Obama blasts McCain on tax stance

WASHINGTON (Reuters) - Democrat Barack Obama took aim on Thursday at potential White House opponent John McCain, accusing the Arizona senator of switching his stance on tax cuts in order to help his bid for the Republican presidential nomination.

Obama, locked in a tight Democratic battle with Hillary Clinton for the right to face McCain in November's presidential election, noted McCain opposed President George W. Bush's tax cuts in 2001 and 2003 but now supported their extension.

"He made a decision to reverse himself on that, that was how I guess you got your ticket punched to be the Republican nominee," Obama told reporters. "But he was right then and he's wrong now."

McCain responded he looked forward to a potential debate on taxes with Obama during a general election campaign.

"Senator Obama has stated very clearly his desire to increase Americans' taxes. That'll be one of the great debates we have if he is the nominee of his party," McCain told reporters.

Obama, Clinton and McCain took a break from the campaign trail and spent time on Thursday at their day jobs in the U.S. Senate, where they cast votes on a budget blueprint for fiscal 2009.

Obama, an Illinois senator, and Clinton, a New York senator, called a truce in their fierce Democratic battle, shaking hands on the Senate floor and sitting down together for a brief chat.

All three senators, including McCain, voted for a Democratic proposal to permanently extend a 10 percent tax rate, mostly for low-income earners, along with a child tax credit and marriage penalty relief. All were all set to expire in 2010.

A Republican amendment that would have extended the remaining Bush tax cuts was defeated. McCain voted for it, while Obama and Clinton opposed it.

McCain says he opposed the tax cuts in 2001 and 2003 to prevent the budget deficit from growing and because they disproportionately favored the wealthy. He says he supports extending them now because they offer help to a struggling economy.

EARMARK BAN

All three senators backed an unsuccessful Senate proposal calling for a one-year ban on special spending projects requested by members of Congress known as earmarks.

On a procedural vote of 71-29, the Senate overwhelmingly killed the idea.

McCain, citing what he said was a strong public backlash outside of Washington against the projects, told reporters after the vote, "This may be the last bastion in America where they don't get it." Earmarks represent only about 1 percent of annual government spending.

Obama, who had already made public his earmark requests for 2007, released a list of his earmark requests for 2005 and 2006. He called on Clinton to do the same.

Obama holds a nearly insurmountable lead on Clinton in pledged delegates who will help decide the Democratic candidate at the party's convention in August.

With the two scratching for every available delegate, Florida Democratic Party officials unveiled a plan for a mail-in primary that would replace the state's disputed January 29 vote. Michigan officials are also working on a revote plan.

Florida and Michigan were stripped of their delegates in a dispute with the national party, but held unsanctioned contests won by Clinton anyway even though no candidates campaigned there and Obama was not even on the ballot in Michigan.

U.S. House Democrats from Florida oppose the state party's plan, which must be approved by the state party's executive committee and the national party, and the Obama campaign has expressed doubts about the viability of a mail-in vote.

Florida Democratic Party Chairwoman Karen Thurman said the plan, which would complete the revote, would not be adopted without widespread support from state Democrats and national officials.

"Let me be clear. This is by no means a done deal," Thurman said. "We are simply putting on the table what I believe is the only solution that we can provide from the state party."

Clinton has called for the delegations to be seated or a revote, but even her campaign was not ready to back the mail-in plan. "We are willing to review proposals and we will obviously be taking a close look at this one," Clinton spokesman Phil Singer said.

Neither Obama nor Clinton can reach the 2,025 delegates needed to clinch the nomination without help from nearly 800 superdelegates -- party insiders and officials free to back any candidate.

(Additional reporting by Donna Smith, Richard Cowan and Caren Bohan; Editing by David Wiessler and Peter Cooney)

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