The Democratic candidates offered competing plans to lift the sagging economy Thursday, with Barack Obama calling for taxpayer relief and tougher government regulations and Hillary Clinton calling for a sweeping government-backed job training program.

Clinton, speaking at a community college in Raleigh, N.C., bashed GOP nominee-in-waiting John McCain, saying the Arizona senator is unable to handle an economic emergency.

"The phone is ringing, and he would just let it ring and ring," Clinton said, echoing the "3 a.m. phone call" TV ad she used earlier to suggest she was more qualified than Obama to handle a national security crisis. This time, she chastised McCain for opposing government intervention in the nation's credit and mortgage crisis.

In her plan, she proposes $2.5 billion per year to help workers train for new jobs and improve skills for existing jobs.

"We may be competing in a new global economy, but our policies to equip American workers for the 21st century are stuck back in the 20th century," she said.

Meanwhile, Obama said in New York City that the government must revive the economy by tightening regulations and reforming its own agencies to adjust to the realities of modern finance.

In a speech billed as a major address, the Illinois senator said most experts agree the U.S. economy is in a recession.

"To renew our economy -- and to ensure that we are not doomed to repeat a cycle of bubble and bust again and again -- we need to address not only the immediate crisis in the housing market; we also need to create a 21st century regulatory framework, and pursue a bold opportunity agenda for the American people," Obama said.

"We do American business -- and the American people -- no favors when we turn a blind eye to excessive leverage and dangerous risks," he added.

The presidential candidate spoke not far from Wall Street, hard hit by the mortgage meltdown and credit problems.

To fix the economy, Obama proposed relief for homeowners and an additional $30 billion stimulus package to address the nation's economic woes. He also called for a $1,000 tax cut for "working families." Working families received tax cuts under the 2001 and 2003 cuts proposed by President Bush and passed by Congress. Those are scheduled to expire in 2011.

"If we can extend a hand to banks on Wall Street, we can extend a hand to Americans who are struggling," he said.

New York Mayor Michael Bloomberg, the almost candidate, introduced Obama but stopped short of an endorsement.

In bemoaning the nation's economic woes, Obama too dismissed McCain's approach as too hands-off.

On Tuesday, McCain derided government intervention to save and reward banks or small borrowers who behave irresponsibly. Obama said McCain's plan "amounts to little more than watching this crisis happen."

McCain fired back even before Obama took the stage, saying he has proposed reforms to prevent systemic risks and a repeat of the credit crisis.

"However, what is not necessary is a multi-billion dollar bailout for big banks and speculators, as Senators Clinton and Obama have proposed. There is a tendency for liberals to seek big government programs that sock it to American taxpayers while failing to solve the very real problems we face," McCain said.

Obama said the next president should:

--Expand oversight to any institution that borrows from the government.

--Toughen capital requirements for complex financial instruments like mortgage securities.

--Streamline regulatory agencies to end overlap and competition among regulators.

Clinton is offering her own prescription for economic reforms. The Universal Worker Adjustment Assistance plan she pitched would help those who have lost jobs to get trained and find a new job. Her Preemptive Training Initiative would help workers who are on the verge of losing factory jobs that move overseas. The New York senator also calls for more Pell Grants to help people attend college while working.

Clinton's camp hit Obama for his plan, saying he "announced a series of broad, vague principles while offering no new concrete solutions to provide Americans with greater confidence in the market or keep them in their homes."

The political debate comes as a new government report shows the economy nearly sputtered out at the end of the year and is probably faring even worse amid continuing housing, credit and financial crises. Nonetheless, jobless numbers out Thursday showed a decline this week, though analysts said they expect more losses this year.

Obama was speaking at The Cooper Union from the podium used by presidential aspirant Abraham Lincoln in 1860 when he delivered his "Right Makes Might" address, which helped him win the Republican presidential nomination.

FOX News' Shushannah Walshe and Aaron Bruns and The Associated Press contributed to this report.