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Obama focusing on domestic economy

Barack Obama and Treasury Secretary Henry Paulson discussed the mortgage crisis Tuesday and the steps the government is taking to shore up the faltering economy.
Obama 2008
Democratic presidential candidate, Sen. Barack Obama, D-Ill., is turning his attention back to the U.S. after his trip abroad.AP
/ Source: The Associated Press

Democratic presidential candidate Barack Obama and Treasury Secretary Henry Paulson discussed the mortgage crisis Tuesday and the steps the government is taking to shore up the faltering economy, his campaign said.

Obama met later with Federal Reserve Chairman Ben Bernanke, part of his latest effort to shift his campaign’s attention to domestic issues following a weeklong trip to the Middle East and Europe. Since returning to the U.S., Obama has talked about little else than the struggling economy.

The Illinois Democrat was to meet with with Bernanke for an hour, and his campaign said it would issue a statement about the meeting. Bernanke was leaving the descriptions of the meeting to the campaign.

Obama called the Treasury secretary as he rode to a meeting with Pakistan’s new prime minister, according to the Obama campaign. As part of the government’s effort to provide mortgage relief to hundreds of thousands of homeowners, Paulson has sought emergency power to rescue lending giants Fannie Mae and Freddie Mac.

The housing plan Congress approved last week and President Bush has promised to sign into law would provide mortgage relief for 400,000 homeowners who can’t afford their payments. Rather than lose their homes, they will be able to refinance with more affordable loans backed by the government.

“Sen. Obama asked how the Treasury Department plans to use its new authority with Fannie Mae and Freddie Mac and whether the government has the tools it needs to address the challenges in the banking industry,” the campaign said in a statement “Sen. Obama believes that the new housing legislation should be used as a way to protect homeowners and not bail out shareholders or managers.”

Obama also met Tuesday with Pakistan’s new leader, Prime Minister Yousuf Raza Gilani, amid intense security at the posh Willard Hotel. The entire street in front of the hotel was barricaded, and a tent had been constructed over its entrance. Reporters were kept on the street, and the campaign had no plans to release details of their meeting.

Obama said at a fundraising luncheon that he told Gilani that “the only way we’re going to bee successful in the long term in defeating extremists ... is if we are giving people opportunities. If people have a chance for a better life, then they are not as likely to turn to the ideologies of violence and despair.”

Bush, hosting the Pakistani leader on Monday at the White House, praised Gilani as a reliable partner in confronting extremism.

U.S.-Pakistan relations have been strained by the war in Afghanistan and questions about the whereabouts of al-Qaida leader Osama bin Laden, who some believe may be hiding along the Afghanistan-Pakistan border. The U.S. has been pressuring Pakistan to take action against strongholds of Taliban and al-Qaida fighters believed to be in that nation’s frontier.

Obama has called for increasing U.S. troop strength in Afghanistan and has said that as president he would take unilateral action if bin Laden were found to be in Pakistan, a statement that angered Pakistanis when Obama first made it last year.

Making the point again earlier this month, Obama said “if Pakistan cannot or will not act, we will take out high-level terrorist targets like bin Laden if we have them in our sights.”