Santa Ana, CA — Sen. John McCain called for a cautious approach to the current economic situation, criticizing Democratic proposals for increased government intervention as he laid out his economic principles before a group of Golden State business leaders.

“I have always been committed to the principle that it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers. Government assistance to the banking system should be based solely on preventing systemic risk that would endanger the entire financial system and the economy,” McCain said in a speech before about 300 small business leaders before taking questions from the group. “Any assistance for borrowers should be focused solely on homeowners…(and) must be temporary and must not reward people who were irresponsible at the expense of those who weren’t.” (Full remarks below)

While noting that he is open to “any and all proposals” and he will not “allow dogma to override common sense,” he dismissed Sen. Hillary Clinton’s proposal for the creation of a $30 billion federal fund to buy out troubled mortgages.

“I am open to ideas. That idea, I believe, is a very expensive one. I don’t believe it works. And I’d like to know how its paid for,” McCain told reporters after the event.

McCain also expressed optimism during the roundtable that he is “hopeful that the worst is over,” noting that yesterday’s housing reports showed a “little glimmer of hope.”

“I believe I can tell you that I think that perhaps we are seeing the worst of…(the) subprime lending crisis which then led to the collapse or dramatic fall..in home values,” he said. “I think we may be seeing the beginning of the end of that.”

Among the immediate policy proposals McCain called for Tuesday:

• the nation’s top mortgage lenders to meet and “do everything possible to keep families in their homes and businesses growing.
• top accounting professionals to assess current systems.

The initial remarks took on a more formal feel than most McCain campaign events–with the AZ Senator delivering prepared remarks using a teleprompter.

At an availability later Tuesday, Clinton responded to McCain’s speech as a plan for “further inaction.”

“It sounds remarkably like Herbert Hoover and I don’t think that’s a good economic policy. We have a framework of regulation, it needs to be updated and modernized. The government has a number of tools at its disposal that are well-suited for just this situation,” she said. “I think that inaction has contributed to the problems we face today and I believe further inaction would exacerbate those problems…I don’t think it’s an adequate response to say the government shouldn’t be helping either banks or people because I think that would be a downward spiral that would cause tremendous economic pain and loss in our country and I don’t see why we should wait by for that to happen.”

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