Obama, McCain duel over economy

July 8, 2008 8:58:19 AM PDT
Democrat Barack Obama and Republican John McCain are battling to convince Americans that they are most qualified to lead the country out of its profound economic slump, the issue that has shot past the Iraq war as first among concerns weighing on U.S. voters. Both presidential candidates were taking that message to an increasingly important group of voters Tuesday in separate appearances at the League of United Latin American Citizens' national convention. Hispanics traditionally skew to the Democrats but were important to President George W. Bush's election as a Texas governor and to his two presidential campaigns.

McCain, the Arizona senator, carries the particularly heavy burden of his party's control over the White House while the country suffers under staggering increases in fuel costs, a mortgage crisis that has seen tens of thousands of Americans lose their homes to foreclosure, rising food prices and growing unemployment.

Each candidate is trying to portray himself as most in tune with the needs of a middle class smarting from tenuous economic times - and the other as out of touch.

It was in that vein that Obama castigated McCain on Tuesday as he announced fresh proposals to change bankruptcy laws to "fast-track" the process for military families, help seniors keep their homes, and protect people recovering from natural disasters.

"Like the president he hopes to succeed, Sen. McCain does not believe the government has a real role to play in protecting Americans from unscrupulous lending practices," Obama said in remarks before a few thousand people in a high school gymnasium outside of Atlanta. "He would continue to allow the banks and credit card companies to tilt the playing field in their favor, at the expense of hardworking Americans."

McCain spokesman Tucker Bounds responded in a statement: "Eighteen Democrats and John McCain worked together on the bipartisan Senate bankruptcy bill, and Barack Obama's rigid partisanship and self-promoting political attacks show that he's a typical politician - which is the problem in Washington, not the solution."

Seeking to erase his links to President George W. Bush - a theme hammered repeatedly by Obama - McCain sought to put distance between him and the unpopular American leader he wants to succeed in the White House.

"This Congress and this administration have failed to meet their responsibilities to manage the government," McCain said in Denver. "Government has grown by 60 percent in the last eight years. That is simply inexcusable." At the same time he promised to reign in congressional spending by vetoing "every single bill with wasteful spending."

McCain has said the economy is not his strong suit, and on Monday he seemed eager to show a deeper understanding of the topic, even as he dismissed experts.

"Some economists don't think much of my gas tax holiday," he said of his plan to temporarily suspend the federal levy on motor fuels. "But the American people like it, and so do small business owners."

Obama says the measure is a gimmick that would save Americans virtually nothing while robbing the federal treasury of money needed to improve the creaking transportation infrastructure.

The first-term Illinois senator kept up the attack on Monday in St. Louis, where his plane made an unscheduled stop because of mechanical problems that forced him to cancel an appearance in Charlotte, North Carolina.

"John McCain's policies are essentially a repeat, a regurgitation of what we've been hearing from the Republican Party over the last two decades, maybe three. It's part of the reason that we're in the situation that we find ourselves in right now."

Obama favors tax cuts for middle-class workers and tax increases for top earners. He calls for substantial government subsidies for health care, college, retirement and alternative energies.

McCain pledges to cut taxes for all and raise them on none. Government should shrink, not grow, he told his audience in Denver, where the Democrats are holding their national convention in late August.

Aides to McCain said he would balance the budget by the end of his first term, although Obama said the Republican has not come close to explaining how he would do so. McCain has given mixed signals in recent months over whether he would make it a priority to balance the budget within four years, a goal that most economists consider to be at odds with McCain's call for continued tax cuts.

McCain restated his support of free trade, though acknowledging it "is not a positive for everyone." He promised to retrain workers who lose their jobs to overseas plants.

Obama has said he would revisit major trade pacts such as the North America Free Trade Agreement. He said in Monday's prepared remarks that he believes in free trade, but the cause is not helped "when we pass trade agreements that hand out favors to special interests and do little to help workers who have to watch their factories close down. There is nothing protectionist about demanding that trade spreads the benefits of globalization as broadly as possible."