Newsweek special report on U.S. elections 2008 (Part 5)

against American workers. This spin was so outrageous that the regular traveling press laughed out loud.
McCain, the fighter pilot, began to swoop and veer. On the “Today” show, he declared, “We are in crisis. We are in total crisis.” He called for a 9/11-style commission to investigate what exactly had gone wrong. He was ad-libbing; his staff was caught by surprise. Obama attacked again, mocking McCain for offering up “the oldest stunt in the book—you pass the buck to a commission to study a problem.” McCain never mentioned the commission again.

But he continued to lurch. He announced that as president he would fire Chris Cox, the chairman of the Securities and Exchange Commission. It was pointed out to him that the president does not have the power to fire the SEC chairman, who serves a fixed term. McCain, now in forgiveness mode, called Cox a “good man” but said he would ask for his resignation anyway.

McCain’s campaign slogan, “Country First,” was more than a slogan to McCain. It was his life and his family’s legacy. So when the crisis deepened, and Treasury Secretary Henry Paulson announced that the administration would ask Congress to pass a $700 billion bill to rescue the foundering financial institutions, McCain’s instinct was to plunge in. He saw himself as Teddy Roosevelt, “the man in the arena,” but he became the butt of late-night ridicule.

On the morning of Sept. 24, Barack Obama tried to call McCain to discuss a joint statement, a kind of let’s-rise-above-politics declaration endorsing the bailout bill. Obama had been talking by phone to Paulson and Federal Reserve chairman Ben Bernanke. Obama’s cautious instincts told him he should stay out of the negotiations between Congress and the administration. He told his aides that he did not want to say anything beyond enunciating some broad principles (the need for bipartisan oversight, for helping Main Street as well as Wall Street, for cutting off golden parachutes for executives seeking federal aid). Obama had been impressed by the sincerity—and the deep worry—of the administration’s top moneymen, and he didn’t want to politicize the delicate bargaining process. He contemptuously referred to George W. Bush’s reign as “the incredible shrinking presidency.” In his deliberate way, he wanted to try to engage his opponent in a moment of nonpartisan calming of the waters.

But McCain took his time returning Obama’s phone call. McCain’s aides would later say that he didn’t want to talk to Obama until he had firmed up his own plans. At about 2:30 that afternoon, McCain called Obama and told him that he was thinking of suspending his campaign, asking to postpone the first debate (scheduled for two days later) and heading to Washington to join the negotiations. About five minutes after the two men hung up, McCain went public with his plans. Obama’s advisers were flabbergasted. In the ever-paranoid view of rival campaigns, they thought that McCain was somehow trying to set up Obama—at first refusing his phone call, then springing on him this elaborate plan to head back to Washington and suspend the campaign. Meeting with reporters, Obama seemed slightly perplexed by McCain’s to-ing and fro-ing, saying that he saw no need to put off the debate—that presidents had to be able to do two things at once, and America needed to hear from the candidates now more than ever.

Scheduled to go on David Letterman that night, McCain canceled. But instead he gave an interview with Katie Couric of CBS. The late-night comic was merciless, mocking McCain for saying that he was rushing back to Washington when he was actually over in the makeup room at CBS. Letterman portrayed McCain as a doddering fool whose Metamucil had been spiked.

McCain was in a difficult place. Like Obama, he had taken seriously the warnings that the whole financial system was in peril, and that if Congress failed to pass a rescue package by Monday, a catastrophic credit crisis loomed. At the same time, he knew from friends on Capitol Hill that House Republicans were leery of the administration’s bailout plan. If he stayed aloof, and the bill failed, he knew he’d get blamed. Unlike Obama, he could not float above the fray. “Getting involved was the only move we could make,” Salter later said. But McCain’s romantic, take-charge streak clouded his political judgment. He may have seen himself rushing back to Washington to save the day, but Washington didn’t want him—not just the Democrats, but his own Republicans brushed him off. By seeking ethics reform and a compromise on immigration in 2007, McCain had antagonized many hard-line Republican congressmen. No Republican leaders rallied to McCain when he arrived in the Capitol. “They don’t like him very much,” a McCain aide ruefully acknowledged. McCain called Senate Majority Leader Harry Reid to tell him his plan, and the Democratic leader coldly read from a press release accusing McCain of coming to Washington to stage a “photo op.” “C’mon, Harry,” McCain privately protested to Reid, whom he had known for almost three decades. (Hanging up, McCain just laughed and shook his head.) McCain had asked Bush to summon all the congressional leaders and political candidates to the White House, but the session turned into an angry farce. After the Democrats had spoken, Bush turned to John Boehner, the Republican leader in the House. Boehner told the president he couldn’t muster the Republican votes necessary to pass the bill. Shouting broke out. Barney Frank, the outspoken Democrat and chairman of the House banking committee, demanded to know where McCain stood. McCain remained uncharacteristically silent. He did not want to cross his fellow Republicans. (McCain later told his aides that as the shouting began, he wondered, “What the hell is going on?” and felt as if he had wandered into a freak show.) Obama just shook his head when he reported back to his aides. He told them that Treasury Secretary Paulson had gotten down on one knee to beg House Speaker Nancy Pelosi not to blow up the deal. “Henry, I didn’t know you were Catholic,” she said. She told him to go beg the House Republicans.

Thrown off track, the negotiations resumed again the next day, Friday, and McCain decided he could go to the debate after all. But when he returned to Washington from the debate on Saturday and asked to be included in the negotiations, he was rebuffed. McCain worked the phones anyway, trying to muster support for the bill. When the bailout legislation went down to embarrassing defeat that Monday, McCain’s inability to rally his own party was painfully obvious. Not even the four Arizona congressmen, all of whom had endorsed McCain, voted for it.

Next: During the debates, McCain bridled at reducing his views to sound bites, while Obama prepped as though he was taking the bar exam.

[Click here for Part 6]