Candidates step up efforts on economy

— -- Republican John McCain said Friday the Federal Reserve should stop bailing out the nation's failing financial institutions, while Democrat Barack Obama gave his support to the Bush administration's multi-pronged effort to stem the crisis.

The Fed "should get back to its core business of responsibly managing our money supply and inflation," McCain said in Green Bay, Wis.

"This isn't a time for fear or panic," Obama said in Florida, flanked by some of his economic advisers. "This is a time for resolve and for leadership," adding that he and McCain should work with other political leaders in a bipartisan fashion.

The two presidential candidates have stepped up their efforts on the economy as Wall Street grapples with a meltdown that this week alone has seen the Fed bail out American Insurance Group, Merrill Lynch merge with Bank of America, and Lehman Bros. seek bankruptcy protection.

Polls show the presidential race has tightened, including on the question of who can best handle the economy. Obama had a three-point lead earlier this month over McCain on the issue, but that number was within the USA TODAY/Gallup Poll's margin of error.

On Friday morning, Treasury Secretary Henry Paulson and Fed Reserve Chairman Ben Bernanke announced a costly program to buy up bad mortgages and other debt. The program, to be hammered out with Congress, could cost taxpayers hundreds of billions of dollars.

"Any action should be designed to keep people in their homes and safeguard the life savings of all Americans by protecting our financial system," McCain said, before Paulson and Bernanke spoke in Washington.

Responding to the Bush administration announcement, McCain senior adviser Douglas Holtz-Eakin issued a statement and said McCain was "pleased to see the executive branch and Congress" take steps.

In his Wisconsin remarks, McCain outlined a five-point plan for restoring trust in the markets and attacked Obama for links to troubled institutions such as mortgage giants Fannie Mae and Freddie Mac, which were bailed out by the government last week.