WASHINGTON (AP) _ Republican presidential candidate John McCain ramped up his attacks on Democratic opponent Barack Obama, while the McCain campaign sought to pre-empt what could be an embarrassing ethics report due out Friday on his running mate, Sarah Palin.
Lawmakers in Alaska are to release the report Friday looking into allegations that Palin abused her power as governor by firing the state's public safety commissioner. The McCain-Palin camp has already released its own report, which says public filings and an affidavit from Palin's husband clear the governor of wrongdoing.
A Palin scandal could present a new hurdle for McCain as he struggles to gain ground in the polls. McCain has intensified character attacks on Obama as the Democrat climbs in the polls as voters' preferred candidate to handle a deepening financial crisis and plunging stock market.
The U.S. economy has been the consuming voter issue for months, but anxiety has grown as home values plummet, retirement savings vanish and unemployment grows. On Thursday, the Dow Jones Industrial Average plunged to its lowest level in just over five years ” falling more than 7 percent.
McCain is seen as struggling on economic issues since the administration of fellow Republican George W. Bush first confronted the financial crisis and asked Congress to pass a $700 billion rescue plan.
This week, his campaign has sought to change the subject, deploying Palin to question Obama's character. Last weekend, she charged that Obama sees the U.S. differently than most Americans and had been "palling around with terrorists," a reference to William Ayers, a founder of the violent Vietnam-era group the Weather Underground.
In his own strongest criticism of Obama, McCain told a Wisconsin town-hall crowd on Thursday: "We need to know the full extent of the relationship" with Ayers.
Loud cheers from 4,000 people gathered at a sports complex near Milwaukee greeted McCain's attacks.
"Look, we don't care about an old, washed-up terrorist and his wife," McCain said. "That's not the point here."
"He's a terrorist!" a man in the audience screamed without making clear to whom he was referring.
McCain told supporters that Obama had not been truthful in describing his relationship with Ayers, and added that Obama himself has "a clear radical, far-left pro-abortion record."
Obama and Ayers, now a college professor, live in the same Chicago neighborhood and have served together on two nonprofit organization boards. Obama, who was a child when Ayers' group committed acts of domestic terrorism, has denounced Ayers' radical views and actions.
A new McCain TV ad also hammers Obama over his association with Ayers. The ad says: "When convenient, he worked with terrorist Bill Ayers. When discovered, he lied."
The commercial is arguably McCain's sharpest yet, and it uses Obama's link to Ayers to assert that Obama has "blind ambition" and "bad judgment." McCain's campaign says the ad will run nationally.
Obama, who would be America's first black president, said his opponent was highlighting the Ayers link to "score cheap political points."
And his campaign issued a statement that said: "It's now clear that John McCain would rather launch angry, personal attacks than talk about the economy or defend his risky bailout scheme that hands over billions in taxpayer dollars to the same irresponsible Wall Street banks and lenders that got us into this mess, a scheme that guarantees taxpayers will lose money."
Speaking at the start of a two-day bus tour through swing-state Ohio, Obama took a similar line. He declared McCain's plan for the U.S. government to buy up $300 billion worth of sour home mortgages and re-negotiate them at lower interest rates would force the government to absorb the full cost of the bad mortgages and let lenders off the hook for questionable practices.
McCain put forward the mortgage rescue idea Tuesday night during the second presidential debate.
The veteran Arizona senator, who said last year that he was not as well versed on economic issues as he would like, has offered a variety of messages since the U.S. economic crisis began. At first, he responded by saying the country's fundamentals were strong. He then said he was putting his campaign on hold and wanted to delay the first presidential debate with Obama to deal with the unfolding financial meltdown.
Obama has charged that McCain was "erratic" in his response to the crisis and voters, polls show, seem to agree. Obama has expanded his lead in the Gallup Poll daily tracking survey to 11 points, 51-41. And several polling organizations now put McCain even or behind in must-win states captured by Bush in 2000 and 2004 that are key to a Republican win.
Obama's cause also has been helped by his hefty advertising budget. On Thursday, his campaign announced that Obama has scheduled a half-hour commercial for prime time national television on Oct. 29, six days before Election Day.
Meanwhile, the Republicans were moving quickly to counter an ethics report due Friday on Palin, who was being investigated for the Alaska public safety commissioner's firing even before McCain chose her as his running mate.
The commissioner, Walter Monegan, says he was dismissed in July for resisting pressure from Palin's husband, Todd Palin, and numerous top aides to fire state police officer Mike Wooten, Palin's former brother-in-law.
Before the lawmakers released their report, the McCain-Palin camp released its own, written by campaign staff that they said relied on public filings and an affidavit Todd Palin submitted to lawmakers investigating the issue, that clears Palin.
"The following document will prove Walt Monegan's dismissal was a result of his insubordination and budgetary clashes with Gov. Palin and her administration," campaign officials wrote in the report.
Palin had no public appearances scheduled Friday.
McCain on Friday was holding a rally in Wisconsin, and Obama was continuing his stops in key swing state Ohio. Obama's running mate, Joe Biden, was campaigning in Missouri.