticipate that all that money is lost. How we're going to structure that in budget terms still has to be decided," Obama told NBC's "Today" show in an interview aired Tuesday.

"Does that mean I can do everything that I've called for in this campaign right away? Probably not," he said. "I think we're going to have to phase it in."

As anxious American voters and financial barons awaited the government financial rescue, Obama was also preparing for the first presidential debate and unleashed tough new TV ad that charges Republican opponent John McCain had protected tax breaks for corporations that hide profits offshore.

Obama was forgoing campaign appearances to bone up for the debate on Friday, while McCain had a full campaign schedule in the key battleground states of Ohio and Michigan. His running mate, Alaska Gov. Sarah Palin, was at the United Nations General Assembly for meetings with Afghan President Hamid Karzai, former Secretary of State Henry Kissinger and Colombian leader Alvaro Uribe.

The meetings were designed to introduce the once-little-known vice presidential nominee to the world community and to counter claims she has no grounding in foreign affairs.

With U.S. voters consumed with the economy above all other issues confronting the candidates in the 2008 presidential race, Obama lashed out in the television advertisement that was to play to a national audience on cable television.

Without mentioning dates or the companies involved, the commercial implies McCain went to the Atlantic island of Bermuda with corporate executives and while he was there "pledged to protect tax breaks for American corporations that hide their profits offshore. And grateful insurance company executives and their lobbyists who benefit from the tax scheme, gave McCain $50,000."

There was no immediate response from the McCain campaign. The attack on McCain was only the latest in a series of increasingly negative television spots by both sides in the historic and close contest for the White House.

The McCain campaign released its own television ad Tuesday, accusing Obama of staying quiet and refusing to present a solution for the financial crisis while McCain was outlining an economic recovery plan.

Stunning financial turmoil gripped the nation for a second week as voters awaited their first chance to watch the candidates debate -- a confrontation over foreign affairs and national security at the University of Mississippi -- with just six weeks remaining in one of the most prolonged U.S. presidential campaigns.

McCain, an Arizona senator with 26 years in Washington, heads into the face off as the favorite, given his long experience and extensive global travel. Polls show Obama holds a slight lead as the candidate best able to fix the economy.

During a Monday campaign appearance in Green Bay, Wisconsin, another key battleground state, the first-term Illinois senator said the financial crisis was the worst since the 1930s Great Depression. He said the Bush administration plan for a $700 billion bailout to put a floor under the crashing financial system needed far more oversight than had been outlined by Treasury Secretary Henry Paulson.

While decrying Republican handling of the economy and charging McCain would only oversee a continuation of failed Bush administration policies, Obama sounded a number of populist themes, asserting that Congress could not "give a blank check to Washington with no oversight and accountability when no oversight and accountability is what got us into this mess in the first place."

Obama also stole a page from McCain's playbook by moving to claim the mantle of fiscal responsibility in a roiling economy, vowing to slash federal spending on contractors by 10 percent and saving $40 billion. He singled out Haliburton, the giant oil services company that won millions of dollars in no-bid contacts. Vice President Dick Cheney ran the company before moving into the Bush administration.

Urging members of his own party to be just as fiscally tough as the most conservative Republicans, Obama said the $700 billion economic bailout plan proposed by the Bush administration and congressional leaders is forcing a renewed look at federal spending.

As president, Obama said he would create a White House team headed by a chief performance officer to monitor the efficiency of government spending.

McCain, who only a week ago said the U.S. economy was fundamentally sound, agreed on the need for oversight of the proposed bailout, declaring to supporters in Scranton, Pennsylvania: "Never before in the history of our nation has so much power and money been concentrated in the hands of one person. This arrangement makes me deeply uncomfortable."

He called for a bipartisan board to be headed by Warren Buffet or another respected business leader to watch over the bailout plan that would be run by Treasury Secretary Henry Paulson, an old-hand on Wall Street. The proposal would allow the government to take over bad debts accrued to the financial industry in hopes that would free up credit needed to keep the economy afloat.

Congressional leaders reported progress in negotiations with the White House on Monday, claiming there was broad agreement on the need for oversight and the inclusion of a program to aid citizens facing mortgage foreclosure on their homes.