McCain shifts squarely to the economy

Sen. John McCain tried Monday to relaunch his campaign with a pledge to use broad-based tax cuts to revive the economy -- and a string of barbs contrasting his views with Sen. Barack Obama's.

"The choice in this election is stark and simple," McCain, the presumptive Republican nominee, told a town hall meeting in Denver. "Senator Obama will raise your taxes. I won't. I will cut them where I can."

Obama, the presumptive Democratic nominee, countered by promising that he won't raise taxes on anyone who makes less than $250,000 a year.

"If Senator McCain wants a debate about taxes in this campaign," Obama told supporters in Charlotte, N.C., "that's a debate I'm happy to have."

Neither candidate's address contained new proposals. McCain's chief purpose was not only to shift his campaign's focus squarely to the economy but also to reignite his White House bid after weeks of organizational trouble and muddled messages.

Carly Fiorina, a senior McCain adviser, described the new phase as "a little bit like a start-up company becoming a multimillion-dollar corporation."

But David Carney, a Republican consultant and President George H.W. Bush's White House political director, saw McCain's shift in starker terms: "The biggest problem was they talked about two or three different things every week."

McCain tried to put some distance between himself and his party Monday, criticizing Congress and the Bush administration for having "failed to meet their responsibilities to manage the government."

McCain has been a senator since 1987, however, and Obama charged that "he's launching a new economic tour today with politics that are very much the same as those we have seen from the Bush administration."

Many of McCain's ideas are similar to or even identical to President Bush's, notably his support for continuing key elements of the 2001 and 2003 tax cuts, which are scheduled for repeal during the next administration. Asked to list three ways that Bush and McCain differ on the economy, Fiorina struggled and listed only one, better job training for displaced workers.

Obama would restore higher Clinton-era income tax rates on people who earn more than $250,000. The top rates before 2001 were 36 and 39.5 percent; now, the top rates are 33 and 35 percent.

One to 2 percent of all wage earners make more than $250,000. Obama says he wouldn't raise taxes on anyone else.

McCain, who didn't discuss how his tax plan could avoid making the federal budget deficit worse, countered that repealing the Bush cuts as Obama proposes would have a ripple effect and would be more widely felt. One reason is that the tax on dividends and capital gains, now 15 percent, is slated to go up in 2011.

McCain, who also wants to lower the corporate tax rate, would retain current dividend and capital-gains tax rates.

Obama said that keeping such rates low is a boon only to big business and the wealthy.

"The difference is, he trusts that prosperity will trickle down from corporations and the wealthiest few to everyone else," the Illinois senator said.

McCain emphasized small business incentives in his address, charging that Obama would raise the tax rate on the 23 million small-business owners in America who file as individual rate payers.