Obama wants conditions on emergency bailout

WASHINGTON -- Democrat Barack Obama said there should be several conditions on an emergency $700 billion government plan to prop up the critically ill U.S. economy, while Republican John McCain challenged his opponent's readiness to lead the country out of its financial nightmare -- one of the most serious economic meltdowns since the 1930s Great Depression.

Sunday marked the opening of a campaign week that will see the candidates engage in the first of three presidential debates -- slated to focus on foreign policy -- an issue in which McCain, a four-term Arizona senator, claims the advantage over Obama, who is serving his first term in the upper chamber of the American Congress.

But while Friday's debate will likely reap a massive television audience, polls show American voters are far more concerned about their economic well-being than any other issue in the 2008 presidential election, including the protracted wars in Iraq and Afghanistan.

And given voter anxiety about the teetering American economic situation, both candidates hammered what they claimed was the other's ineptitude.

At a campaign stop in North Carolina, Obama focused on the financial turmoil and again blamed it on Republican policies he said McCain was committed to continuing.

"We're now seeing the disastrous consequences of this philosophy all around us, on Wall Street as well as Main Street," Obama said. "Yet Sen. McCain, who candidly admitted not long ago that he doesn't know as much about economics as he should, wants to keep going down the same disastrous path."

Obama said the Bush administration's proposal to put a floor under the dangerous U.S. economic slide -- one that many are worried could pull down the world economy -- carried a "staggering price tag" but no plan to guarantee the "basic principles of transparency, fairness, and reform" to taxpayers who will pay for the huge and unprecedented government bailout.

The Bush administration is pressing Congress to pass the bailout measure by the end of this week. But Obama on Sunday said any bailout must include plans to recover the money, and protect working families and big financial institutions, and be crafted in a way to prevent such a crisis from happening again.

"This plan can't just be a plan for Wall Street, it has to be a plan for Main Street. We have to come together, as Democrats and Republicans, to pass a stimulus plan that will put money in the pockets of working families, save jobs, and prevent painful budget cuts and tax hikes in our states," Obama said during a campaign stop in North Carolina.

Aides said Obama had spoken with Paulson, Fed Chairman Ben Bernanke, congressional leaders and Bill and Hillary Clinton in fleshing out his approach to the bailout.

McCain, at a National Guard convention in Baltimore, Maryland, said Obama was behaving more like a politician than a leader, faulting him for not offering a plan to stabilize financial markets after a crisis in the mortgage industry led to the collapse of two investment banks and the government bailout of housing lenders Fannie Mae and Freddie Mac and insurance giant AIG.

"At a time of crisis, when leadership is needed, Senator Obama has not provided it," McCain said. "Whether it's a reversal in war, or an economic emergency, he reacts as a politician and not as a leader, seeking an advantage for himself instead of a solution for his country," McCain said of his Democratic rival.

Obama had previously declined to offer a financial recovery plan, saying he wanted to allow Treasury Secretary Henry Paulson to address the matter without political intrusion. Obama's advisers criticized McCain's proposals as little more than talking points that lacked any meaningful detail.

At the Sunday rally, McCain was also looking ahead to the foreign policy debate in five days, reminding his audience again that Obama had refused to back the U.S. troop surge in Iraq -- the addition of 30,000 additional American forces that has been credited with helping dramatically reduce violence in the oil-rich country the United States invaded five years ago to oust Saddam Hussein.

Obama has acknowledged the tactic succeeded in bringing down violence but said Iraqis were not using the new relative calm to solve their political conflicts. McCain wants to leave U.S. troops in Iraq until an undefined future date when he would feel Iraq leaders and its security forces can take control. Obama has vowed to pull most U.S. combat forces out of the country within 16 months of taking office.

After speaking in North Carolina, a Republican-leaning state he hopes to win in November, Obama was returning to Chicago for fundraising and a campaign swing through Wisconsin, a battleground state he needs to win.

He will spend much of the coming week in Florida preparing for the Friday debate.

Separately, Obama pulled his campaign staffers out of North Dakota, where he had been making an effort to become the first Democrat to carry the state in 44 years. Obama spokeswoman Amy Brundage said the campaign would send workers from his 11 offices in North Dakota to other battleground states.

Paulson, meanwhile, resisted the Democratic push to add additional help for households, saying financial markets remain under severe stress with an urgent need for Congress to act quickly without adding other measures that could slow passage.

"We need this to be clean and to be quick," Paulson said in an interview with ABC television. He told Fox television that America had been "humbled, humbled" by allowing its economy to slide into chaos.

As news of the economic troubles have settle deeply into the American psyche, national polls indicate that McCain's rise in the race had slipped. The latest Gallup Poll daily tracking survey also showed Obama ahead, with 50 percent to McCain's 44 percent. Last Sunday, a day before stocks took a dive on Wall Street, McCain and Obama were in a statistical dead heat with McCain's 47 percent against Obama's 45 percent.