The Note: 'A Simple Mistake'?

Oct. 9, 2008— -- John McCain was hoping that the mortgage buy-up plan that he offered during Tuesday's debate could help separate him from President Bush while also differentiating himself from Barack Obama. It now appears, however, that he may have given the Obama campaign a new opening.

Politico's Mike Allen reports that from Tuesday to Wednesday McCain changed his mortgage buy-up plan, making it "more generous to financial institutions and more costly for taxpayers."

The McCain campaign told reporters in a Tuesday issue paper that lenders "must recognize the loss that they've already suffered."

But when McCain posted the plan to his campaign website on Wednesday, that sentence was missing.

"It's another example of John McCain's erratic response to the economic crisis," Obama communications directions director Dan Pfeiffer tells ABC News.

Pfeiffer advises that Obama will respond to McCain's mortgage plan on the campaign trail, and the campaign is launching a new television ad.

"Who wins?" asks the narrator in Obama's new ad.

"The same lenders that caused the crisis in the first place. Putting bad actors ahead of taxpayers? We can't afford more of the same."

Watch it: http://my.barackobama.com/page/content/tested_ad

A McCain campaign official sought to downplay the change in the Arizona senator's plan.

"That language was mistakenly included in the initial draft and it's been corrected. It doesn't reflect the intentions of the initiative, which necessitated the correction and the removal of the sentence," a McCain official told Politico. "A simple mistake."

The reviews of McCain's plan in Thursday's papers are less than positive.

"McCain Plan Draws Doubts From Experts on Mortgages," blares the Washington Post.

"Alan Blinder, a former vice chairman of the Board of Governors of the Federal Reserve, said he and others have supported the government buying loans at a discount and then restructuring them. But buying them at face value [as McCain is now proposing] is a dramatic departure, he said."

"It is 'outright loss for the taxpayer,' said Blinder, an Obama supporter who said he has answered queries from the Obama campaign. 'I don't see why anybody, Republican or Democrat, would want to do that. Ironically, you would be giving the biggest gifts to the lenders who made the worst mortgages.'"

"Taxpayers, Not Lenders, Would Bear Costs of McCain's Mortgage Proposal," blares the New York Times.

"Beyond the costs, the proposal could encounter a backlash from voters, especially those who have had to work hard and sacrifice to keep current on their mortgage payments and who might resent bailing out fellow homeowners who got themselves into financial trouble."

The Times' Jackie Calmes notes that the funding for McCain's proposal would come from three sources: the bailout money, the FHA's separate authority to refinance up to $300 billion in mortgages, or the mortgage-finance companies Fannie Mae and Freddie Mac, which the government now owns. (On Tuesday, the McCain campaign said the plan would come strictly from the bailout money).

On the Washington Post's op-ed page, George F. Will writes that conservatives participating in MSNBC's dial group "wrenched their dials in a wrist-spraining spasm of disapproval" when McCain unveiled his plan during Tuesday's debate.

The Wall Street Journal's John D. McKinnon writes that McCain's proposal "could make winners out of investors – including predatory mortgage lenders – that the Bush administration and Congress have tried to exclude form the government's largesse."

The Wall Street Journal's editorial board is not sure whether McCain's plan to buy underwater mortgages at taxpayer expense is "the cure this patient needs."

"McCain's plan to transform Treasury into a major mortgage lender, and running the operation at a potential $300 billion loss, raises more questions than it answers," writes the Journal.

The New York Post's Nicole Gelinas writes that McCain's plan "risks disaster."

"What of people who aren't close to foreclosure, but still paid too much? McCain's idea could cost far more than even $700 billion; he should be careful in what he promises."

In the New York Daily News, J. Bradford DeLong calls McCain's plan "a giveaway to the banks."

The McClatchy story reports that "many economists objected that McCain's plan has no requirement that banks must take a loss during the refinancing of distressed mortgages."

The grim economic outlook is giving Democrats an edge in both the presidential and congressional races.

Per Politico, Democratic strategists are now optimistic that the ongoing crisis could lead to a landslide Obama victory.

"Four large states McCain once seemed well-positioned to win -- Virginia, North Carolina, Ohio and Florida -- have in recent weeks shifted toward Obama. If Obama were to win those four states -- a scenario that would represent a remarkable turn of events -- he would likely surpass 350 electoral votes."

Democratic pollster Paul Maslin tells Politico: "Barring a terrorist attack, in the face of what's happened to the United States economy, the world economy, in the last two weeks how does this trend reverse itself?"

In a sign of the Obama campaign's bullishness on Florida, the Tampa Tribune reports that deputy campaign manager Steve Hildebrand and chief general election strategist Paul Tewes have been dispatched to the Sunshine State: Hildebrand to Miami and Tewes to Ybor City.

"The AFL-CIO has expanded its presidential map to 20 states in recent days, trying to persuade voters in North Carolina and Indiana, which are typically red states," reports the Chicago Tribune's Jill Zuckman.

The Democratic momentum is equally dramatic in congressional races.

