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Obama and McCain square off over the economy

THE ASSOCIATED PRESS

July 8, 2008

DENVER - Barack Obama and John McCain agree on this much: The economy is staggering under the Bush administration, and Americans are hurting. But they part ways on how to fix it, as they made clear in dueling economic speeches yesterday.

Obama said McCain offers "exactly what George Bush has done for the last eight years. The progress we made during the 1990s was quickly reversed by an administration with a single philosophy that is as old as it is misguided: reward not work, not success, but pure wealth," Obama said.

Grounded by plane trouble in St. Louis, he phoned his remarks to a gathering in Charlotte, N.C.

While calling Obama's plans expensive and unwise yesterday, McCain tried to distance himself from President George W. Bush where he could.

"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."

McCain promised to veto "every single bill with wasteful spending."

McCain, who has said the economy is not his strong suit, 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 calls the plan a gimmick that will not lower gasoline prices, and favors tax cuts for middle-class workers and tax increases for top earners.

Obama also renewed his call for a $50-billion "second stimulus package that provides energy rebate checks for working families, a fund to help families avoid foreclosure, and increased assistance for states that have been hard-hit by the economic downturn."

He said he would eliminate income taxes for retirees making less than $50,000 a year. People still working, he said, would be automatically enrolled "in a workplace pension plan that stays with you from job to job.

McCain's plans include doubling the child tax deduction from $3,500 to $7,000 "for every dependent." He also cited his plans to cut the estate tax, although Democrats note that it applies to few Americans.

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 American Free Trade Agreement.

He said yesterday 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."