No bailout means disaster, McCain says

INDEPENDENCE, Mo., Oct. 1 (UPI) -- Disaster looms if the U.S. Congress cannot pass a bill to bailout the financial markets, Sen. John McCain, R-Ariz., said Wednesday.

"If we fail to act, the gears of our economy will grind to a halt," the Republican presidential nominee said during a campaign event in Independence, Mo.

McCain told the audience he would return to Washington later Wednesday to vote on the Senate's $700 billion bill to stabilize the financial markets.

"If the financial rescue bill fails in Congress yet again, the present crisis will turn into a disaster," he said.

Saying the original proposal by U.S. Treasury Secretary Henry Paulson was flawed, McCain said he was pleased that provisions on taxpayer protection, stronger oversight and limits on executive compensation were added.

The U.S. House voted down the measure Monday. Last week, McCain and Democratic presidential nominee Barack Obama traveled to Washington to discuss the crisis with congressional leaders, President George Bush and others from the administration.

Leaders in Washington also must recognize that the bailout also has "serious implications for future spending," McCain said.

If elected president, McCain said he would impose a one-year spending freeze "on every agency of the federal government, excepting only national defense, the care of our veterans, and a few critical priorities."

"Leadership requires candor," McCain said. "And I will tell you bluntly that America is already ($10 trillion) in debt, and to make our economy strong again we must reduce the burden of federal spending. ... I am committed to billions in spending reductions that will balance the budget, and get us on the path away from ruinous debt."