(Reuters) - Trying to revive his campaign, Republican presidential nominee John McCain offered proposals on Tuesday to help investors rebound from the stock market crash while Democrat Barack Obama prepared for their final debate. "What we need to see now is swift and bold action to lead this country in a new direction," McCain told cheering supporters in the battleground state of Pennsylvania.
McCain has sought to regain his footing on economic issues for the past three weeks after drawing criticism for saying the US economy's fundamentals were strong despite brewing signs of crisis on Wall Street that ultimately gave way to the biggest stock market drop since the Great Depression. During that time Obama has prospered, moving from a tie with McCain in national polls to a lead. In bad news for the McCain campaign, a Quinnipiac/Wall Street Journal/Washingtonpost poll on Tuesday gave Obama sizable leads in four battleground states.
The Illinois senator, who has hammered economic issues in his own campaign speeches, was up 52% to 43% for McCain in Colorado, 54-38 in Michigan, 51-40 in Minnesota and 54-37 in Wisconsin. With three weeks to go until election day on November 4, the stakes were high for the third and final debate between Obama and McCain, to take place at 9pm EDT on Wednesday in Hempstead, New York.
McCain is offering a more positive message on the campaign trail a week after he went negative on Obama, criticizing the Democrat for his ties to 1960s radical William Ayers. Ayers may well come up at the third debate, however, McCain told the Mark Reardon Show of St. Louis radio station KMOX.
"I was astonished to hear him (Obama) say that he was surprised that I didn't have the guts to do that ... I think he's probably assured that it's going to come up this time," McCain said.
In the Philadelphia suburb of Blue Bell, McCain outlined an estimated $52.5 billion in new proposals called the Pension and Security Plan. Many of them are aimed at helping older Americans who have seen their retirement accounts devastated in the recent stock market gyrations. He proposed that seniors pay a maximum tax rate of 10 percent on money they withdraw from IRAs and 401k retirement savings plans in 2009 and 2010, instead of paying the current higher tax rate. It would cost $36 billion.
This is in addition to a plan he announced last week to give investors temporary relief from a rule forcing them to begin withdrawing from their 401k and IRA plans once they reach the age of 70 1/2. McCain also proposed relief for Americans who were counting on investment income to send their children to college or pay the mortgage.
Internal Revenue Service rules say Americans can only deduct $3,000 in stock losses in any given year. McCain would expand that deduction to $15,000 a year for the tax years 2008 and 2009. Saying he wanted to "revive the market by attracting new investment," McCain proposed a two-year cut in the capital gains tax on stock profits in half, from 15% now on stocks held a year or longer to 7.5%, a $10 billion proposal.
In a proposal aimed at helping Americans who have been laid off from their jobs, McCain said would suspend the tax on unemployment insurance benefits in 2008 and 2009. McCain repeated his support for a $300 billion plan for the government to buy troubled loans from homeowners who have seen values fall below their debt and restructure them into more affordable mortgages.
The Obama campaign dismissed McCain's plan. "John McCain's latest gambit is a day late and 101 million middle-class families short. McCain's plan would spend $300 billion to bail out the same irresponsible Wall Street banks that got us into this mess without doing anything to help jumpstart job growth for America's middle class," said Obama spokesman Bill Burton.
McCain, accused by the Obama campaign of helping deregulate the financial industry, called for more oversight of Wall Street to avoid a repeat of a lax environment that fostered the US housing crisis at the root of the financial meltdown.
"We will learn from this crisis to prevent the next one, with much stricter oversight," he said.