Campaign promises unlikely to hold up in wake of bailout

WASHINGTON -- No matter who is elected president, budget experts say Republican nominee John McCain and his Democratic rival, Barack Obama, will have a harder time fulfilling their campaign promises because of the federal government's effort to calm the mortgage and credit markets.

"Both are going to be shocked by the size of the deficit they are going to inherit," said Leon Panetta, a Democrat who headed the House Budget Committee and then served as President Clinton's budget director and chief of staff.

On Monday, both candidates indicated they would support a bailout only with conditions.

"We must work quickly, in a bipartisan fashion, to resolve this crisis and avert an even broader economic catastrophe," Obama told a Green Bay, Wis., audience Monday. Like Senate Majority Leader Harry Reid and Speaker Nancy Pelosi, the top Democratic leaders in Congress, Obama is insisting on an additional economic stimulus bill and relief for homeowners facing foreclosure.

Speaking in Scranton, Pa., McCain said the Bush administration's proposal "makes me deeply uncomfortable" because "so much power" would be in the hands of the Treasury secretary. He proposed a bipartisan oversight board. Both McCain and Obama favor caps on the compensation of executives in bailed-out companies.

Though the federal government could end up making money when it begins to sell assets of the bailed-out companies, the deal will at least temporarily balloon the federal deficit. That will make the first year of the next administration "a very difficult time in terms of starting new programs," said former senator Warren Rudman, a New Hampshire Republican who co-founded the bipartisan Concord Coalition to lobby for deficit reduction.

The White House estimates the deficit will be $482 billion when the next president takes office on Jan. 20. Panetta estimates that figure could jump to $700 billion because of the bailout.

"This is a tough bill of goods, whether it's John McCain or Barack Obama," agreed House Budget Committee Chairman John Spratt, D-S.C.