With the financial system still reeling from a major credit crisis, Democratic presidential candidate Barack Obama unveiled a four-part economic rescue plan Monday, announcing a series of measures aimed at helping middle-class Americans.

The proposal — which was laid out in a campaign speech in the battleground state of Ohio Monday afternoon — includes tax credits to encourage job creation; loosens rules on retirement savings withdrawals; imposes a 90-day foreclosure moratorium for certain homeowners; and expands federal lending to state and local governments.

The ideas would build on Obama’s existing economic plan, which is estimated to cost approximately $115 billion, according to Obama’s top economic adviser Jason Furman. The new elements would cost another $60 billion, bringing the total estimated cost of the proposal to $175 billion over two years.

“The biggest priority next year is to avoid a very deep recession which would sway our budget deficit enormously,” Furman said in a conference call with reporters ahead of the speech.
Furman also stressed that the proposals were designed to be implemented quickly either via the government’s existing authority or through emergency congressional legislation.

Under the Obama proposal, companies that add jobs in the United States would be eligible for a $3,000 refundable tax credit for each additional full-time employee hired in 2009 and 2010. Obama is also calling for new legislation to allow families to withdraw up to $10,000 penalty-free from their IRA and 401(k) retirement plans in 2008 or 2009.

Additionally, the Illinois senator would require financial institutions in the process of modifying the terms of mortgages for certain homeowners to stick to a 90-day foreclosure moratorium for any families “making good faith efforts” pay their mortgages, Furman said.

Obama is also pushing for federal support of non-financial institutions, including small businesses, states and municipalities — which would make it easier to borrow money in the short term.

Republican presidential nominee Sen. John McCain also focused on the economic downturn in his remarks at a Virginia campaign rally earlier Monday, but did not offer any new proposals.

Instead he criticized Obama’s earlier promises of new investments by the government, a move the Arizona senator said would cost the taxpayers hundreds of millions of dollars more.

“If I’m elected president, I won’t spend nearly a trillion dollars more of your money, on top of the $700 billion we just gave the Treasury Secretary, as Senator Obama proposes,” McCain told supporters at the Virginia Beach rally. “He can’t do that without raising your taxes or digging us further into debt. I’m going to make government live on a budget just like you do.”

McCain continues to draw criticism over his proposal last week to have the federal government to purchase troubled mortgage loans. In last week’s presidential debate, McCain proposed a $300 billion federal program to purchase problematic mortgages and implement affordable terms with homeowners that might default on their loans.

On Friday, McCain called for suspending a requirement that forces retirees to withdraw their retirement savings accounts after the age of 70 and a half, a move that Obama said he would also endorse during Monday’s speech.