Candidates trade barbs on economy

GREEN BAY, Wis. — John McCain and Barack Obama clashed sharply Friday as the campaigns intensified their heated confrontation over who can better address the volatile financial markets.

McCain provided more detail about his proposal to create a new federal regulator and assailed Obama for failing to outline a plan. The Republican presidential nominee also accused his Democratic rival of associating with those responsible for the crisis.

"People like Senator Obama have been too busy gaming the system and haven't ever done a thing to actually challenge the system," McCain told a business group in Green Bay, noting that Obama had taken advice from two former executives of collapsed mortgage giant Fannie Mae.

Obama, who endorsed the rescue package announced Friday by the Bush administration, in turn chided McCain for being hypocritical. Several McCain advisers, including his campaign manager, have worked on behalf of Fannie Mae.

Both candidates have received financial support from the financial-services industry.

Under McCain's proposal, distressed companies could seek direct aid from a new agency in the Treasury Department. The so-called Mortgage and Financial Institutions Trust would be able to issue taxpayer-funded loans or to assume responsibility for problematic assets.

The McCain campaign did not indicate how this new agency would determine which companies could receive assistance, but senior aide Matt McDonald said the approach would be broadly similar to the financial rescue outlined by the Bush administration.

Obama voiced support for giving the Treasury and Federal Reserve broad powers to stabilize financial markets. And he backed efforts by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke "to work in a bipartisan spirit with Congress."

Obama also advocated a $50 billion stimulus plan, including infrastructure projects, and tax rebates of up to $1,000.