RALEIGH, N.C. Democrat Barack Obama on Monday seized on heightened concerns about the economy, tying John McCain to the Bush administration's recent record of soaring gasoline prices and slumping employment.
Launching a two-week economics tour in a state the GOP usually considers safe, Obama warned that McCain's policies on taxes, spending and energy would continue the nation's slump, which some fear is already a recession. He called for new taxes on oil companies and wealthy individuals, along with $1,000 tax cuts for most working families.
With the presidential general election now fully engaged, McCain pushed back, saying Obama's bid to end the administration's tax cuts for upper-income earners would only worsen the economy. He is airing TV ads in key states on the Iraq war, which he sees as a better issue this fall. But he took questions on the economy from donors in Virginia on Monday and planned a speech today to small-business owners in Washington.
With many voters blaming Bush for the economic woes, Republican candidates for federal and state offices are scrambling to distance themselves from the bad news without abandoning core principles such as low taxes and modest government intervention in activities like banking and lending.
Democrats are trying to cut off any escape routes.
The centerpiece of McCain's economic plan "amounts to a full-throated endorsement of George Bush's policies," Obama told about 900 people in Raleigh.
North Carolina is not a state ordinarily pursued by Democratic presidential nominees. But it gave Obama a crucial victory in his primary battle against Hillary Rodham Clinton, and he hopes to put it in play this fall or at least force McCain to spend time and money here.
In the audience was former presidential rival John Edwards, who lives nearby. His wife, Elizabeth Edwards who refrained from endorsing Obama when her husband did so last month also attended.
Obama offered no new policies in his speech, which he read from teleprompters. Rather, he used the occasion to emphasize his economic differences with McCain and summarize earlier proposals. They include raising income taxes on wealthy individuals, granting a $1,000 tax cut to most others, winding down the Iraq war, tightening credit card regulations and pumping more money into education, alternative fuels and infrastructure such as roads and bridges.
Obama took part of his speech from headlines across the nation, noting that the average price of gas just hit $4 a gallon for the first time. The news followed an unusually sharp spike in the unemployment rate on Friday.
Repeatedly linking McCain to Bush, Obama said, "our president sacrificed investments in health care, and education, and energy and infrastructure on the altar of tax breaks for big corporations and wealthy CEOs."
Obama criticized McCain for originally opposing Bush's first-term tax cuts but now supporting their continuation. He said he would place a windfall profits tax on oil companies while McCain would reduce their taxes.
"At a time when we're fighting two wars, when millions of Americans can't afford their medical bills or their tuition bills, when we're paying more than $4 a gallon for gas, the man who rails against government spending wants to spend $1.2 billion on a tax break for Exxon Mobil," Obama said. "That isn't just irresponsible. It's outrageous."
In a conference call with reporters, Doug Holtz-Eakin, an economic adviser to McCain, said of the claim: "I presume that they're attributing that to the basic, across-the-board corporate rate cut that's necessary to keep the American corporate sector competitive in the global economy and jobs in America."
At a fundraiser in Richmond, Va., McCain noted that he supports a temporary suspension of the federal tax on gasoline, which Obama dismisses as a gimmick that will not bring down prices.
"Talk to somebody who owns a couple of trucks and makes a living with those trucks," McCain said. "Ask them whether they'd like to have some relief 18 1/2 cents per gallon for gasoline and 24 1/2 cents for diesel. They say it matters."
The two differed somewhat on energy production as well. Obama called for greater government investments "in a renewable energy policy that ends our addiction on foreign oil, provides real long-term relief from high fuel costs and builds a green economy that could create up to five million well-paying jobs that can't be outsourced."
He did not mention nuclear power, although in the past he has said he would not rule out a greater role for nuclear energy.
McCain was more gung-ho about nuclear power and expanded domestic drilling for oil and natural gas. When a donor in Richmond summed up his advice as, "nuclear, and drill wherever we've got it," McCain responded: "You just gave my speech. Thank you, my friend."
McCain added, "Long-term, we've got to become used to nuclear, wind, solar, tide, all of the alternate energy, including a battery that will take a car 100 miles or 200 miles" before being recharged.
"Nuclear power, for all kinds of reasons, needs to be part of the solution," McCain said.
Obama said he would pay for all of his new proposals from sources including the higher taxes on the wealthy and an end to the Iraq war. His aides said he will provide more details as the campaign goes on.
The AFL-CIO, the nation's largest labor organization, plans to help Obama by having its members protest Bush and McCain at gas stations around the country. Starting in Indianapolis, union members will hold signs saying "Bush & McCain Love Big Oil" and complain about a McCain tax proposal they say would give the five largest oil companies $3.8 billion in tax breaks.