Obama and McCain clash over economy

The US presidential race spotlight returned to the top candidates as Barack Obama and John McCain traded accusations over whose policies were to blame for America’s deepening economic woes.

One day after the vice presidential debate failed to reshape the presidential race, both White House hopefuls turned their attention to the issue that has dominated the campaign and voter interest – a teetering economy and a government plan to rescue Wall Street after weeks of financial upheaval.

Despite Congress’ passage of the unprecedented US$700bn (€504.8bn) financial bail-out yesterday, there was no indication that economic issues would take a back seat to other concerns.

Wall Street ended an intensely volatile week with another sell-off, and the government reported the worst monthly job losses in more than five years.

With that grim economic backdrop, Mr Obama, the Democratic contender, is seeking to solidify his lead in national and battleground polls, while Mr McCain looks for a game-changing development to close a gap that grew in part as he struggled to respond to the financial crisis.

Mr Obama used the ugly job news to argue that the policies of his Republican opponents “are killing jobs in America every single day”. Republican Mr McCain retorted that Mr Obama’s tax and spending plans would not solve the problem.

The Illinois senator encouraged voters to change Republican leadership in the White House, continuing a theme of tying Mr McCain to the unpopular President George Bush.

He disputed vice presidential candidate Sarah Palin’s debate claim that his economic plan would be a job killer.

“When Senator McCain and his running mate talk about job killing, that’s something they know a thing or two about,” Mr Obama said. “Because the policies they’ve supported and are supporting are killing jobs in America every single day.”

His comments at a rally in the battleground state of Pennsylvania came as the government reported employers cut 159,000 jobs last month, marking the ninth straight month of job losses.

Hours later at a town hall meeting in Pueblo, Colorado, Mr McCain himself said Mr Obama’s plans would hurt the economy.

“He wants higher taxes, more government, higher spending, and frankly that record is not something which has been good for America and we won’t let it happen,” Mr McCain said.

The McCain campaign launched a new national TV ad yesterday repeating his criticisms of Mr Obama’s tax plans.

Mr Obama is proposing tax increases only for those earning more than $250,000 (€180,310) but would cut taxes for those earning less – details that Mr McCain and Mrs Palin do not mention.

Polls show Mr Obama has made progress in persuading voters that he is ready to be president and that Mr McCain would continue Mr Bush’s economic policies. But the Illinois senator still has work to do to lock down his lead in case outside events or campaign blunders change the campaign conversation.

Mr Obama planned to continue to use the economy and Mr McCain’s 90% support for Mr Bush in the Senate to hammer his opponent and to argue that the Republican ticket has failed to articulate how it would be different from the current administration. Aides still view the race as very close.

Mr McCain’s campaign is trying to regroup from a disastrous two weeks. As Wall Street crumbled, Mr McCain struggled to strike the right note. Mrs Palin’s qualifications came under fire from Republican critics after she appeared ill-informed in TV interviews.

The Republican nominee’s poll numbers slipped everywhere, dropping so far in Michigan that the campaign pulled the plug. It diverted resources elsewhere, even moving to shore up Republican bastions like Indiana and North Carolina.

Mrs Palin told Fox News yesterday that she disagreed with the decision to abandon the effort in Michigan, a campaign move she only learned about yesterday morning when she read it in the newspapers.

“I want to get back to Michigan and I want to try,” said Mrs Palin, who acknowledged that polls in the state show Mr Obama outdistancing Mr McCain.

Mr McCain’s advisers argued that Mrs Palin’s debate performance against Mr Obama’s running mate, veteran senator Joe Biden, quieted Republican critics and reassured other sceptics enough to stop Mr McCain’s slide, but it was too early to know for sure.

His advisers say that now that the bail-out has been approved in Congress Mr McCain will go hard on Mr Obama by emphasising liberal positions Mr Obama has taken in Senate votes.