Presidential Candidates Spar on Economy

John McCain said Friday the Federal Reserve needs to stop bailing out failed financial institutions.

The Republican presidential hopeful said the Fed should get back to "its core business of responsibly managing our money supply and inflation" and he laid out several recommendations for stabilizing markets in the financial crisis that has rocked Wall Street and commanded the dialogue in the presidential campaign.

McCain made little mention of the massive proposal being crafted by Treasury Secretary Henry Paulson that could amount to a $1 trillion taxpayer bailout of the mortgage industry. McCain said simply that leaders should put aside partisan differences and "any action should be designed to keep people in their homes and safeguard the life savings of all Americans."

The Arizona senator also criticized Democratic rival Barack Obama for ties to Freddie Mac and Fannie Mae and for advocating tax increases McCain said would "turn a recession into a depression."

Meanwhile, Democratic presidential nominee Barack Obama said Friday he backs giving "broad authority" to the Treasury Department to deal with the burgeoning credit crisis, but said he's not spelling out details of his own plans to avoid roiling the markets.

Obama said at a Florida news conference that given the gravity of the situation, he will refrain for now from presenting a more detailed blueprint. He said any recovery plan should be guided by not rewarding reckless business leaders.

"What we have to do is make sure taxpayer money is not being used to bail out bad decisions," he said. He refused to put a price tag on a bailout he could support, but said it would not bar him from pushing for middle-class tax cuts that have been central to his campaign.

"I think now more than ever we have to have the broad-based middle-class tax cuts," Obama said.

Obama huddled with economic advisers to talk about a credit crisis that is rapidly moving to the front of this competitive election season. He is seeking a balance between offering stability and blaming the crisis on what he said were failed economic policies that John McCain would continue.