McCain, Clintons
focus on New Hampshire

Republican John McCain, his campaign reeling from staff departures and money woes, accused Democratic presidential candidates of advocating a perilous Iraq policy and singled out Hillary Rodham Clinton as she and her husband courted voters elsewhere in New Hampshire.

''Defeatism will not buy peace in our time. It will only lead to more bloodshed and to more American casualties in the future,'' said the Arizona senator in his first campaign appearance since a major staff shake-up earlier in the week.

At a campaign rally some 50 miles away in Keene, N.H., Clinton ignored McCain's jabs and joined other Democratic hopefuls in supporting the end of a tax break for some wealthy Wall Street financiers that she argued creates ''a glaring inequity.''

Former President Clinton joined his wife as he did last week in Iowa. The former first lady and current New York senator told the Associated Press in a brief interview: ''I'm proud to have his support...but at the end of the day, I have to stand on my own, just as he did when he started running here in '92.''

As McCain and Clinton focused on the first primary state, New Hampshire, Democrat John Edwards discussed creating new job opportunities in the growing energy industry during a trip to Iowa, while Barack Obama campaigned in Nevada. Neither of the top two Republican candidates -- Rudy Giuliani and Mitt Romney -- campaigned Friday but the two released their voluminous, second-quarter financial reports in advance of Sunday's midnight deadline.

Giuliani's fundraising in New York and Florida boosted his $15 million primary haul, according to his report.

As debate over Iraq raged in Washington, McCain returned to New Hampshire after a recent trip to Baghdad to renew his staunch defense of President Bush's war policy. His 19-year-old son, Jimmy, a Marine likely to head to Iraq soon, accompanied his father but went largely unnoticed in the audience. McCain, who is intensely private about his children, did not acknowledge his presence.

Mentioning Clinton by name, McCain suggested the Democratic front-runner was ignoring the consequences of failure in Iraq and the threat of al-Qaida there and elsewhere. In general, he said: ''Democratic candidates for president will argue for the course of cutting our losses and withdrawing from the threat in the vain hope it will not follow us here. I cannot join them in such wishful and very dangerous thinking.''

His remarks were overshadowed by questions about the upheaval in his campaign; it has undergone two major staff shake-ups in a week and is nearly broke. More departures are expected in the coming days. McCain said he took responsibility for the struggles, stating, ''It's my campaign.... You take responsibility when you're in charge.''

McCain's campaign raised $25 million in the first half of the year but has spent nearly all of it. By Sunday, the campaign will report that it has $2 million cash on hand but more than $1 million in outstanding debt, according to officials. They say McCain could end up having as little as a couple hundred thousand dollars available as he tries to revitalize his campaign.

Nevertheless, McCain said he was confident the campaign would rebound and offered a prescription: ''We go to the town hall meetings. We fix our financial difficulties and we win.''

While he talked campaign mechanics and foreign policy, Clinton discussed a domestic issue--taxes. Like Obama and Edwards, Clinton called for ending a tax loophole that allows investment managers in certain Wall Street partnerships to pay lower income tax rates than average people by taking large sums of money as ''carried interest.'' That's subject to a 15% capital gains rate rather than regular income tax rates that can reach 35%.

Legislation pending in the Democratic-controlled House would require that the ''carried interest'' rate be 35% as well.

''It offends our values as a nation when an investment manager making $50 million can pay a lower tax rate on her earned income than a teacher making $50,000 pays on her income,'' Clinton said.

Halfway across the country in Humbolt, Iowa, Edwards chose a fitting setting to announce a plan to help train 150,000 workers a year in what he called ''green collar'' jobs and create 50,000 government-subsidized jobs to help hard-to-hire workers learn new skills related to the growing energy industry. Iowa has been a leader in producing corn-based ethanol, other biofuels, and wind-generated energy.

The former North Carolina senator argued that the country needed skilled workers in the research and development of renewable energy, energy efficiency, and carbon emissions control. He said selling $10 billion in greenhouse pollution permits and ending $3 billion in oil company subsidies would pay for the initiatives.

''We can turn the crisis of climate change into an opportunity for a new energy economy,'' he said. (Liz Sidoti, AP)