McCain has 3 weeks to reverse Obama lead

updated 7:53 p.m. ET Oct. 12, 2008

WASHINGTON - Republican John McCain, his presidential hopes battered by chaos in the American economy, has just three weeks left to come up with a consistent campaign message to close the widening gap that separates him from Democrat Barack Obama.

The veteran Arizona senator and running mate Alaska Gov. Sarah Palin, having spent the last week in a largely fruitless effort to hinder Obama's rise in the polls by attacking him on character issues, appeared over the weekend to have shifted tactics yet again — trying to convince voters that they are best placed to lead the country out of its worst economic crisis in 80 years.

The U.S. economy, the dominant issue in the presidential campaign for weeks, has now become a voter obsession as the stock market fell nearly 20 percent last week alone and vital sources of credit remain frozen.

With retirement savings vanishing in the stock market plunge, tens of thousands of homeowners facing mortgage foreclosure and unemployment rising, McCain's campaign has handled the financial crisis unevenly — hard-pressed to shed associations with President George W. Bush and the blame that attaches to the incumbent Republicans with their support for limiting government's role in regulating markets.

McCain considers new proposal
Sen. Lindsey Graham, a South Carolina Republican and key McCain adviser, said on Sunday that the candidate was considering a new proposal to lower taxes for investors by cutting back the share the government takes from capital gains and dividends.

"It will be a very comprehensive approach to jump-start the economy by allowing capital to be formed easier in America by lowering taxes," Graham said on CBS television.

McCain already has laid out proposals to address the crisis, including a $300 billion plan for the federal government to buy distressed mortgages and renegotiate them at a reduced price for hard-pressed homeowners. He argues the move is necessary to take thousands of bad mortgages off the books to stabilize home values and restart credit flows. Critics say the plan would reward financial institutions that made the bad loans in the first place.

Obama, for his part, also has offered plans to address the fiscal crisis but nothing as sweeping or controversial as McCain's. On Friday, the Illinois senator announced a $900 million plan to temporarily extend an expiring tax break that lets small businesses write off investments up to $250,000.

Boost from the Clintons
Obama's fortunes got a further boost Sunday when former President Bill Clinton and his wife, Sen. Hillary Rodham Clinton, made their first joint campaign appearance together on the Illinois senator's behalf — setting aside hard feelings left over from the Democratic primary contest in which Obama outdistanced the former first lady in a bitter, extended race.

The Clintons introduced Obama's running mate, Delaware Sen. Joe Biden, at a rally Sunday in the working-class town of Scranton, Pennsylvania, a city that has taken on outsized symbolism for Democrats this year. It was Biden's birthplace and Hillary Clinton's father grew up and is buried there.

Pennsylvania is one of the few Democratic-leaning states where McCain is campaigning aggressively in hopes of putting it into his column on Election Day.

Hillary Clinton was interrupted repeatedly by applause from the big crowd as she delivered one-liners attacking Bush and McCain. At one point she said Republicans viewed middle class Americans not as "fundamental, but ornamental" to the functioning of the U.S. economy.

Biden hammered McCain as the candidate who would only bring the country four more years of the Bush administration, dismissing both men as unable to deal with the failing economy.

"We need more than a brave soldier, we need a wise leader," Biden said after pointedly saying McCain had been "erratic" in his response to the U.S. financial crisis.

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