Allentown, PA — Despite acknowledging that a gas tax holiday is not a “panacea” for the rising fuel costs, Sen. John McCain again called on Sen. Barack Obama to support what he calls a “nice little break” for the American people Wednesday.

“I noticed again that Senator Obama refuses to endorse a gas tax holiday for Americans, despite the fact that he voted for it several times when the price of gas was about a dollar and a half a gallon,” McCain said during a media availability today. “Is this a panacea? Is this addressing our dependence on foreign oil? The rising costs of gasoline in America? Of course not. But it’s a nice little break for Americans, particularly lower income Americans who generally speaking drive further and drive older cars, which then increases their cost at the gas pump.”

The holiday will save the average American driver about $30 this summer according to some estimates and critics have called it a pander, but McCain was adamant about his support Wednesday.

He also noted that today’s economic figures, which show slight growth, did little to change his view of the American economy. McCain has previously indicated that the country may be in a recession.

“Perhaps there was some small growth as far as statistics are concerned. I don’t think that that helps Americans any,” McCain said. “American families are hurting, they are having difficulties staying in their homes. More than 250,000 of them have lost their jobs and we need to act and we need a plan of action and I have that.”

Senator Barack Obama picked up comments Senator McCain made yesterday on Bloomberg TV that economic progress has been made under George W. Bush. “I think if you look at the overall record and millions of jobs have been created, et cetera, et cetera, you could make an argument that there’s been great progress economically over that period of time,” McCain said.

Today Obama read the quote to voters in Erie, PA, and incredulously wondered how McCain made such statements. ”Here’s what happened since George Bush took office, here’s what John McCain calls great progress — we went through the first period of sustained economic growth since World War II that saw incomes drop. Eleven million more Americans don’t have healthcare, two million more Americans are out of work, millions of families are facing foreclosure, the poverty rate has gone up, you are working harder for less, you are paying more for tuition, you’re paying more for groceries, more at the pump, that’s what John McCain calls great progress,” Obama said.

“Only somebody who spent two decades in Washington could make a statement as disconnected from the hard times that people are facing all across the america. Only somebody whose campaign is run by Washington lobbyists could think we’re making great progress while so many Americans are struggling,” Obama said.

The McCain campaign quickly sent out their candidate’s full remarks on Bloomberg, showing McCain qualified his statement. “But that’s no comfort. That’s no comfort to families now that are facing these tremendous economic challenges,” McCain said.

Obama did not quote McCain’s addendum, but minutes before hitting the Republican for saying there was economic progress, Obama himself admitted, “Our economy actually expanded over the last seven years, that’s true.”

His addendum? “But here’s the thing — this is the first economic expansion in which average family incomes actually went down – not up. It’s never happened before. The average family had a thousand dollars less of purchasing power when you take into account inflation then they did at the start of the economic expansion. And so families are working harder and harder just to get by. At the same time you are paying more for everything from a gallon of milk to a gallon of gas to health care to college.”

MALVERN, Penn — Barack Obama is back in the Keystone State to make the case that he’s a better choice for middle class families than John McCain.

“We’ve got a very clear choice in this election,” he said. “If you believe our economy is on the right path, then John McCain is the right candidate for you.”

“Senator McCain has been a staunch supporter of Washington’s failed policies, and in this election he’ll offer more of the same policies that have set back working people.”

The Illinois Senator criticized his Arizona counterpart for flip-flopping on the 2001 Bush tax cuts — and for an economic agenda that doesn’t address the housing crisis. “I admired Senator McCain when he stood up and said the Bush tax cuts for the wealthiest Americans offended his conscience. That’s what he said. But he got over that, and now he’s all for them — and for continuing to do the same things that have taken us towards recession,” he said.

“His solution to George Bush’s fiscal mess is to make George Bush’s tax cuts permanent. His solution to the struggles of working people is reflected in his answer to the housing crisis, which is to sit idly by and hope it passes as millions of people face foreclosure and millions more watch the values of their home erode.”

Obama told the crowd “I intend to offer a new direction. That’s why I’m running for president.” Part of that new economic direction involves fixing Social Security in a way that doesn’t punish low income workers.

As an example, Obama told the crowd about his own low income job as a teen — scooping ice cream at a Baskin Robbins. “It was actually kind of embarrassing,” he said, “because you had to wear the brown cap and stuff, the apron. Girls would come in, you’d be trying to talk to them. They wouldn’t give you the time of day because you were in this cap.”

As the crowd laughed, he said “I was making, I don’t know, like, maybe $100 a week or something, and they were still taking all this money out. I thought, man! That’s the payroll tax. So it’s already regressive, I don’t want to raise the tax on people not making a lot of money already.

