McCain hopes to highlight economic strengths

While both candidates have a laundry list of proposals to spur the economy, the biggest differences in their platforms center on tax policy.

McCain wants to make permanent the Bush administration tax cuts that are due to expire at the end of 2010 and cut corporate taxes.

Obama wants to expand child tax credits and increase top tax rates. He would also expand tax credits to low-income workers and eliminate taxes on seniors making less than $50,000 per year. Obama wants to raise payroll taxes for those earning more than $250,000 a year.

On health care reform, McCain’s plan is more modest; he wants to turn employer-paid health insurance benefits into taxable income and then enact a health care tax credit up to $5,000 for families.

Obama wants to target tax subsidies to low-income people, expand Medicaid to cover all adults up to the poverty line and all children in families with income up to three times the poverty level. Obama’s plan would also charge employers a 6 percent payroll tax penalty if they don't provide health insurance for employees. Obama’s critics say his health care proposals would be more costly than he has estimated.

“He has massive tax increases with figures that show his health plan (will cost) zero,” said Republican strategist Jack Burkman. “Can you imagine how big the tax increases will have to be when he's finally honest about how much his health plan will cost?"

Special feature Compare candidates McCain and Obama on economic issues

Both candidates are vowing to pay for any proposed new programs by closing tax loopholes, though they differ on which ones. But both fail the math test in balancing the budget, according to the Tax Policy Center.

Including interest costs, the tax research group says Obama’s tax plan would boost the national debt by $3.5 trillion by 2018; McCain’s plan would increase the debt by $5 trillion. Obama’s tax plan would cut taxes by $2.9 trillion from 2009-2018, while McCain would cut taxes by nearly $4.2 trillion, according to the center.

On energy issues, both candidates support increased spending on research and development of alternative energy sources. They also both support measures to limit greenhouse gases, and they support limited drilling offshore to help ease tight supplies of crude oil.

Both have opposed drilling for more oil in the Alaska's Arctic National Wildlife Refuge, although McCain’s selection of Alaska Gov. Sarah Palin for his running mate may signal a shift in that position. Palin told CNBC shortly before she was chosen that “we need to drill, drill, drill."

"Otherwise, I cannot believe that a domestic solution is any part of a national energy policy if they're not going to let Alaskans drill on our own lands and on federal lands within our own state,” Palin said. “And if a domestic solution isn't part of the national energy plan, then our nation is in a world of hurt."

That message is polling well with voters, especially in states where higher energy prices are hitting hardest: cold-weather states facing high heating bills this winter and sparsely populated states where drivers log the most mileage.

“On the other hand, a lot of the battleground states aren't those states," said Kevin Book, an energy analyst at FBR Capital Markets. "Some of those states are actually doing a little bit better on disposable income, driving less, more temperate climate. So that may not be the message that pulls it across for Republicans."

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