Video: Obama lays out economic 'rescue' plan

updated 10/13/2008 5:34:32 PM ET 2008-10-13T21:34:32

Democrat Barack Obama, bidding to extend his lead in the polls, proposed Monday to put home foreclosures on hold and give tax breaks to businesses that create jobs, while Republican opponent John McCain issued veiled but stinging criticism of the Bush administration.

With the U.S. economy threatened with an extended and deep recession, both candidates were mining deep anxieties among voters who watched helplessly last week as the stock market plunged nearly 20 percent, wiping away billions of dollars in retirement savings. Tens of thousands of Americans already have lost their homes to foreclosures and unemployment continues to climb.

Speaking in Toledo, Ohio, Obama laid out four new proposals that included a 90-day moratorium on home foreclosures by some banks, a $3,000 tax credit for each new job created, as well as a plan to let voters withdraw without tax penalties up to 15 percent, to a maximum of $10,000, from their retirement savings plans through the end of next year.

The Democrat's four-point proposal included a special federal fund that would lend to state and city governments as the economy contracts and local tax revenues shrink.

Obama said that banks participating in the $700 billion Wall Street bailout plan should temporarily postpone foreclosures for families making good-faith efforts to pay their mortgage.

"We need to give people the breathing room they need to get back on their feet," he said, adding that families living beyond their means share some of the responsibility.

McCain distances himself from the president
McCain, meanwhile, ticked off economic plans he has detailed over the past two weeks and told an audience in Virginia that the country could not bear up under four more years like the past eight, implicitly criticizing fellow Republican President George W. Bush, whose unpopularity has been a huge drag on the veteran Arizona senator's campaign.

"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 at the rally in Virginia, a normally reliably Republican state that he's been forced to defend this year as the economic crisis deepens.

Obama was playing to his strength as increasing numbers of voters are lining up behind him as the candidate they believe can best pull the U.S. economy out of the deep hole brought on by the near collapse of the country's financial structures.

Falling in the polls
McCain, who is perceived as having reacted unevenly through the economic storm, acknowledged that the issue had hurt his campaign: "We have 22 days to go. We're 6 points down. The national media has written us off." But, he vowed, a comeback was inevitable. "They forgot to let you (voters) decide. My friends, we've got them just where we want them."

A new Washington Post-ABC News poll showed Obama with a 10 point lead, 53-43 percent, among likely voters with an even larger 2-to-1 margin among voters who put the economy as the top issue in the campaign. The poll, conducted by telephone Oct. 8 to 11, had a margin of error of plus or minus 3.5 points for the sample of 766 likely voters.

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Video: McCain hears it from the crowd McCain, meanwhile, dialed back personal attacks on Obama but vowed over the weekend to "whip" his opponent's "you know what" in Wednesday's last of three presidential debates.

With three weeks remaining until the Nov. 4 election, McCain is struggling under the heavy burden of his association with Bush — and the blame that attaches to the incumbent Republicans for the crumbling financial markets.

Last week, both McCain and running mate Alaska Gov. Sarah Palin appeared to be trying to shift attention away from the troubles confronting the American voters by issuing stinging attacks on Obama .

Palin opened the series of blistering assaults by accusing Obama of "palling around with terrorists," in reference to William Ayers, a founder of the 1960s violent Weather Underground group. Obama and Ayers, who live in the same Chicago neighborhood, have worked together on community projects in Chicago, but Obama, who was a child during the Weather Underground's violent activities, has denounced Ayers' violent past.

Video: Bidens, Clintons campaign together in Pennsylvania

Clintons campaign
Sen. Hillary Rodham Clinton, the former first lady who Obama defeated in an extended and bitter Democratic primary campaign, continued working on behalf of her former opponent on Monday.

She told a Philadelphia audience that Bush doesn't understand how hard the economy is hitting the middle class, declaring the hard-pressed group was "invisible" to the administration.

It was her second appearance for Obama in as many days. On Sunday she and former President Bill Clinton joined in Scranton, Pennsylvania, to stump for Obama and running mate Sen. Joe Biden.

Bill Clinton urged voters to back Obama, who he said would put an end to Republican bumbling that he blamed for the failing economy.

"If you ask yourselves who has the best ideas, who's got the best instincts, who's got the best ability to understand these challenges, who's got the best supporting cast, the answer is Barack Obama," the former president said.

Hillary Clinton said Republicans viewed middle class Americans not as "fundamental, but ornamental" to the functioning of the U.S. economy.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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