UPDATE–9 p.m. McCain responds with new ad, “Ready.” (see script after jump)

The McCain campaign is not mincing any words in response to Clinton’s latest ad attacking the Arizona Senator on the economy. Senior Adviser Steve Schmidt tells reporters, “with ads like that, it’s more likely the call at 3 a.m. is ‘Senator, you just lost another Superdelegate.’”

Clinton ad below:

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Senator was back in Pennsylvania today for the first time in a week, continuing the focus on economic issues with a roundtable in Harrisburg where she addressed the president’s plan to overhaul the financial regulatory system. “Today the administration, through the Secretary of the Treasury, has announced that finally the Bush administration is going to take some action to better regulate the financial markets,” she said. “After years of a ‘wait and don’t see’ approach to the regulatory failures that led to the housing and the credit crisis, they have announced a plan that comes late and falls short.”

“No amount of rearranging the deck chairs can hide the fact that our housing and credit markets are in crisis and they are sinking deeper everyday. Everyday we fail to take aggressive action is a day lost.”

She also ripped into John McCain for his economic myopia. “Senator McCain recently gave a speech on the economy. And best I can determine, His plan was not to have a plan. If he got the 3am call on the economy, he would just let the phone ring and ring and ring.”

McCain may have been fair game, but Clinton declined to go after her Democratic rival — leaving that task to her supporter, Harrisburg Mayor Stephen Reed. “Senator Clinton didn’t just show up on our doorstep in 2008 and said ‘I’d like to be president because I think it’d be a neat thing,’” he said. “She’s been busy working for us for years and years and years and frankly, I’m getting a little tired of people who try not to give her credit for that.”

“Senator Clinton has been working for us and it didn’t start when she became a candidate for president. It didn’t even start when she became a candidate for the United States Senate in our neighboring state. She’s a Pennsylvanian who cares about American values and Pennsylvania values.”

But in a series of TV interviews, Clinton herself questioned why her Democratic opponent want her to drop out. “I didn’t understand why Senator Obama and some of his supporters wanted to prevent you and other states from actually being able to vote,” she told a Wilmington, NC television station. “A lot of Sen. Obama’s supporters want to end this race because they don’t want people to keep voting,” Clinton said in an interview with a television station in Billings, MT. “People don’t want this election taken away from them by the media or somebody sitting in an office in Washington.”

Sen Clinton later told a crowd in the Philadelphia area that she had no intentions of dropping out of the race. “This is a momentous election, and I know that we have three people, Senator McCain, Senator Obama and myself and all of you who are voters in Pennsylvania have to make a choice, first now in the Democratic primary, and then in the general election,” she said. “I see that sign out there that says please don’t quit. Well one thing you know about me is I do not quit. I believe this country is worth standing up for, this country is worth fighting for, and this country is sure worth voting for on April 22nd”

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Sen. McCain hit back at Obama after the IL Democrat attacked the mortgage plan he announced yesterday.

Speaking to the press aboard his plane Wednesday during a flight to Monterey, CA, he said, “I know that Senator Obama wants to raise taxes. He’s a - If he wants to do that, fine, but I think that’s the worst thing that we can do to the American people right now in this very difficult economic challenges. But I’ll do whatever’s necessary to help the homeowner and that legitimate homeowner and we may have to do more, but to raise taxes as Senator Obama wants to do or some kind of massive bail out that is a needless expenditure of taxpayer’s dollars is something that I don’t support. This is sort of in a way the classic contrast between a far left, liberal Democrat and a conservative republican. Senator Obama believes that the government should do everything, I believe that the government should do as little as possible.”

Santa Ana, CA — Sen. John McCain called for a cautious approach to the current economic situation, criticizing Democratic proposals for increased government intervention as he laid out his economic principles before a group of Golden State business leaders.

“I have always been committed to the principle that it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers. Government assistance to the banking system should be based solely on preventing systemic risk that would endanger the entire financial system and the economy,” McCain said in a speech before about 300 small business leaders before taking questions from the group. “Any assistance for borrowers should be focused solely on homeowners…(and) must be temporary and must not reward people who were irresponsible at the expense of those who weren’t.” (Full remarks below)

While noting that he is open to “any and all proposals” and he will not “allow dogma to override common sense,” he dismissed Sen. Hillary Clinton’s proposal for the creation of a $30 billion federal fund to buy out troubled mortgages.

“I am open to ideas. That idea, I believe, is a very expensive one. I don’t believe it works. And I’d like to know how its paid for,” McCain told reporters after the event.

McCain also expressed optimism during the roundtable that he is “hopeful that the worst is over,” noting that yesterday’s housing reports showed a “little glimmer of hope.”

“I believe I can tell you that I think that perhaps we are seeing the worst of…(the) subprime lending crisis which then led to the collapse or dramatic fall..in home values,” he said. “I think we may be seeing the beginning of the end of that.”

