McCain competes with Obama and Clinton on economics

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John McCain on Tuesday called for federal gasoline taxes to be scrapped this summer as part of a raft of measures to relieve economic pressure on Americans.

By Andrew Ward in Washington

The Republican presidential candidate also stepped up criticism of the financial services industry for its role in the housing crisis and condemned “extravagant” executive pay.

The remarks came in the latest of a series of economic-focused speeches by Mr McCain as he attempts to convince voters that he understands their concerns.

He promised to “act quickly and decisively” to revive the economy and stabilise the housing market through lower taxes, aid to homeowners and tougher financial regulation.

“We need reforms that promote growth and opportunity . . . [and] rules that assure fairness and punish wrongdoing in the market,” he said.

The Arizona senator said he would push Congress to suspend the 18.4 cents a gallon tax on gasoline and 24.4 cents a gallon tax on diesel between May and September – a move his advisers said would cost $8bn-10bn in revenues.

He also reiterated his call for the government to stop adding to the US Strategic Petroleum Reserve so as to ease pressure on supplies. US crude oil prices rose to a fresh record high of $113.93 on Tuesday.

It appeared unlikely that Congress would adopt Mr McCain’s “gas tax holiday” before the summer, but his proposals demonstrated the pressure on presidential candidates to tackle soaring energy prices.

Mr McCain has become increasingly populist in tone over recent weeks as he competes with Barack Obama and Hillary Clinton, the Democratic presidential hopefuls, to appear most responsive to economic concerns.

In earlier speeches, Mr McCain had argued that homeowners and lenders should share responsibility for the housing turmoil and that neither should expect a bail-out.

But, facing criticism for his hands-off approach, the senator laid out plans last week for a limited aid package for some homeowners and yesterday focused blame for the crisis on irresponsible lenders.

“The foolish risk-taking of lenders, investment banks, and others that led to these troubles don’t reflect our free market as it should be working,” he said, calling for greater transparency, accountability and corporate responsibility.

He said Americans were “right to be offended” by “extravagant salaries and severance deals” of financial executives who helped create the crisis, singling out James Cayne of Bear Stearns and Angelo Mozilo of Countrywide for criticism.

Despite the hardening of his rhetoric against Wall Street, Mr McCain’s economic agenda remains largely pro-business and less interventionist than those of his Democratic rivals.

In his speech on Tuesday, he reiterated a long-standing proposal to cut corporate taxes to 25 per cent from 35 per cent and renewed his support for free trade, in contrast to the protectionist positions taken by Mr Obama and Mrs Clinton.

He attacked the Democratic candidates for plotting “the largest single tax increase since the second world war” by allowing President George W. Bush’s first term tax cuts to expire.

Other proposals included increased tax relief for families.

The Financial Times

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