Obama and McCain clash over economy

CHILLICOTHE, Ohio (Reuters) - On a day of fresh economic turmoil, Democratic presidential nominee Barack Obama accused Republican John McCain Friday of trying to divide Americans and McCain said Obama was dodging legitimate issues.

But McCain -- urged by a voter to be tough on Obama at the next debate -- veered from attacks on his rival to praise the Illinois senator as someone he admired and considered decent.

Campaigning in battleground states key to the November 4 election, both candidates offered proposals to try to ease the strain on Americans from a market meltdown that has cost investment portfolios billions of dollars.

Obama, campaigning in Ohio, called for a plan to help small businesses hampered by the U.S. credit crunch to get the loans they need for operating expenses and payrolls. He urged global finance ministers meeting in Washington this week to take coordinated steps to address the financial crisis.

"In this global economy, financial markets have no boundaries. So the current crisis demands a global response," said Obama, who leads McCain in opinion polls with 25 days until the election.

McCain called in Wisconsin for steps to protect older investors from rules that require them to begin selling off stocks from their IRA and 401(k) retirement portfolios when they reach 70 1/2 years old.

"To spare investors from being forced to sell their stocks at just the time when the markets are hurting the most, those rules should be suspended," the Arizona senator said.

Tensions simmered between the two camps.

A day after McCain brought up Obama's ties to former left-wing radical William Ayers, Obama accused the McCain camp of launching "a barrage of nasty insinuations and attacks" and said he expected more in the days ahead.

"It's easy to rile up a crowd by stoking anger and division," Obama said. "But that's not what we need right now in the United States. The times are too serious. The challenges are too great. The American people aren't looking for someone who can divide this country -- they're looking for someone who will lead it."

OBAMA LEADS IN OPINION POLLS

The economic crisis is playing to Obama's strengths as a majority of Americans have told pollsters they trust him more than McCain to handle economic issues.

In the southern Ohio city of Chillicothe, Obama called on Americans to come together to help rebuild the economy, saying, "I won't pretend that this will be easy or come without cost."

"We will all need to sacrifice and we will all need to pull our weight because now more than ever, we are all in this together," Obama said.

Obama leads McCain 48 percent to 43 percent among likely U.S. voters in the latest Reuters/C-SPAN/Zogby poll, up slightly from a 4-point advantage for Obama.

A McCain rally in Waukesha, Wisconsin, Thursday was noticeable for its angry crowd, but the audience in La Crosse Friday was much more subdued.

McCain has demanded Obama explain the full extent of his ties with Ayers, a founding member of the Weather Underground group that bombed the U.S. Capitol and the Pentagon in the early 1970s to protest the Vietnam War.

Ayers, now a college education professor in Chicago, hosted a meeting at his house in 1995 to introduce Obama to neighbours during Obama's first run for the Illinois Senate. The two men also served on a non-profit anti-poverty board together.

McCain also said Obama was refusing to acknowledge he never sought to tighten regulations on Fannie Mae and Freddie Mac before the two mortgage giants imploded weeks ago.

"Rather than answer his critics, Senator Obama will try to distract you from noticing that he never answers the serious and legitimate questions he has been asked," McCain said.

Saying Obama had questioned his truthfulness, McCain added: "I don't need lessons about telling the truth to American people. And were I ever to need any improvement in that regard, I probably wouldn't seek advice from a Chicago politician."

But when a questioner in Lakeville, Minnesota, urged McCain to be a fighter at the next debate, McCain replied: "I will, sir. ... We want to fight and I will fight. But we will be respectful. I admire Senator Obama and his accomplishments."

The crowd erupted in boos.

McCain drew boos again when he attempted to reassure another voter who expressed fear of an Obama presidency.

McCain disagreed, saying, "He is a decent person and a person you do not have to be scared (of) as president of the United States."

But McCain assured them, "If I didn't think I'd be a heck of a better president, I wouldn't be running."

(Additional reporting by Matt Spetalnick; Writing by Steve Holland; Editing by David Storey and Peter Cooney)