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updated 9/19/2008 9:20:06 AM ET 2008-09-19T13:20:06

The financial crisis has turned the race between Senators John McCain and Barack Obama into an audition for who could best handle a national economic emergency.

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Mr. McCain, the Republican nominee for president, called on President Bush on Thursday to dismiss the chairman of the Securities and Exchange Commission, Christopher Cox, a former Republican congressman and a Bush appointee.

Mr. McCain, who early in the week seemed to struggle to find a consistent message on the economy, also proposed a government body to relieve struggling financial institutions of some bad debt in hopes of keeping them solvent. A similar approach was being considered Thursday night by the Bush administration and Congressional leaders.

Mr. McCain is expected to lay out a broader view of his approach to the crisis on Friday morning in Wisconsin.

His Democratic rival for president, Mr. Obama, campaigning in New Mexico, issued the outlines of his own plan later Thursday. His campaign said he would fill in the details after he met Friday with his economic advisers in Miami, his next campaign stop.

The actions of both men captured how they were being forced to make policy proposals and pronouncements on the fly, from one campaign rally to another, as each day’s developments in the financial markets and in Washington were overtaken by new ones the following day.

With Election Day less than seven weeks away, the financial crisis has transformed the race, wiping away almost all other issues. In a purely political sense, the developments are highlighting economic anxiety and putting the spotlight on a topic that Democrats believe will benefit them.

As the chances increase that Congress will get involved with a plan to help take distressed assets off the books of troubled firms — and potentially put taxpayers on the hook — the politics could become even more intense and complicated, creating further challenges for Mr. McCain and Mr. Obama as they seek to be seen as in command.

“I cannot remember a modern election in which the presidential candidates were faced with commenting on a problem of this magnitude this close to Election Day,” said Michael Berman, a Democratic Party strategist.

The candidates’ challenge parallels that of the Bush administration and federal regulatory officials who are managing the crisis. From Treasury Secretary Henry M. Paulson Jr. on down, there have been contradictory statements, false starts and emergency actions as the crisis spread from one financial institution to another.

But what is worse for Mr. Obama and Mr. McCain is that they are on the sidelines and yet expected to act as if they have the best information available. They are getting updates from economic advisers and supporters on Wall Street and also near-daily briefings from Mr. Paulson and sometimes Ben S. Bernanke, chairman of the Federal Reserve. Another complication is that the candidates have to balance the political need to look boldly presidential against the danger of further agitating the markets or stoking Americans’ anxiety.

By most accounts, Mr. Obama has the advantage, because anything that keeps voters focused on the economy is good for Democrats, since a Republican holds the White House. In Cedar Rapids, Iowa, on Thursday, Mr. McCain sought to turn that advantage against his rival, charging that Mr. Obama’s “own advisers are saying that the crisis will benefit him politically.”

The McCain campaign could not cite an example of an Obama adviser’s claiming that.

Mr. McCain has adopted an increasingly populist tone and blamed Wall Street greed. By Wednesday, on a trip through Michigan, Mr. McCain even suggested that he would favor loans to the auto industry, an idea he had once faulted. At a General Motors plant in Orion, he said, “We are not going to leave the workers here in Michigan hung out to dry while we give billions in taxpayer dollars to Wall Street.”

On Tuesday, Mr. McCain said he would oppose a federal bailout of the insurance giant American International Group, only to endorse it as unavoidable the next day when the Federal Reserve took over A.I.G. to prevent its losses from infecting other financial institutions. Also on Tuesday, Mr. McCain proposed a “9/11-style commission” to study the problem and recommend solutions for the long term, then switched Thursday to propose the creation of a government agency as soon as possible.

Mr. McCain’s call for a new trust to relieve troubled financial companies of their bad loans — much like the Resolution Trust Corporation, which was created after the savings and loan crisis of the late 1980s — dramatizes how far he has backtracked from a career as a deregulator who opposed bigger government. He made his proposal hours before the Treasury Department and the Federal Reserve disclosed that they were considering a similar approach.

Among those who have supported the creation of such an entity is Paul A. Volcker, a former Fed chairman. He is among a core group of Obama advisers on the financial crisis that includes Robert E. Rubin and Lawrence H. Summers, the former treasury secretaries, and Laura Tyson, an economic adviser in the administration of President Bill Clinton, all of whom are expected to meet with Mr. Obama on Friday in Miami. Aides to Mr. Obama said that he was open to the concept but that the protection of taxpayers was a critical detail yet to be worked out.

Mr. Obama calls at each campaign stop for tighter regulation of Wall Street and help for those on Main Street. Although he usually speaks without notes, in recent days he has consistently used a teleprompter, to avoid errors that would undercut his attempts to sound presidential.

Between campaign appearances this week, he has received updates and briefings several times each day from Mr. Paulson, his economic advisers and Wall Street donors. Mr. Paulson also has briefed Mr. McCain and his chief economic adviser, Douglas Holtz-Eakin.

In an example of the frenetic efforts by the Obama side to keep up, the candidate late Tuesday asked for a conference call with core advisers. Mr. Volcker answered his cellphone on a Manhattan street corner, Mr. Rubin called in minutes after landing in New York from London, and they joined others to discuss how Mr. Obama should react.

Michael Cooper contributed reporting.

This article, "For Rivals, Finance Crisis Is Posing on-the-Fly Tests," first appeared in the New York Times.

Copyright © 2013 The New York Times

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