Both Mr Obama and his Democratic rival, New York Senator Hillary Clinton, accused Republican candidate John McCain of supporting little to ease the current credit and housing problems, which drew a quick response from the McCain camp.

The focus on the economy mirrors its pressing importance for Americans. A Pew Research Center poll said people are as negative as they were during the recession of the early 1990s, with just 11 per cent rating the economy as excellent or good.

Mr Obama said on Thursday under Republican and Democratic administrations - a slap at Mrs Clinton's husband, 1990s Democratic President Bill Clinton - an era of financial deregulation created conditions that pushed the US economy to the brink of a new recession.

'It is time for the federal government to revamp the regulatory framework dealing with our financial markets,' the Illinois senator said in a wide-ranging speech on the economy.

In a month when the US Federal Reserve helped shore up the ailing financial system and financed the takeover of Bear Stearns, a major Wall Street investment firm, Mr Obama said the new rules should include liquidity and capital requirements for financial institutions.

'If you can borrow from the government, you should be subject to government oversight and supervision,' he said.

The Bush administration's two-year, US$168 billion stimulus package aimed at propping up the economy is about to take effect, with US$152 billion to be doled out this year.

Mr Obama proposed a further US$30 billion that would provide relief to areas hardest hit by the housing crisis and an extension of unemployment insurance for those out of work.

'If we can extend a hand to banks on Wall Street when they get into trouble, we can extend a hand to Americans who are struggling through no fault of their own,' he said to applause.

Mr Obama told CNBC he could support raising the capital gains tax on stock profits from the current 15 per cent up to 20 per cent or 25 per cent to pay for government spending elsewhere.

'I think that we can have a capital gains rate that is higher than 15 per cent,' he said.

Principles and problems
Mr Obama, who would be the first black US president, and Mrs Clinton are in a heated battle for the Democratic nomination to face Mr McCain, an Arizona senator, in the November presidential election.

In an effort to unite Republicans behind his candidacy, Mr McCain campaigned in Utah with former Massachusetts Governor Mitt Romney, who pulled out of the Republican presidential race in February.

'He is a man who is proven and tested, an individual who is without question the right person to be the next president of the United States,' said Mr Romney, who has roots in Utah.

Mrs Clinton, who would be the first woman president, called last week for a US$30 billion emergency fund to help ease the housing crisis. An estimated 4 million American homeowners are in danger of losing their houses.

'If Senator Obama has to copy policy ideas when he's a candidate on the campaign trail, how is he going to solve people's problems if he's president?' said Clinton campaign policy director Neera Tanden.

'When it comes to fixing the economy, we need leadership, not 'followership'.' Mrs Clinton turned her fire on Mr McCain in an economic address in Raleigh, North Carolina, saying he had supported 'virtually nothing' to ease the current crisis.

While describing Mr McCain as 'a friend of mine', Mrs Clinton said: 'He'd rather ignore the credit crisis and mortgage crisis - or blame middle-class families - instead of offering solutions on their behalf.'

Mr McCain, who gave an economic address on Tuesday, said he was 'committed to considering any and all proposals' to help homeowners but that he opposed a 'multibillion-dollar bailout for big banks and speculators'.

Former Hewlett-Packard chief executive officer Carly Fiorina, an economic adviser to Mr McCain, accused Mr Obama and Mrs Clinton of 'politics of the worst sort'.

'Both of them are rather vague on specifics but they do borrow from the principles John McCain has already laid out,' Ms Fiorina said.

Mr Obama was introduced by New York Mayor Michael Bloomberg, whose plans to have a role at the event prompted speculation he would endorse Mr Obama. But he did not. -- REUTERS