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From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

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And I'm Melissa Block.

Oil prices hit new highs today as Senator John McCain called for a summer vacation from federal gas taxes. The Republican presidential candidate spoke in Pittsburgh today. He said temporarily lifting that 18-cents-a-gallon tax would give Americans a break during the summer driving season.

As NPR's Scott Horsley reports, this idea is part of McCain's recent approach to economic policy. He's been trying to strike a balance, sticking with his belief in the limited role of the federal government while trying to show concern for Americans facing tough economic times.

SCOTT HORSLEY: John McCain gave an economic speech in Pittsburgh today against a backdrop of more grim economic news - the second sharpest jump in wholesale prices in three decades and a surge in mortgage defaults last month that put nearly a quarter million families at risk of losing their homes. McCain says Americans are also in danger of losing another vital resource - confidence.

Senator JOHN McCAIN (Republican, Arizona; Presidential Candidate): I leave it for others to speculate on the technical definition of a recession. It's all a little beside the point if its your plant that's closing and your job that's gone and when you are facing foreclosure or back in debt after years of hard effort or hardly able to buy food, gas or heating for your home.

HORSLEY: McCain is trying to show he understands those concerns after conceding the economy is not his strongest suit. He suggested a number of ways the government could provide short-term relief beginning at the gas pump.

Sen. McCAIN: I propose that the federal government suspend all taxes on gasoline now paid by the American people from Memorial Day to Labor Day of this year.

(Soundbite of applause)

HORSLEY: The gas tax holiday would cost the government about $10 billion in lost revenue. McCain also called for expanded aid to college students who may have trouble getting student loans this fall from increasingly cautious lenders. And he repeated the proposal he made last week to help struggling homeowners refinance. McCain makes that process sound simple. Homeowners could just pick up a form at their post office and swap their costly, adjustable mortgage for a fixed-rate loan guaranteed by the government.

After listening to the speech, college student Enova Obiasu(ph) wondered if it wasn't too good to be true.

Mr. ENOVA OBIASU (College Student): It's very ambitious and it sounds very nice. I don't know how he's going to go about implementing that change.

HORSLEY: McCain didn't mention that lenders would have to forgive a portion of the loans. On this tax deadline date, McCain also called for an overhaul of the federal tax code. He suggests cutting the corporate tax rate, doubling the exemption for dependent children, and offering taxpayers a streamlined alternative tax system with a bigger standard deduction.

Sen. McCAIN: Americans don't resent paying their rightful share of taxes, what they do resent is being subjected to thousands of pages of needless and often irrational rules and demands from the IRS.

(Soundbite of applause)

HORSLEY: McCain would offset some of his tax cuts by reducing federal spending. He proposed a one year freeze in the government's discretionary spending and repeated his promise to fight lawmakers' pet-spending projects.

Sen. McCAIN: I will veto every bill with earmarks until the Congress stops sending bills with earmarks on them. I will keep vetoing…

(Soundbite of applause)

HORSLEY: McCain gave only a nod to health care and energy policy today, although he's promise to make both a part of what he calls his pro-growth agenda. And he reiterated his support for free trade one day after his Democratic rivals addressed a manufacturing forum here in Pittsburgh and called for tougher trade policy towards China.

Sen. McCAIN: We can compete with anyone. Senators Obama and Clinton think we should hide behind walls, bury our heads and industries in the sand, and hope we have enough left to live on while the world passes us by.

HORSLEY: Many voters, including Republicans, have grown wary of unfettered trade.

Pat Hassey runs a specialized metals company here in Pittsburgh. Even though he does much of his business overseas, he says the U.S. can no longer afford what he calls a one-sided trade policy.

Mr. PAT HASSEY (CEO, Allegheny Technologies): We have to look at jobs in this country and we have to protect good manufacturing jobs that are the basis of middle-class America, that are the basis of what this country is built on.

HORSLEY: McCain acknowledged today that economic changes brought on by globalization can be wrenching. He says the government should help by retraining displaced workers.

Economist Chris Briem, of the University of Pittsburgh, says that's easier said than done.

Mr. CHRIS BRIEM (Economist, Center for Social and Urban Research, University of Pittsburgh): We kind of invented worker retraining here in Pittsburgh. We saw so many jobs went away. And guess what? It's not that easy to take, say, a 50-plus-year-old steelworker and make them into sort of, you know, a database administrator. It's not going to happen.

HORSLEY: McCain, who's been getting his own retraining in economics, said today it can't be separated from the rest of life. Economics is about our deepest hopes, he said. And that's especially true the election year when the economy is uppermost in voter's minds.

Scott Horsley, NPR News, Pittsburgh.

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