Per the New York Times, "analysts now predict a Democratic surge on a scale that seemed unlikely just weeks ago, with even some Republicans in traditional strongholds fighting for their political careers, and Democratic leaders dreaming of ironclad majorities."

The Sked:

McCain sits down with ABC's Charlie Gibson in Wisconsin as ABC's "50 States in 50 Days" tour continues with a "World News" bus tour.

McCain and Sarah Palin begin their Thursday with a joint townhall meeting in Waukesha, Wis. at 1:00 pm ET.

The Republican ticket then parts ways: McCain remains in Wisconsin for a 4:30 pm ET rally in Mosinee, while Palin heads to Ohio for a 7:00 pm ET rally in Wilmington.

Obama holds three rallies in Ohio: first in Dayton at 11:20 am ET, then in Cincinnati at 3:00 pm ET, and finally in Portsmouth at 7:30 pm ET.

Joe Biden holds three events in Missouri: first in St. Joseph at 11:30 am ET, then in Liberty at 3:45 pm ET, and finally in Jefferson City at 8:15 pm ET.

President Bush speaks at the Hispanic Heritage Month Celebration at 2:55 pm ET.

Also in the news:

The NRA, which announced its endorsement of McCain on Thursday, takes to the pages of the Nation's Newspaper with a print ad that reproduces a Hillary Clinton mailing targeting Obama for telling high-rollers in San Francisco that "bitter" small-town voters "cling to guns or religion or antipathy to people who aren't like them."

"Hillary was right," reads the NRA's ad in USA Today. "You can't trust Obama with your guns."

The AP reports that the NRA's PAC has spent at least $2.3 million on anti-Obama efforts, including more than $100,000 on the new USA Today ad.

Todd Palin has weighed in on "troopergate", submitting an affidavit in answer to questions from an investigative panel, reports ABC's Kate Snow.

Sarah Palin's husband said he makes no apologies for having many conversations about his former brother-in-law with family, friends and state officials. He admits to feeling frustrated that Trooper Wooten-- who he described as violent and unstable-- was still serving on the force.

But Mr. Palin says that he did not try to influence his wife the Governor.

"Anyone who knows Sarah knows she is the governor and she calls the shots," Palin wrote in the affidavit. "I make no apologies for wanting to protect my family and wanting to publicize the injustice of a violent trooper keeping his badge."

The entire 52-page affidavit is available here.

More on Todd Palin from the Anchorage Daily News.

Obama told ABC's Charlie Gibson on Wednesday that the McCain campaign's effort to tie him to 60's radical Bill Ayers is an attempt to score "cheap political points".

"He wasn't willing to say it to my face," said Obama.

Read more and watch the video here.

Ayers is the subject of a new 90-second web video by the McCain-Palin campaign. "Obama's friendship with terrorist Ayers isn't the issue," says the narrator of the RNC's web video. "The issue is Barack Obama's judgment and candor."

Watch it: http://www.youtube.com/watch?v=ONfJ7YSXE5w

McCain did not mince words during a Wednesday interview with Fox's Sean Hannity. Asked if he believes Obama is prepared to be president, McCain said, "I don't . . . I think he lacks the experience and the knowledge, and most importantly, the judgment that he has displayed."

Cindy McCain turned up the rhetoric on Wednesday, saying that it "sent a cold chill through my body" when Obama voted against a war funding bill that did not include a timetable for troop withdrawal.

"I would suggest that Senator Obama change shoes with me for just one day and see what it means to have a loved one in the Armed Forces," said Cindy McCain.

While on NPR on Wednesday, Obama strategist David Axelrod was pressed on an Obama stem-cell ad which has been called "misleading" by FactCheck.org.

"Isn't it false so to say he's opposed stem cell research when he doesn't?" asked NPR's Inskeep. ". . . listen to the wording of the commercial," said Axelrod. " . . . the question is, can you be certain exactly where he'll be when he's president - if he were President of the United States? And I think that's a legitimate question."

While chiding both Obama and McCain for not leveling with the public about hard choices, the Washington Post's David Broder writes that he was struck by a survey of economists reported in the current issue of The Economist.

The New York Times reports on the front page that tens of thousands of eligible voters in at least six swing states have been removed from the rolls or have been blocked from registering in ways that appears to violate federal law, according to the newspaper's review of state records and Social Security data.

The New Republic looks at the high hurdles that student voters face in Virginia.

The Los Angeles Times reports that Obama's contributions have exposed a loophole in the law, which does not require disclosure of the identities of donors who give $200 or less, "making it impossible to determine whether they are legitimate without a federal audit."

USA Today looks at the contrasting leadership styles of "cool" Obama and "bare-knuckled" McCain.

Time's Amy Sullivan looks at whether Palin has "a Pentecostal problem."

MoveOn gets a splashy write-up in the Washington Post's Style section.

Thursday was the day to look at the role political comedy is playing in the '08 campaign, with stories in the New York Times, Washington Times, and Wall Street Journal.

The Kicker:

"So you're a lot like Sarah Palin." --Jon Stewart to Michelle Obama after she said that she has stopped consuming political news

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