Republican presidential candidate John McCain proposed during Tuesday night’s debate using $300 billion of the $700 billion of the financial bailout money to buy up bad home mortgages, instead of rescuing the financial markets.

“I would order the secretary of the Treasury to immediately buy up the bad home-loan mortgages in America and renegotiate at the new value of those homes — at the diminished values of those homes — and let people be able to make those payments and stay in their homes,” he said.

Democratic nominee Barack Obama last month sounded a similar theme, proposing that the government consider taking such a step.

But McCain’s approach was far more unequivocal.

A background paper provided by the McCain campaign said the plan “could be implemented quickly as a result of the authorities provided in the stabilization bill, the recent housing bill, and the U.S. government’s conservatorship of Fannie Mae and Freddie Mac.”

It was unclear, either from McCain’s remarks or from the backup materials provided by the campaign, how such a massive plan would be administered. Though McCain, a budget hawk and critic of rising federal spending, did concede one point. “Is it expensive? Yes,” he said.

Source: The Associated Press, Jim Kuhnhenn