McCain offers economic plans, Obama picks up steam

McCain also proposed relief for Americans who were counting on investment income to send their children to college or pay the mortgage.

Internal Revenue Service rules say Americans can only deduct $3,000 in stock losses in any given year. McCain would expand that deduction to $15,000 a year for the tax years 2008 and 2009.

Saying he wanted to "revive the market by attracting new investment," McCain proposed a two-year cut in the capital gains tax on stock profits, from 15 percent now on stocks held a year or longer to 7.5 percent -- a $10 billion proposal.

In a proposal aimed at helping Americans who have been laid off from their jobs, McCain said would suspend the tax on unemployment insurance benefits in 2008 and 2009.

McCain repeated his support for a $300 billion plan for the government to buy troubled loans from homeowners and restructure them into more affordable mortgages.

The Obama campaign dismissed McCain's plan. "John McCain's latest gambit is a day late and 101 million middle-class families short. McCain's plan would spend $300 billion to bail out the same irresponsible Wall Street banks that got us into this mess without doing anything to help jump-start job growth for America's middle class," said Obama spokesman Bill Burton.

McCain, accused by the Obama campaign of helping deregulate the financial industry, called for more oversight of Wall Street to avoid a repeat of a lax environment that fostered the housing crisis at the root of the meltdown.

On the eve of the debate, McCain and running mate Sarah Palin headlined a Republican fundraiser in New York. The event, where attendees paid at least $2,300 a plate, was expected to rake in more than $8 million, mostly due to Palin's celebrity status among Republican donors, a campaign aide said.

(Additional reporting by Arshad Mohammed; writing by Steve Holland; editing by David Wiessler and Cynthia Osterman)