Obama ahead in polls as debate looms

Five days from their first presidential debate, Democrat Barack Obama has climbed in the polls as Republican John McCain fumbled his response to a looming US economic cataclysm.

The US Congress and the administration of president George Bush are grappling with a proposed £389bn (€491.5bn) bailout plan to save the US economy from full collapse - feeding anxiety among voters who were already far more concerned about their financial futures than any other issue in the 2008 presidential campaign - including the intractable US-led wars in Iraq and Afghanistan.

After withholding his response while the Bush administration put together its programme, Mr Obama placed seven conditions on the rescue proposal which he said came with a "staggering price tag" but no plan to guarantee the "basic principles of transparency, fairness, and reform" to taxpayers who will pay for the huge bailout.

The Bush administration is pressing Congress to pass the bailout measure by the end of this week, even as Mr Obama joined others in Congress in suggesting the proposal faced obstacles to quick enactment.

"This plan can't just be a plan for Wall Street, it has to be a plan for Main Street. We have to come together, as Democrats and Republicans, to pass a stimulus plan that will put money in the pockets of working families, save jobs, and prevent painful budget cuts and tax hikes in our states," Mr Obama said during a campaign stop in North Carolina.

However, Mr McCain told an audience that Mr Obama behaved more like a politician than a leader, both on matters of national security and on last week's near-meltdown of the US financial system.

"Whether it's a reversal in war, or an economic emergency, he reacts as a politician and not as a leader, seeking an advantage for himself instead of a solution for his country," Mr McCain said of his Democratic rival.

Aides said Mr Obama had spoken to US Treasury secretary Henry Paulson, Federal Reserve chairman Ben Bernanke, congressional leaders and Bill and Hillary Clinton in fleshing out his approach to the bailout.

Obama was speaking in North Carolina, a Republican-leaning state he hopes to win in November. After the rally he was returning to Chicago for fundraising and a campaign swing through Wisconsin, a Democratic-leaning state he needs to win.

On Saturday, as the depth of the US financial crisis was settling in on the country, Mr Obama declared Mr McCain was in a panic, realising that he and his Republican party were philosophically responsible for the near meltdown of the US financial system.

The Arizona senator, a 26-year veteran of Congress, hit back that his first-term Illinois Senate colleague was resorting to scare tactics.

But Mr McCain faces the daunting task of trying to square his long history of advocating corporate and financial deregulation - the sort of loose controls many blame for the turmoil on Wall Street.

Mr Obama seized on that during a campaign appearance at Bethune-Cookman University in Florida. "There's only one candidate who's called himself 'fundamentally a deregulator' when deregulation is part of the problem," Mr Obama said.

Mr McCain now says more controls are needed to prevent a repeat of the turmoil that sent the stock market plunging, as he tries to recover from a series of gaffes this week, starting with his Monday assessment that US economic fundamentals were strong.

National polls indicate that McCain's edge in the US presidential race has slipped since the market upheaval.

The latest Gallup Poll daily tracking survey also showed Mr Obama ahead, with 50% to Mr McCain's 44%. Last Sunday, a day before stocks took a dive on Wall Street, Mr McCain and Mr Obama were in a statistical dead heat with Mr McCain's 47% against Mr Obama's 45%.

Both candidates are busy preparing for their first nationally-televised debate on Friday at the University of Mississippi, which offers Mr McCain a chance to reverse his recent slide in the polls.