McCain pushes for tax cuts to ease economic pain

ST. PAUL (Reuters) - Sen. John McCain said on Thursday many Americans were struggling to find jobs and pay rising food and fuel bills, and predicted the tax cuts he would support as president would spur economic growth.

Accepting the Republican party's presidential nomination on a day when Wall Street suffered its steepest decline in more than two months on concerns about a weakening job market, McCain also vowed to improve assistance for workers displaced by trade.

"These are tough times for many of you," McCain said.

"You're worried about keeping your job or finding a new one, and are struggling to put food on the table and stay in your home. All you ever asked of government is to stand on your side, not in your way. And that's just what I intend to do: stand on your side and fight for your future."

Opinion polls show that the economy has supplanted the Iraq war as the No. 1 issue two months before the election. The housing bust, financial market turmoil and rising inflation threaten to trigger a recession.

"I will keep taxes low and cut them where I can," McCain said. "My tax cuts will create jobs."

Earlier on Thursday his Democratic opponent in the November 4 election, Sen. Barack Obama, criticized the McCain campaign for hardly mentioning the country's economic problems during the four-day Republican National Convention in St. Paul.

TAXES

McCain contrasted his economic policies with Obama's, saying he would cut taxes and create jobs while Obama would raise taxes and eliminate jobs.

He said Obama's health care plan "will force small businesses to cut jobs, reduce wages and force families into a government-run health care system where a bureaucrat stands between you and your doctor."

On trade, he said government assistance for workers was outdated and pushed for community colleges to retrain workers. Democrats in Congress have blocked several White House-backed trade deals because they want more worker and environmental protections put in place.

Energy was an integral part of McCain's economic policy, and he pledged to "attack the problem on every front."

"We will produce more energy at home. We will drill new wells offshore, and we'll drill them now. We will build more nuclear power plants. We will develop clean coal technology. We will increase the use of wind, tide, solar and natural gas. We will encourage the development and use of flex fuel, hybrid and electric automobiles," he said.

Former House of Representatives Speaker Newt Gingrich said the economy would be a major part of the September and October presidential debates, and the decision would come down to a question of bigger government or lower taxes.

"Sen. Obama will argue that government bureaucracies can accomplish a lot of good things for the economy," he told Reuters in an interview. "Sen. McCain will argue that entrepreneurs and small business are the key to the economy. And the country is going to have to choose which of those two solutions it thinks will work."

BALLOONING DEFICIT

Regardless of which party wins, the next president will have to tackle a ballooning federal deficit that Goldman Sachs estimates will be at least $440 billion in 2009. That will limit the next administration's spending ability.

Economists widely expect the economy to weaken through the end of the year as job losses mount and the credit contraction chokes off money to consumers and companies.

Government stimulus checks sent to households in the late spring and summer helped to prop up growth in the second quarter, but the benefits are beginning to fade.

Jack Ablin, chief investment officer at Harris Private Bank in Chicago, likened the stimulus checks to "feeding Krispy Kreme doughnuts to a marathon runner. If we keep feeding the beast, it will continue to run. Unfortunately, the Treasury just doesn't have that many doughnuts."

(To see the full video interview with Gingrich, click here)

(Additional reporting by Corbett Daly in St. Paul; Editing by Jackie Frank and Howard Goller)