McCain Proposal Seeks Tax Breaks Worth $52 Billion

On Tuesday, he went further, saying that the government should commit new money to reduce the impact of wildly fluctuating stock prices on average people.

McCain made his tax-cut proposals as President Bush announced a $250 billion plan to have the federal government inject money into the economy by investing in private banks.

The Republican nominee did not directly comment on the announcement, but he warned that as president he would require that government investment end once the private banks and institutions are restructured and healthy.

"And when that is accomplished, in each instance, government will relinquish its interest in these private companies," McCain said. "We're going to get government out of the business of bailouts and equity stakes, and back in the business of responsible regulation."

Obama was more direct but offered only lukewarm support, along with multiple caveats, to the president's idea. He called the proposal "the right one," but added, "We must make sure this plan is implemented in a way that helps homeowners and does not enrich Wall Street CEOs at the taxpayers' expense."

In the three weeks since the economic crisis began, McCain and Obama have shadowed each other, responding by slowly rolling out proposals as stocks plunged and confidence in the economy ebbed.

Obama proposed a mortgage tax credit worth 10 percent of the mortgage interest a homeowner pays. And last week he suggested creating an emergency lending fund to make loans to small businesses.

On Monday, he added a temporary tax credit for firms that create jobs, a 90-day foreclosure moratorium for homeowners making "good-faith efforts" to keep up with their mortgage payments, and a new entity to lend to state and local governments.

The Democratic nominee also aimed some relief at those needing money from retirement accounts, allowing families to take out up to 15 percent of their savings up to $10,000 from 401(k) plans without penalty. And, like McCain, Obama called for the temporary elimination of taxes on unemployment insurance benefits.

On Tuesday, McCain was gloomy about the immediate situation but was optimistic about the future, saying the country will prosper and will be safer. He described his new proposals as an effort to "revive the market by attracting new investment."

Staff writer Shailagh Murray contributed to this report.