Obama, Clinton say jobs drop shows need for jolt

WASHINGTON (Reuters) - Democratic presidential candidates Hillary Clinton and Barack Obama called on Friday for Congress to broaden its planned stimulus package after new data showed a drop in U.S. employment.

Both candidates, locked in a neck-and-neck battle to represent the Democratic Party in the November 2008 election, jumped on the news to tout their own economic plans and take a swipe at the Bush administration.

"Today's report that our economy actually lost jobs in January confirms my view that we are sliding into a second Bush recession," said Clinton, a New York senator.

Employers cut 17,000 non-farm jobs in January, according to the Labor Department, the first time in nearly 4-1/2 years that U.S. payrolls shrank as continuing losses in construction and manufacturing reflected the economy's waning momentum.

A $146 billion economic stimulus package agreed by the White House and House of Representatives must win the backing of the Senate but lawmakers there have a plan of their own that could slow the process.

Both Clinton and Obama said any stimulus package should extend unemployment benefits for those out of work.

Obama, an Illinois senator, said Congress should repeal tax cuts passed in 2001 and 2003 that mostly benefited the wealthy.

"It's time to turn the page on the failed Bush policies of tax breaks for those who didn't need them and didn't ask for them so we can put America back on the path to prosperity and opportunity," he said.

Both leading Republican presidential candidates, Arizona Sen. John McCain and former Massachusetts Gov. Mitt Romney, favor keeping the tax cuts in place. They are scheduled to expire at the end of 2010.

Obama and Clinton had both suggested stimulus plans weeks before the House passed its package, which is double the size of either candidate's proposal.

Clinton reiterated her call for help for those struggling with heating and mortgage bills, a central part of her $70 billion stimulus package.

Obama's $75 billion plan includes an immediate $250 tax cut for workers and a $250 bonus for retirees, which his advisors say would give the economy a more immediate jolt.

A Republican Party spokesman said both candidates would hurt the economy through excessive taxation and regulation.

Clinton's "'tax-it, spend-it, regulate-it' attitude would really bring the economy crashing down," said Republican National Committee spokesman Alex Conant. "Barack Obama's economic plans are so poorly crafted, Democrat leaders in Congress don't even consider his proposals."

(Editing by David Alexander and Bill Trott)

(For more about the U.S. political campaign, visit Reuters "Tales from the Trail: 2008" online at http:blogs.reuters.com/trail08/)