U.S. presidential candidates Barack Obama and John McCain on Tuesday proposed the Bush administration to raise federal insurance for bank deposits from the current 100,000-U.S.-dollar limit to 250,000 dollars.
In separate telephone talks with President George W. Bush, both candidates said the move will make the 700-billion-dollar financial rescue package more palatable to House Republicans, who torpedoed the measure Monday.
Obama argued that expanding the Federal Deposit Insurance Corp.(FDIC) guarantees of deposits will help small businesses meet payrolls and maintain liquidity.
The current limit of 100,000 dollars hasn't been lifted in 28 years, and hasn't been adjusted for inflation, he said.
The Democrat said the proposal will potentially broaden support for the legislation.
Republican McCain told Fox News that he talked to Bush and recommended an increase in the federal deposit insurance.
He also urged the president to bypass the Congress by using the Treasury Department's 250-billion-dollar Exchange Stabilization Fund to shore up financial institutions.
The proposals to expand deposit insurance was a clear sop to some Republicans who are against the rescue passage.
They now said that insurance, rather than an outright purchase of mortgage securities by the federal government offers a more measured response to the current financial crisis.
Source: Xinhua
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