By Caren Bohan
ST. LOUIS (Reuters) - Presidential rivals Barack Obama andJohn McCain clashed over how to boost the ailing U.S. economyon Monday, with Obama pushing for a new stimulus package tohelp homeowners and McCain pressing for low income taxes andincentives for small business.
With Americans returning to work after the Independence Dayholiday weekend, both candidates turned to the No. 1 issue forvoters -- the economy -- in a bid to win support from peoplewrestling with home foreclosures, job losses and the soaringcost of gasoline.
In a speech to reporters after mechanical trouble forcedhis plane to make an unscheduled stop in St. Louis, Obamacalled for a $50 billion (25.3 billion pound) stimulus packageto fight foreclosures and offset high energy prices. He said hewould tighten rules for credit card companies and relaxbankruptcy laws to help those struggling with debt.
Obama, a Democrat, said Republican McCain, like unpopularPresident George W. Bush, would favour the wealthy over themiddle class if he won the November election.
"He trusts that prosperity will trickle down fromcorporations and the wealthiest few to everyone else," theIllinois senator said in remarks originally scheduled fordelivery in Charlotte, North Carolina. "I believe that it's thehard work of middle-class Americans that fuels this nation'sprosperity."
Obama delivered the address in St. Louis because hisMidwest Airlines MD-80 made an unscheduled landing there afteran emergency evacuation slide deployed inside the plane, U.S.safety investigators and airline officials said. Ordinarily thetail cone pops off and the slide deploys outside the aircraft.
The incident, which occurred as the plane was climbing outof Chicago en route to Charlotte, increased the forces on thecontrols that work the horizontal flaps atop the plane's tail.That prompted the pilot to divert to St. Louis.
BALANCING THE BUDGET
Brushing up his economic credentials in a speech in Denver,McCain pledged to balance the federal budget, impose fiscaldiscipline on Washington and modernize how the government doesbusiness in order to save billions of dollars.
"I will veto every single bill with wasteful spending," hesaid.
Income taxes are a key difference between the twocandidates.
McCain wants to keep in place Bush's 2001 and 2003 taxcuts, which are set to expire at the end of 2010, and he woulddouble a $3,500 deduction for parents.
Obama would let the Bush tax cuts expire for those makingmore than $250,000 per year. He proposes a $500 per person taxcredit and would eliminate taxes for elderly people making lessthan $50,000 per year.
"The choice in this election is stark and simple," McCainsaid. "Senator Obama will raise your taxes. I won't."
Obama rejected McCain's tax claims and said the Arizonasenator's tax plan was designed to help the wealthy rather thanthe middle classes.
"Only a quarter of his total tax cuts will go to the middleclass, less than a quarter," the Illinois senator said."Ninety-five of people in America would get a tax cut under myplan."
He expressed scepticism over McCain's plan to balance thebudget in four years.
"Not only is it overly ambitious," Obama said. "Everyindependent observer who has looked at John McCain's plan saysthat his plan would add $200- to $300-billion a year in deficitspending. He hasn't specified how he would bring it down. Hisown campaign has acknowledged that they don't have specifics."
Under Bush, the U.S. government's debt has nearly doubledto $10 trillion. Bush could leave his successor a record $500billion budget deficit.
The candidates disagree in other areas connected to theeconomy, including trade and health care reform. Both proposespurring job growth through programs to increase U.S. use ofsolar, wind and other renewable energy sources, but Obama hasbeen sceptical of McCain's energy plan.
"My opponent's answer ... is no; no to more drilling; no tomore nuclear power; no to research prizes that help solve theproblem of affordable electric cars," McCain said. "For a guywhose 'official seal' carried the motto, 'Yes, we can,' SenatorObama's agenda sure has a ... whole lot of 'No, we can't.'"
(Writing by Andy Sullivan and David Alexander; additionalreporting by Jeff Mason, John Crawley and Andy Sullivan,editing by David Wiessler)
(To read more about the U.S. political campaign, visitReuters "Tales from the Trail: 2008" online athttp://blogs.reuters.com/trail08/)
