Campaign09

NEW YORK (CBS) ― Democrat Barack Obama said Thursday tougher government regulations that reflect the realities of modern finance are needed to get a grip on the economy before it gets even worse. Rival Hillary Rodham Clinton said Republican nominee-in-waiting John McCain isn't prepared to handle a call about an economic emergency.

Obama is trying to convince the Democrats that the race with Clinton is all but over. Her goal is to continue to plant a seed of doubt about him.

"It is time for a president who is ready on day one to be commander in chief of our economy," she said. "Sometimes the phone rings at 3 a.m. at the White House and it's an economic crisis and we need a president who is ready, willing and able to answer that call."

"The phone is ringing, and he would just let it ring and ring," Clinton said, echoing the "3 a.m. phone call" TV ad she used earlier to suggest she was more qualified than Obama to handle a national security crisis. This time, she chastised the Arizona senator for opposing government intervention in the nation's credit and mortgage crisis.

The two Democratic contenders offered competing plans to tackle U.S. economic challenges: Clinton proposed a $2.5 billion job retraining program and Obama urged greater oversight of U.S. financial markets.

"We do American business — and the American people — no favors when we turn a blind eye to excessive leverage and dangerous risks," Obama said.

The presidential candidate spoke not far from Wall Street, hard hit by the mortgage meltdown and credit problems.

To fix the economy, Obama proposed relief for homeowners and an additional $30 billion stimulus package to address the nation's economic woes.

"If we can extend a hand to banks on Wall Street, we can extend a hand to Americans who are struggling," he said.

New York Mayor Michael Bloomberg, the almost candidate, warmly introduced Obama but stopped short of an endorsement.

Bemoaning the nation's economic woes, Obama, like Clinton, dismissed McCain's approach as pure hands-off. On Tuesday, McCain derided government intervention to save and reward banks or small borrowers who behave irresponsibly though he offered few immediate alternatives for fixing the country's growing housing crisis. Obama said McCain's plan "amounts to little more than watching this crisis happen."

Instead, Obama said, the next president should:

_Expand oversight to any institution that borrows from the government.

_Toughen capital requirements for complex financial instruments like mortgage securities.

_Streamline regulatory agencies to end overlap and competition among regulators.

While he laid out a half-dozen principles for closer scrutiny of the financial markets, he offered no specifics, such as which agencies should be reorganized or exactly how the government should go about peering over the shoulders of bank executives.

At a community college in Raleigh, North Carolina, Clinton focused on job insecurity and said the government needed to step up its responsibility for helping displaced workers. The state holds its primary May 5.

"Our government is more focused on how you lost your job than how you can find a new one," Clinton said. "And while we have been rightly focused on trying to help people who are out of work, there's been too little thought and effort to help people gain new skills while they still have their existing jobs."

Among other things, the former first lady called for a new program to extend federal aid known as Pell Grants to workers enrolled in education programs aimed at updating their skills. She also promoted a pre-emptive training initiative to allow workers concerned about potential threats to their jobs to receive grants to help transition into other industries.

Even before the Democrats delivered their speeches, McCain said in a statement, "There is a tendency for liberals to seek big government programs that sock it to American taxpayers while failing to solve the very real problems we face."

The political debate comes as a new government report shows the economy nearly sputtered out at the end of the year and is probably faring even worse amid continuing housing, credit and financial crises.

The Commerce Department reported that gross domestic product — the value of all goods and services produced in the country — increased at a feeble 0.6 percent annual rate in the October-to-December quarter. The reading — unchanged from a previous estimate a month ago — provided stark evidence of just how much the economy has weakened. In the prior quarter, the economy clocked in at a sizzling 4.9 percent growth rate.

(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)