McCain switches campaign to the economy

Republican presidential candidate John McCain will unveil new economic proposals today aimed at helping middle-class Americans as he fights to make up a slump in the polls.

He vowed to make an underdog-style comeback to overcome Barack Obama’s lead in the campaign’s final three weeks.

But Mr Obama beat his rival to the punch yesterday by proposing immediate steps to heal the ailing US economy, including a 90-day moratorium on home foreclosures at some banks and a two-year tax break for businesses that create new jobs.

With the economic turmoil weighing down his Republican rival, Mr Obama also proposed improved retirement benefits and a government fund for loans to states and cities facing mounting deficits through declining tax revenues in what is feared will be a prolonged and deep recession.

A McCain campaign spokesman said that his proposals to be introduced today “will address the ongoing financial and economic crisis, with a special emphasis on those most badly hurt: workers, homeowners, savers and seniors”.

Under criticism from fellow Republicans, Mr McCain reset his campaign strategy yet again with a new speech that eased harsh attacks against Mr Obama while at the same time delivering some of his toughest criticism so far of President George Bush’s economic policies.

“We cannot spend the next four years as we have spent much of the last eight: waiting for our luck to change. The hour is late; our troubles are getting worse; our enemies watch. We have to act immediately. We have to change direction now. We have to fight,” he said.

In an interview with CNN, Mr McCain was asked about his campaign’s recent tactic of attacking Mr Obama for his association with William Ayers, a founder of the radical Vietnam War-era Weather Underground, which was responsible for bomb attacks on federal buildings.

Mr Obama has denounced Ayers’ radical past and actions. He was eight years old when they occurred.

The two men subsequently served together on the board of a Chicago education foundation and live in the same area. Ayers hosted a small coffee morning for Mr Obama when he first ran for public office in Illinois.

“The fact is that Senator Obama was not truthful in telling the American people about his relationship,” Mr McCain said.

Mr McCain’s fortunes have been battered by the US financial crisis. At first the veteran Arizona senator sought to distract attention from his perceived weakness on the economy by attacking Mr Obama. Running mate Sarah Palin accused the Democrat of “palling around with terrorists”.

The latest shift in the campaign appears to have grown out of the realisation that the assaults were not hindering Mr Obama’s rise in the polls.

Mr McCain compared Mr Obama to Herbert Hoover, the Republican who was president when the stock market crashed in 1929 triggering the Great Depression.

“The last president to raise taxes and restrict trade in a bad economy as Senator Obama proposes was Herbert Hoover. That didn’t turn out too well,” Mr McCain said.

Mr Obama now leads in enough states to be within reach of the 270 Electoral College votes needed for victory while Mr McCain is being forced to defend Republican turf where polls show the race close.