McCain and Obama clash on economy

CEDARBURG, Wisconsin (Reuters) - Presidential rivals John McCain and Barack Obama, back on the campaign trail after their party conventions, clashed over the ailing U.S. economy on Friday as unemployment hit its highest monthly rate in nearly five years.

Hours after accepting the Republican nomination, McCain and running mate Sarah Palin opened a two-month sprint to the November 4 presidential election in Wisconsin while Democrat Obama headed to Pennsylvania as both sides touted cures for the economy.

A new report showed the U.S. jobless rate unexpectedly shot up to 6.1 percent in August, adding to worries about an economy that opinion polls show was already the top concern for American voters.

"These are tough times," McCain told a crowd of some 12,000 in the Milwaukee suburb of Cedarburg. "Today the jobs report is another reminder.

"All you've ever asked of government is to stand on your side, not in your way, and that's what I intend to do," the Arizona senator said, pledging to keep taxes low and cut them where possible. He issued a statement promising to retrain workers and enact an economic plan that would create jobs.

McCain, who later picked up the endorsement of the Fraternal Order of Police union, rapped Obama's tax proposals, which include a large tax cut for lower- and middle-class workers but would increase taxes for the wealthiest Americans. "The American people cannot afford a Barack Obama presidency," he said in the statement.

Obama, an Illinois senator, said the job losses showed the need for change in the economic approach used by President George W. Bush since he came into office in 2001.

Speaking to workers at a glass and lens manufacturer in Duryea, Pennsylvania, and chatting with customers while eating banana cream pie at The Avenue Diner in Wyoming, Pennsylvania, Obama chided McCain for failing to address the economy at the Republican convention.

"You would think George Bush and his potential Republican successor John McCain would be spending a lot of time worrying about the economy, all these jobs that are being lost on their watch," Obama said.

"But if you watched the Republican national convention over the last three days you wouldn't know that," he said. "We have highest unemployment rate in five years but they didn't say a thing about what is what going on with the middle class."

"HE JUST DOESN'T GET IT"

Obama portrayed McCain as being out of touch with ordinary American workers.

"John McCain the other day said that he thought the economy was fundamentally sound," he said. "Well what's more fundamental than having a job?

"He just doesn't get it," Obama said. "I don't think they have a sense of what people are going through."

He touted his own plans for boosting the U.S. economy, saying he would enact tax cuts that would benefit 95 percent of Americans, end tax breaks for companies that ship jobs overseas and make health care more affordable.

The renewed battle on the economy came the day after McCain's acceptance speech concluded the Republican convention. Obama accepted the Democratic nod at his party's convention the week before.

Republican vice presidential candidate Sarah Palin, who repeatedly ridiculed Obama during her convention speech, campaigned with McCain in Wisconsin, again taking on the role of attacker by blasting Obama for his stance on the Iraq war.

She told the cheering Cedarburg crowd that Obama on Thursday night finally admitted the decision to boost troop levels in Iraq was successful and ridiculed him for saying it had "succeeded beyond our wildest dreams."

"I guess when you turn out to be profoundly wrong on a vital national security issue, maybe it's comforting to pretend that everyone else was wrong too," she said, adding that McCain was "one leader in Washington who did predict success, who refused to call retreat and risked his own career."

McCain has been one of the most outspoken supporters of U.S. military involvement in Iraq, while Obama touts his record of opposing the war from the start.

After Wisconsin, the McCain and Palin headed for Michigan, where they picked up the endorsement of the 327,000-member Fraternal Order of Police, and later Colorado, followed by New Mexico on Saturday. Obama was traveling across Pennsylvania to New Jersey, where he planned a fundraiser at the home of Jon Bon Jovi.

A record 38.9 million U.S. TV viewers -- more than one in 10 people -- watched McCain's acceptance speech to the convention, topping the 38.3 million people who watched Obama's the week before, Nielsen Media Research reported. Palin drew 37.2 million viewers.

McCain trails Obama slightly in most national opinion polls as they head into the election but he promised the Republican faithful at the convention he would win. Polls show majorities favor Obama's leadership on the economy, although McCain is usually favored on foreign policy issues.

With the conventions out of the way, the next big campaign milestone is the first of three debates, on September 26 in Oxford, Mississippi.