Presidential Candidates Address Economic Woes

March 17, 2008 — -- Both Democratic candidates veered off their scheduled speeches Monday to address the jittery U.S. economy and slammed President Bush for not doing enough to stop the mortgage lending crisis from spilling over into the wider economy.

After delivering what her campaign advertised as a "major" speech on the fifth anniversary of the U.S.-led invasion of Iraq in which Clinton touted her commitment to ending the war, the New York senator said that a year ago she'd warned that the president's plan to address the home foreclosure crisis didn't go far enough.

"I would do anything to start getting this under control, as I have been calling now for a year, because we are seeing the consequences. You know when I first called for a lot of these steps I was ridiculed by the Bush administration and, frankly, by my Democratic opponent," Clinton said. "Now we are in the soup, and we better get ourselves out of it before the consequences are drastic."

Clinton on Economic Woes

Clinton said that if she were president she would bring Congress back from its two-week Easter recess to find a solution.

"We are in a very dangerous period in the economy. We need vigilance and we need leadership, and we've got to get it from this administration," Clinton told reporters in Washington in an impromptu press conference following her speech.

On a Clinton campaign conference call about Iraq, reporters peppered members of Clinton's team with questions about her economic plan.

"We would not be here today if President Bush had listened to her a year ago and had taken effective action," Clinton policy director Neera Tanden told reporters, referring to Clinton's proposal to freeze foreclosures.

Clinton's communications director contrasted her economic platform with that of presumed Republican candidate Sen. John McCain', R-Ariz.

"In the fall there will be a major debate over what we do to get this economy back on track, and John McCain is welcome to defend seven years of the Bush economic policies, but we believe that we need to go in a different direction and will do so," Clinton communications director Howard Wolfson said Monday, referring to McCain's support of making Bush's tax cuts permanent.

Campaigning in Pennsylvania Monday ahead of the April 22 primary, Sen. Barack Obama, D-Ill., said that the economy wasn't working for average Americans, even before the recent crisis in the financial industry.

"Wages, incomes, they haven't gone up over the last seven years. Corporate profits were great, Wall Street was doing fine, but ordinary folks were struggling. And so if you're really ready for change, we can't just tinker around the edges. We've got to bring around a fundamental change to our economy," Obama said.

Obama Blasts Bush on Tax Cuts

Like Clinton, Obama blasted Bush for giving tax cuts to businesses and high-income Americans.

"We are going to stop giving tax breaks to companies that ship jobs overseas and start giving tax breaks to companies that invest right here in Pennsylvania and all across America. We're gonna roll back tax cuts to the wealthiest Americans who don't need 'em, and we're even asking for them, and give those tax breaks to hardworking ordinary Americans who deserve them right now," Obama said.

In a statement released earlier by his campaign, Obama also slammed the president for his handling of the economic downturn.

In a media availibility later Monday afternoon, Obama said he has not spoken with Treasury Secretary Henry Paulson, or the president of the Federal Reserve like Clinton did this morning.

"We have a number of phone calls that have been scheduled, I've been talking to the heads of the larger banks on Wall Street just to get a sense of where they see this going," Obama said, arguing the central bank did the right thing by working with investment firm JP Morgan to buy out embattled investment firm Bear Stearns.

The Republican National Committee pounced on Obama's statement Monday.

"The irony is that if Barack Obama studied history, he'd know that his tax-and-spend proposals would only hurt the economy. Barack Obama may not have much experience with national economic policy, but he should know that new taxes won't create new jobs," RNC spokesperson Alex Conant said.

In Washington Monday, Bush met with Treasury Secretary Paulson to discuss the economic situation and held talks with his task force on financial markets.

"We're in challenging times. But another thing is for certain: that we've taken strong and decisive action," Bush said at the White House, defending the Federal Reserve's move to be a lender of last resort for struggling investment firms.

"When need be, we'll act decisively, in a way that continues to bring order to the financial markets," he said.

McCain Travels in Iraq

McCain was in Baghdad Monday and didn't comment on the economic troubles, but his senior policy adviser put out a statement.

"Sen. McCain has complete confidence in Chairman Bernanke and the actions of the Federal Reserve, and is committed to ensuring the economy continues to grow -- because no government program or policy is a substitute for a good job," read a statement from Obama's senior policy adviser Doug Holtz-Eakin.

"John McCain understands the federal government's responsibility to ensure the stability of the U.S. financial system, and is equally committed to protecting the pocketbooks of hardworking American families."

While McCain has focused his campaign on his national security credentials and his position on the war in Iraq, he usually begins his stump speeches talking about the economy, saving the so-called "war on terror" for his big finish.

Earlier this month, McCain addressed the economy and alligned himself with Bush's tax cut remedy, marking a departure from his early opposition to making the Bush tax cuts permanent.

"Our economy is not in the condition we want it to be. Let's have some straight talk," McCain said campaigning in Atlanta March 7.

"I want to assure you that the one thing I do not believe is the way to fix it is to raise your taxes. I think that's the last thing that we should do. It's the last thing we should do is raise your taxes and increase regulation and try to impose big government solutions to it. My friends, we have to make the present … tax cuts permanent."

Voters have cited the economy as their top issue in every Democratic contest so far, except the Iowa caucuses, where it tied with Iraq as the top issue. Taken altogether, the economy is the top issue for 50 percent of voters, with Iraq at 27 percent and health care at 20 percent.

Clinton's top advisers were asked by a reporter today if it was "time to start thinking bigger" and if there were other specific proposals she would put forward now, given the extent of the problems facing the financial markets.

Clinton's top advisers pointed back to her subprime mortgage plan.

"We believe that adoptment - enactment of her plan now would help alleviate the burden and anxiety for homeowners and bring some stability to the housing market," Wolfson said.

"I don't foreclose the possibility that we may be announcing additional measures and steps, and when we have something to announce, we'll definitely let folks know."

ABC News' Kate Snow, Peyton Craighill, Sunlen Miller, Eloise Harper, Bret Hovell and David Chalian contributed reporting.