WASHINGTON -- Barack Obama ratcheted up his rhetoric against Republican rival John McCain Monday, labeling him as a corporate-friendly budget buster in a sheep's clothing, and began laying out specifics he said would begin righting the ailing economy.

Struggling, sputtering and wheezing, the U.S. economy is ripe pickings for political warfare. The stock market plunged nearly 400 points on Friday. Gas hit a national average of $4 a gallon. And the labor market has shed more jobs.

But McCain is not sitting by idly. McCain is painting Obama as a liberal who will break American families already hurting from the economic downturn with series of nickel-and-dime taxes that, as one McCain aide puts it, is "change we can't afford."

In Raleigh, N.C., Obama did his best to link McCain with President Bush, who has taken criticism from within his own party for expanding the federal deficit after running on a fiscal conservative platform. Democrats have not been so kind.

"When it comes to the the economy, John McCain and I have a fundamentally different vision of where to take the country. Because for all his talk about independence, the centerpiece of John McCain's economic plan amounts to a full-throated endorsement of George Bush's policies," Obama said.

Obama said that by ending the Iraq war, the country could use the $12 billion estimated spent there a month on roads, schools and bridges here in the United States. He also repeated his call for $50 billion more to be spent to assist whom he called "those who have been hit hardest by this economic down turn: Americans who have lost their jobs, their homes, are facing rising costs."

Obama also drew applause for his call to institute a windfall tax on oil companies, which he said would be diverted "to help families pay for their skyrocketing energy costs and other bills."

Obama's call for a windfall tax came after he leveled a charge against McCain that part of the corporate tax breaks McCain supports include $1.2 billion for Exxon Mobil, a company under constant congressional scrutiny while it makes record oil profits.

"This isn't just irresponsible. It's outrageous," Obama said of the Exxon tax break.

At a fundraiser in Richmond, Va., McCain noted that he supports a temporary suspension of the federal tax on gasoline, which Obama dismisses as a gimmick that will not bring down prices.

"Talk to somebody who owns a couple of trucks and makes a living with those trucks," McCain said. "Ask them whether they'd like to have some relief -- 18 1/2 cents per gallon for gasoline and 24 1/2 cents for diesel. They say it matters."

The two differed somewhat on energy production as well. Obama called for greater government investments "in a renewable energy policy that ends our addiction on foreign oil, provides real long-term relief from high fuel costs, and builds a green economy that could create up to five million well-paying jobs that can't be outsourced."

He did not mention nuclear power, although in the past he has said he would not rule out a greater role for nuclear energy.

McCain was more gung-ho about nuclear power and expanded domestic drilling for oil and natural gas. When a donor in Richmond summed up his advice as, "nuclear, and drill wherever we've got it," McCain responded: "You just gave my speech. Thank you, my friend."

Obama is launching a two-week tour of battleground states where he aims to break away from McCain, who Obama says will only continue President Bush's "failed" economic policies. Obama is critical of Bush's tax cuts, and says he will roll some back on the richest Americans while giving some relief to middle class Americans, a group Obama needs to shore up before November.

Obama also will try to capitalize on earlier statements by McCain that it is not among the Arizona senator's strong points.

McCain's campaign issued a statement Monday morning ahead of Obama's speech, hoping to find an audience of conservative, tax-averse Republicans, and blue-collar Democrats loyal to Hillary Clinton, who ended her campaign Saturday.

"While hardworking families are hurting and employers are vulnerable, Barack Obama has promised higher income taxes, Social Security taxes, capital gains taxes, dividend taxes, and tax hikes on job creating businesses," McCain spokesman Tucker Bounds said, claiming Obama had voted 94 times for higher taxes.

"Barack Obama doesn't understand the American economy and that's change we just can't afford," Bounds said. Following suit, the Republican National Committee is launching a Web site Monday titled, "The Change We Can't Afford," a play on Obama's campaign slogan, "Change We Can Believe In."

Obama countered saying that he supports pay-as-you-go-style government, which means reducing spending to afford a tax cut, or raising money to pay for new programs.

McCain was set to make fundraising stops in Virginia and Washington, and not a moment too soon. Obama has raked in $264 million in 16 months. McCain has raised less than half that much, $115 million, in 17 months.Obama will travel to North Carolina -- a state that has not voted for a Democratic presidential candidate since 1976 -- to talk economics to an electorate increasingly edgy about its future.

The Illinois senator plans to push into other Republican bastions with his economic message, hoping to reverse history in places like Missouri, which hasn't voted for a Democrat since 1996 and Virginia, which last voted Democratic in 1964.

By moving into such historically Republican states, Obama could force the McCain camp to spend precious resources defending traditionally home turf.

For his part, Obama faces the huge challenge of wooing the Clinton base, as the Democrats try to patch things up after what was an extended, exhausting and often bitter campaign. Time grows short for Obama on that front with the party convention set for late August in Denver.

Through the primary season polls showed Clinton backers -- especially women and working class voters -- increasingly declaring they would vote for McCain rather than Obama.

While Obama feels comfortable with an offensive against McCain on the economy, which has badly faltered in the last months of the Republican Bush administration, the Arizona senator hopes to counter-punch with attacks on his opponent's perceived lack of experience in the international arena.

But McCain is saddled with the Iraq war, which he supported at it's inception and believes must continue to a still undefined U.S. victory. And even if he can gain renewed traction with his Iraq policy, a war opposed by a majority of Americans, the issue has fallen off front pages as voters turn inward, concerned about their faltering economic prospects.

The national average price of regular grade gasoline crept up to $4 a gallon for the first time over the weekend, passing the once-unthinkable milestone just in time for the peak summer travel season.

Prices at the pump were expected to keep climbing, especially after last week's furious surge in oil prices, which neared $140 a barrel in a record-shattering rally Friday.

Truck drivers and others with diesel engines have it even worse. A gallon of diesel now sells for $4.762.

Skyrocketing oil prices are largely to blame for the surge. Soaring demand in Asia and elsewhere ensures global supplies remain tight even as Americans cut back; recent figures from the U.S. Energy Department's Energy Information Administration showed U.S. gasoline demand actually fell 1.4 percent over the last four weeks.

Adding to McCain's troubles-by-association with President George W. Bush, the nation's unemployment rate shot up to 5.5 percent in May, the biggest one-month jump in decades. So far this year, 324,000 people have lost their jobs.

The release of those figures on Friday sent the stock market skidding, with the Dow Jones Industrial Average dropping nearly 400 points. As oil prices hit new highs, home mortgage foreclosures continued to send shock waves through the already wobbly economic system.

The Associated Press contributed to this report.