Candidates Clash Over Economic Policy

Democrat Barack Obama ridiculed Republican presidential rival John McCain on Wednesday for what he called a "sit back and watch" approach to the economic troubles gripping the nation.

Back campaigning after a brief family vacation in the Caribbean, the presidential candidate focused on the housing crisis that has rocked Wall Street and the economic downturn that has forced the Federal Reserve to intervene. And after days of sniping with rival Hillary Rodham Clinton's campaign, Obama turned his attention to McCain.

On Tuesday, McCain derided government intervention to save and reward banks or small borrowers who behave irresponsibly and offered few immediate alternatives for fixing the country's growing housing crisis.

"John McCain has admitted he doesn't understand the economy as well as he should, and yesterday he proved it in giving a speech on the housing crisis," Obama told an auditorium of supporters.

Obama pointed out that McCain "said the best way for us to address the fact that millions of Americans are losing their homes is to just sit back and watch it happen. In his entire speech yesterday, he offered not one policy, not one idea, not one bit of relief to the nearly 35,000 North Carolinians who are forced to foreclose on their dreams in the last three months."

It's the housing crisis which threatens the American Dream most immediately and which will test the next president, reports CBS News correspondent Dean Reynolds.

McCain advocates lending reforms but is reluctant to intervene heavily, believe that would penalize taxpayers who played by the rules, Reynolds reports. Clinton offers a $30 billion emergency stimulus to help those at risk, while Obama would fund his $10 billion plan with money saved over time by ending the war in Iraq.

North Carolina holds its primary May 6 with 115 delegates at stake.

"John McCain may call helping struggling homeowners pandering, but I don't think the families in North Carolina who are losing their homes would see it that way," said Obama, who is due to give what aides are billing as a major economic speech Thursday in New York.

In response, McCain said he clearly is in favor of doing more for homeowners.

"I'll do whatever's necessary to help the homeowner, the legitimate homeowner, and we may have to do more," McCain told reporters in California. "But raise taxes as Senator Obama wants to do or some kind of massive bailout that is a needless expenditure of taxpayer dollars is obviously something that I don't support."

In California on Tuesday, McCain said he wants to leave the door open to an array of proposals to address the problems and seemed to suggest he might even be open to solutions that stray from the GOP line.

"I will not play election-year politics with the housing crisis," he said, adding he would evaluate all proposals. "I will not allow dogma to override commonsense."

But the small-government advocate and four-term Arizona senator also put restrictions on how far he was willing to go, saying: "it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers."

In Greensboro, Obama used a question about his Christianity to again address the incendiary comments made by his former Chicago pastor, Jeremiah Wright.

"We can't afford to be distracted ... every time somebody somewhere says something stupid that everybody gets up in arms and we forget about the war in Iraq and we forget about the economy," Obama said.

Many in the crowd Wednesday were college students, in a town where students once played a defining role in U.S. history. In 1960, a year before Obama was born, black students staged sit-ins at a whites-only lunch counter at a Woolworth's five-and-dime in downtown Greensboro, an act of civil disobedience that spread throughout the South.