Clinton upstages Republicans with stimulus plan

LOS ANGELES Fri Jan 11, 2008 6:02pm EST

1 of 14. Democratic presidential candidate Sen. Hillary Clinton (D-NY) takes questions for the audience after speaking about America's economy at the IBEW Local 11 Electrical Training Institute in Commerce, California just outside of Los Angeles, January 11, 2008.

Credit: Reuters/Danny Moloshok

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LOS ANGELES (Reuters) - Democratic presidential contender Hillary Clinton on Friday proposed $70 billion in emergency spending to stave off a possible U.S. election-year recession, upstaging Republican rivals who clashed over the economy but offered few specifics.

The New York senator, who hopes to become the Democratic nominee in the November election, proposed $30 billion to help low-income families hit by the mortgage crisis and $40 billion in other spending, mainly for the poor and unemployed.

The former first lady, trying to build momentum after her narrow New Hampshire primary victory over Illinois Sen. Barack Obama, also urged Congress to prepare an additional $40 billion in tax rebates for low- and middle-income families to be implemented if the initial stimulus fails.

Clinton released her economic proposals amid warnings that a recession is increasingly likely. Federal Reserve Chairman Ben Bernanke hinted at "substantive" interest rate cuts on Thursday and President George W. Bush is considering his own economic stimulus package.

"I don't think we can wait. ... Too many people will be hurt, too many jobs will be lost, too many homes will be foreclosed on," Clinton said, urging the Congress to work with the president to avert a slide toward recession.

The plan immediately came under fire, with a spokesman for Republican presidential candidate Mitt Romney charging the plan increases spending, "ignores innovation and instead grows the size and role of government."

ROMNEY AND MCCAIN DUEL

Clinton released her plan, which aides said would be a one-time program paid for by government borrowing, as Republican presidential rivals John McCain and Romney dueled over economics on Friday.

They offered few specifics and focused their attention on the economic situation in Michigan and South Carolina, which hold the next state contests to nominate party candidates for the November election.

Returning to a theme of Thursday's Republican debate, McCain criticized Romney for suggesting jobs in hard-hit industries like textiles in South Carolina and car manufacturing in Michigan could return to previous levels.

"There are some jobs that left this state that aren't coming back," the Arizona senator told supporters at Applewood House of Pancakes in Pawley's Island, South Carolina.

"For anybody to say that they're all coming back and the textile industry is going to be restored where it was, you know better than that," said McCain, calling for government aid to retrain people who lose their jobs to global competition.

Romney, a former Massachusetts governor and corporate turnaround specialist, told supporters in Warren, Michigan, "I'm not willing to accept defeat like that.

"It is unacceptable to me to see any job go away, I will fight for every good job in Michigan and for America."

Romney, who placed second in the nominating contests in Iowa and New Hampshire, badly needs a victory in Michigan, the state where he was born and where his father served as governor in the 1960s. But he is trailing McCain in polls there and in South Carolina.

Former New York Mayor Rudy Giuliani, campaigning in Florida, ducked a question about whether the economy was in recession but said a tax cut he proposed this week would benefit middle-income Americans by an average $3,000 a year.

"I think that would really stimulate our economy right now," he said.

(Additional reporting Jeremy Pelofsky in Michigan, Andy Sullivan in South Carolina, Svea Herbst-Bayliss in Massachusetts, writing by David Alexander, editing by Alan Elsner)

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