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.

Hillary Clinton finally made it back to South Carolina on Thursday, kicking off the final stage of her campaign here with what the campaign called a major economic speech focused on tacking the immediate and long-term economic challenges facing America. But if they thought it was major, they didn’t pretend it was new; the speech was largely centered on already-announced policies to stimulate the economy and fix the housing crisis.

She blamed the slide toward recession on President Bush’s “hands-off,” adviser-heavy approach to running the government — a trait she’s often ascribed to Barack Obama. The Illinois Senator has admitted he’s not much of a Chief Operating Officer, saying he would leave the day-to-day management of bureaucracy to others.

“We’re here in part because the President failed to listen to the voices of people who are hurting, failed to get involved in the actual work of running the government, and failed to act,” she said. “Instead, he has stayed at a comfortable cruising altitude, well above the realities of peoples lives, delegating responsibilities to his advisers, hoping the buck would stop somewhere else, anywhere else.”

And after bashing Obama for claiming the Republicans have been the party of ideas over the last decade, she also blamed the ideas of this administration for the economic downturn. “The problem with our economy is not the American people; instead, the problem is in part the bankrupt ideas that have governed us for the last 7 years.”

Finally, there was the familiar talk vs action theme that’s been the foundation of her campaign against Obama since Iowa. “The presidency matters more now than ever,” she said. “We need a president who will run the government and manage the economy. The American people don’t hire a president to talk about our problems, but to solve them; to set a vision for the future and then to roll up our sleeves and get about fulfilling it.”

“It’s time we had a president who believes leading an economic comeback is a full-time, hands on job.”

John McCain says he supports today’s interest rate cut by the Fed. He thinks lower interest rates and lower taxes are important in getting the economy back on track.

But McCain is cool to the idea of tax rebate checks. The Bush administration is said to be considering rebates of $800 per person as part of an economic stimulus package.

McCain has voiced doubts repeatedly at campaign events in the last week or so. Here’s a sample, from a rally last week in Hilton Head, South Carolina.

McCain’s economic advisor, Doug Holtz-Eakin, says it might be months before rebate checks are issued– past a timely window. But he says if the checks could be timely, well-targeted and temporary… and if no other viable option were on the table… then the Senator might endorse the idea.

McCain always insists that any economic strategy should include cutting spending. Some reporters and economists have challenged that theory because less spending takes money out of circulation.

Palm Beach Gardens, FL — Priority number one for Rudy Giuliani this morning was addressing growing concerns about the economy, a world-wide stock sell off and the decision by the Federal Reserve to slash interest rates.

“It’s something, we have to be very concerned about,” Giuliani said Tuesday outside of a meet and greet at a West Palm Beach-area deli. “The Fed is independent and I am sure they are doing the very best they can to deal with the monetary part of it. And I think the fiscal policies obviously have to be a very very strong stimulus package. I would like to see it more on the side of permanent relief meaning extending the Bush tax cuts (and) reducing the corporate tax….if we can get some control over that and have a stimulus package that puts a lot of emphasis on permanent change I think thats the best way to handle it.”

Giuliani also suggested Congress and the President work on a short term spending reduction program that will have a positive “psychological impact” on the markets by showing more fiscal discipline.

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In a statement released today, Democratic presidential candidate John Edwards defended his newly proposed economic stimulus package against criticism from his GOP rival Rudy Giuliani.

Edwards’ plan—which he unveiled Saturday while campaigning in Iowa—called on Congress to pass at least a $25 billion jobs plan in early 2008 and be ready to pass $75 billion more should there be signs of an economic recession. In addition, Edwards called for investing in clean energy initiatives, helping states afford programs to fight poverty, universalizing unemployment insurance, and addressing the housing crisis.

But the proposal was met with derision from Rudy Giuliani, who today on ABC’s “This Week” laughed when George Stephanopoulos described Edwards’ plan, saying, “That’s the usual Democratic-almost like you know, spend, spend, spend program.”

“Best thing to do is to not have government handouts available, big government handouts available,” Giuliani continued. “The best thing to do is to stimulate the private economy. A much better use of that would be a really good tax reduction, that would bring more jobs.”

In response to Giuliani’s remarks, Edwards issued the following statement:

“The average family’s income has actually decreased over the last seven years, at the same time the costs of health care, energy and housing are skyrocketing. But while hard-working families on Main Street are struggling to make ends meet, Giuliani is only concerned about the profits of his Wall Street buddies.”

The back and forth carping between the two candidates didn’t stop there. Giuliani’s replied by criticizing Edwards for his stance on the Iraq war and his blaming Bush for consequent economic strains on domestic programs:

“We’ve got a lot of problems, but it’s not George Bush and business,” Giuliani said. “George Bush made the right decision about Iraq, and we’ve got to stick with it.”