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Obama, McCain spar on economy

In N.C., the Democrat sought to link his rival to Bush. In Va., McCain struck back on taxes.

RALEIGH, N.C. - Barack Obama yesterday seized on heightened concerns about the economy, seeking to tie John McCain to the Bush administration's recent record of soaring gasoline prices and slumping employment.

Opening 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 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 from donors in Virginia yesterday on the economy, and planned a speech today to small-business owners in Washington.

With many voters blaming President 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 such as banking and lending.

Obama told about 900 people in Raleigh that the centerpiece of McCain's economic plan "amounts to a full-throated endorsement of George Bush's policies."

North Carolina is not ordinarily pursued by Democratic presidential nominees. But Obama hopes to put it in play this fall - or at least force McCain to spend time and money in the state.

Obama offered no new policies. Rather, he emphasized his economic differences with McCain and summarized earlier proposals. They include winding down the Iraq war, tightening credit-card regulations, and pumping more money into education, alternative fuels and infrastructure.

Obama noted that the average price of gas just hit $4 a gallon. The news followed an unusually sharp spike in the unemployment rate reported Friday.

Repeatedly linking McCain to Bush, Obama criticized McCain for originally opposing Bush's first-term tax cuts but now supporting their continuation. Obama said he would place a windfall-profits tax on oil companies while McCain would reduce their taxes.

Obama said: "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. 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 fund-raiser in Richmond, Va., McCain noted that he supported a temporary suspension of the federal gas tax, which Obama dismisses as a gimmick.

"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. 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, but in the past he has said he would not rule out a greater role for it.

McCain was more supportive 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."

Also yesterday, McCain reversed course and allowed the media into three private fund-raisers. His campaign said it had raised more than $2 million during the day.

McCain in Phila. Tomorrow

Sen. John McCain

, the presumptive Republican presidential nominee, will be in Philadelphia tomorrow.

McCain, who

has called

for a series of joint appearances with his Democratic counterpart, Sen. Barack Obama, will hold a town-hall meeting of his own at the National Constitution Center, 525 Arch St.

Doors open

at 9:30 a.m., and the session is slated to begin at 11:30. The general public is invited.

Obama is

expected to visit the region later this week.

- Larry Eichel