Among the immediate policy proposals McCain called for Tuesday:

• the nation’s top mortgage lenders to meet and “do everything possible to keep families in their homes and businesses growing.
• top accounting professionals to assess current systems.

The initial remarks took on a more formal feel than most McCain campaign events–with the AZ Senator delivering prepared remarks using a teleprompter.

At an availability later Tuesday, Clinton responded to McCain’s speech as a plan for “further inaction.”

“It sounds remarkably like Herbert Hoover and I don’t think that’s a good economic policy. We have a framework of regulation, it needs to be updated and modernized. The government has a number of tools at its disposal that are well-suited for just this situation,” she said. “I think that inaction has contributed to the problems we face today and I believe further inaction would exacerbate those problems…I don’t think it’s an adequate response to say the government shouldn’t be helping either banks or people because I think that would be a downward spiral that would cause tremendous economic pain and loss in our country and I don’t see why we should wait by for that to happen.”

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The Fox News Sunday panel chimed in on the topic this morning. What do you think?

At a rally in Bangor, Maine, today co-Democratic frontrunner Barack Obama talked more than usual about the likely Republican nominee, John McCain.

“I honor John McCain’s half century of service to this country and you know, he has done some heroic stuff,” he started pleasantly enough. “But his basic proposals are to perpetuate the failed Bush domestic policies and the failed Bush foreign policies,” Obama continued to applause from the 7,000 in the Bangor Auditorium. Obama then spent several minutes knocking McCain on the economy, earmarks, and the Iraq war, before bringing his chief Democratic rival back into the fray.

“Awhile back [McCain] was interviewed and he said, ‘You know what? I’m not really good with the economy.’ He said, ‘I bought Alan Greenspan’s book. I’m reading up to find out what’s going on.’ You don’t need to read Greenspan’s book, you need to go to Nicky’s Diner and talk to folks and find out what’s been happening in the economy here in the United States of America,” Obama said, referring to the local diner where earlier in the afternoon he met with four locals to talk about middle class tax fairness. “You don’t need to read a book. Talk to some of those workers who’ve been laid off. Talk to those retirees who are, have to figure out how to pay for the heating bill. You know, John McCain used to oppose the Bush tax cuts. He said it was it was irresponsible to cut taxes for the wealthy when we were going into war. And then he started running for president and suddenly he’s for ‘em. I’m happy to have that debate, because he was right the first time and he is wrong now and we are gonna convince the American people that we need a new direction.”

The crowd erupted into applause, but Obama wasn’t done yet. “I am happy to have a debate with John McCain about fiscal responsibility,” he continued. “He goes out there and complains about earmarks, but it was his party, the Republican Party under George Bush and a Republican Congress, that presided on the biggest increase in pork barrel spending that America has ever seen, and that is what we’re gonna change when I’m president of the United States of America.”

He saved his biggest criticism of McCain for last. “And when it comes to foreign policy, John McCain says he wants to fight a 100 year war! ‘A hundred years,’ he said. ‘As long as it takes.’ That is not designed to make us safer. That is simply stubbornness. That is designed to try to make a bad decision look better,” Obama declared.

And then he remembered that candidate he has to overcome before he has that much-talked about debate with McCain. “By the way, you know, it is gonna be a lot easier for me to have that debate with John McCain than Senator Clinton ’cause she supported the war. So, you know, John McCain won’t be able to say that I supported the war in Iraq ’cause I didn’t. He won’t be able to say that I gave George Bush the benefit of the doubt when he was beating the war drum against Iran because I haven’t given him support on that the way Senator Clinton did. We can offer a clear contrast on foreign policy in this next election and move us in a new direction. That’s why I’m running for president of the United States of America.”

At a press availability in Los Angeles this morning, Senator Obama called the debate last night a “good” one and then highlighted the differences between Hillary Clinton and himself on the issues of Iraq, health care, and special interests.

He also stressed that he has done more than any other to engage people “who otherwise would not participate” in the political process, which is why he believes he would be more successful in a general election than Clinton. “I’m confident I will get her votes if I’m the nominee. It’s not clear that she would get the votes I got if she were the nominee,” he said, referring to the constituents who would be more inclined to vote for Obama, but not Clinton.

He’s also confident that, in an Obama-McCain match-up, he would take the Independent vote. Watch his explanation here:

Obama then flew to New Mexico, where he delivered a speech on the economy - and took a swipe at the Republican frontrunner for his position on tax cuts. “There was a time when Senator McCain courageously defied the fiscal madness of massive tax cuts for the wealthy in the midst of a costly war.  But that was before he started running for the Republican nomination and fell in line.  Now he wants to make permanent the tax cuts he once denounced. Well I haven’t changed my mind.  They have been an economic disaster for America, and I will end them when I am President,” Obama said.