Obama attacks McCain mortgage bailout plan

By Caren Bohan

DAYTON, Ohio (Reuters) - Democratic presidential nominee Barack Obama accused Republican John McCain on Thursday of backing a mortgage bailout plan that would reward banks responsible for the U.S. housing crisis, as he sought to press a perceived advantage on economic issues.

"We have to act to fix our broken economy and restore the credit markets," Obama said at a rally in Ohio, one of the key battleground states for the Nov. 4 election. "But taxpayers shouldn't be asked to pick up the tab for the very folks who helped create this crisis."

At a debate with Obama in Nashville, Tennessee on Tuesday, McCain proposed the U.S. government buy up troubled loans from people who have seen their home values fall below their debt.

The loans would then be structured into more affordable mortgages. The Arizona senator has called the plan a "a critical first step" to get through the crisis.

The U.S. housing crisis was the seed for the mushrooming Wall Street financial mess that has cost U.S. investors trillions of dollars and put the United States on the brink of a deep recession.

Illinois Sen. Obama, who polls show is more trusted by Americans on economic issues, dismissed McCain's mortgage plan as not "particularly new" and said he had himself proposed a version of it before McCain as a tool to help homeowners stay in their homes.

"But I also said at the time that this should not be a vehicle to reward banks and lending institutions that recklessly wrote bad loans," Obama said. "It should not be a bailout for the high-rolling real estate speculators who took those loans to make a quick buck."

Obama, 47, is riding an advantage in national opinion polls and in several states that hold the key to the election. Obama has built a 4-point lead over McCain in Reuters/C-SPAN/Zogby poll released on Thursday.