(Agencies)
Updated: 2008-02-29 09:08

AUSTIN, Texas -- Democratic candidate Barack Obama said Thursday the economy is "on the brink of a recession" and blamed economic policies espoused by President Bush and Republican presidential contender John McCain.

Democratic presidential hopeful Sen. Barack Obama, D-Ill., speak about strengthening America's economy during a town hall meeting Thursday, Feb. 28, 2008, in Austin, Texas. [Agencies]

Obama mocked a more optimistic economic picture painted by Bush at a White House news conference just moments earlier: "People are struggling in the midst of an economy that George Bush says is not a recession but is experienced differently by folks on the ground."

For the second day in a row, Obama focused on the likely GOP nominee McCain and all but ignored Hillary Rodham Clinton's continuing campaign for the Democratic presidential nomination, although key Democratic primaries come up next Tuesday in Texas and Ohio.

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"We are not standing on the brink of recession because of forces beyond our control," Obama told a town hall forum in Austin. "This was not an inevitable part of the business cycle. It was a failure of leadership in Washington -- a Washington where George Bush hands out billions of tax cuts to the wealthiest few for eight long years, and John McCain promises to make those same tax cuts permanent, embracing the central principle of the Bush economic program."

In remarks Obama aides suggested were a rebuke to McCain as well as Bush, Obama said more is needed than just "to change faces in the White House," but that the country "needs a change of leadership"

The Illinois senator spoke shortly after Bush told a news conference in Washington that the country is not headed into a recession. While expressing concern about slowing economic growth, Bush rejected for now any additional stimulus efforts.

"We've acted robustly," Bush said. His forecast was rosier than that of many mainstream economists.

Obama offered a sharply different view: "Despite the slogans,we've got millions of Americans that are being left behind."

He said he was "the only candidate in this race to propose a genuine middle-class tax cut." And he added, the nation needs as president a leader who "doesn't defend lobbyists as part of the system, but sees them as part of the problem."

In focusing on McCain, Obama is pursuing a strategy of acting as if the Democratic nomination were already his. On Wednesday, Obama and McCain sparred by long distance over Iraq.

Speaking later with reporters, Obama said he mentions McCain so much mainly because "it just seems like John McCain is talking about me a lot." He said he wasn't writing an obituary on Clinton's candidacy: "Well, I am not. Remember New Hampshire," where Clinton won an upset victory over Obama.

He said the Ohio and Texas races are extraordinarily tight but suggested they weren't must-win states for him.

He said if he comes out of Tuesday's four contests -- including Rhode Island and Vermont -- still leading Clinton by 100-150 pledged delegates, he would go to the convention with the most pledged delegates "and believe that we should be the nominee."

He now has a lead of 151.5 pledged delegates, according to the Associated Press count. Adding superdelegates who are not bound by primary or caucus results, Obama has a lead of 102.

In a telephone interview from Texas with the Cincinnati Enquirer editorial board, Obama said he would be more willing than Clinton to work with Republicans. "Her natural inclination is to draw a picture of Republicans as people who need to be crushed and defeated," Obama said, adding, "It's not entirely her fault. She's been the target of some unfair attacks in the past."

"I'm not a person who believes any one party has a monopoly on wisdom," Obama said.

Bush, meanwhile, joined McCain in mocking Obama's statement that he would consider post-withdrawal military action in Iraq if al-Qaida established a base. "Well, that's exactly what they've been trying to do for the past four years," Bush said.

Unlike Obama, Clinton refers to her Democratic opponent often on the campaign trail in her stump speech and in casual talks with voters.

She did so again Thursday in Pomeroy, Ohio, talking with about 10 people in a mobile home in a heavily rural county where the poverty rate approaches 20 percent.

"I have a plan that would cover everybody, my opponent does not," she said. "He would leave 15 million people out. It's like Social Security. Everybody's in Social Security. That's what we have to do with health care."

The centerpiece of government efforts to brace the wobbly economy is a package Congress passed and Bush signed last month. It will rush rebates ranging from $300 to $1,200 to millions of people and give tax incentives to businesses. Bush claims no further incentives are needed -- and those should be given a chance to work first.

"We can't afford to wait," Obama said in Austin. "News on our economy has not been getting better, it's been getting worse."

Obama has proposed rolling back Bush tax cuts plus a tax credit covering 10 percent of annual mortgage interest payments for "struggling homeowners," a fund for mortgage-fraud victims, aid to state and local governments stung by housing crisis, in $20 billion plan geared to "responsible homeowners."

He would raise income taxes on wealthiest and their capital gains and dividends taxes, raise corporate taxes and give $80 billion in tax breaks mainly for poor workers and elderly.

McCain proposed cutting the corporate tax rate to 25 percent from 35 percent. He would also establish a permanent research and development tax credit and allow tax breaks for equipment and technology investment.

The McCain plan does not contain additional tax relief for individuals beyond previous proposals to repeal the Alternate Minimum Tax, a tax originally designed to fall on the wealthiest but which each year snags more middle-income taxpayers who claim a lot of deductions; and extension of expiring tax cuts from Bush's first term.

Clinton has proposed a 90-day freeze on home foreclosures arising from subprime lending, and a freeze on subprime lending rates, in a $30 billion plan. She would raise income taxes on wealthiest and keep the estate tax on them. She backs higher tax breaks for college. Also, she would tax a portion of health insurance benefits provided to workers making more than $250,000. She proposes a $1 billion paid family leave program to be financed by eliminating some tax shelters.