Obama says Iraq war drag on economy

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CHARLESTON, West Virginia (Reuters) - Democratic presidential candidate Barack Obama on Thursday said the $500 billion cost of the Iraq war is a drag on the U.S. economy and attempted to lay some of the blame for it on Republican rival John McCain.

By Matthew Bigg

CHARLESTON, West Virginia (Reuters) - Democratic presidential candidate Barack Obama on Thursday said the $500 billion cost of the Iraq war is a drag on the U.S. economy and attempted to lay some of the blame for it on Republican rival John McCain.

"How much longer are we going to ask our families and our communities to bear the cost of this war?" the Illinois senator asked in a speech.

As Obama tried to translate public opposition to the war into support for his candidacy, a Gallup poll said his Democratic opponent, New York Sen. Hillary Clinton, has moved into a significant lead over him among Democratic voters.

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The March 14-18 national survey of 1,209 Democratic and Democratic-leaning voters gave Clinton a 49 percent national edge to his 42 percent in the contest to select the Democratic nominee to face McCain in the November election.

Arizona Sen. McCain leads both the Democrats in a hypothetical matchup of the general election, according to the Gallup poll and a Reuters/Zogby poll released on Wednesday.

Obama used a large portion of his speech to try to connect McCain to President George W. Bush, accusing McCain of wanting a "permanent occupation in Iraq" while supporting Bush's attempt to make tax cuts permanent.

"No matter what the costs, no matter what the consequences, John McCain seems determined to carry out a third Bush term," Obama said.

McCain communications director Jill Hazelbaker swiftly rejected Obama's statements which she said showed he was wrong on both the economy and U.S. national security. Obama was offering "the tired tax and spend ideas of the past" while promoting a speedy U.S. troop pull-out from Iraq, she said.

"He has embraced an irresponsible policy of withdrawing our troops from Iraq without regard for the conditions on the ground, the advice of our military commanders or the consequences of failure, which his own top advisor called unrealistic," Hazelbaker said.

ROCKY WEEKS

Obama, who would be America's first black president, is trying to rebound after a rocky couple of weeks.

A foreign policy adviser, Samantha Power, had to resign after she called Clinton a "monster" and this week Obama was forced to distance himself from his long-time Chicago pastor, the Rev. Jeremiah Wright.

Wright, who retired recently, had railed from the pulpit that the September 11 attacks were retribution for U.S. foreign policy, called the government the source of the AIDS virus and expressed anger over what he called racist America.

The controversy reverberated further when the 1984 Democratic vice presidential nominee, Geraldine Ferraro, attacked Obama for mentioning her in the same vein as Wright during a speech about race in America he gave on Tuesday.

Ferraro had to give up an advisory role to Clinton's campaign last week after she said Obama would not be in a strong position in the campaign if he were not black.

"To equate what I said with what this racist bigot has said from the pulpit is unbelievable," Ferraro said. "He (Obama) gave a very good speech on race relations, but he did not address the fact that this man is up there spewing hatred."

McCain, on a Middle East and European trip this week, shrugged off criticism from Obama over a gaffe he had made about Iraqi militants while in Jordan earlier in the week. He said on Thursday that all politicians slip up and it was time to "move on."

Obama had attacked McCain on Wednesday for misidentifying Iraqi Shi'ite and Sunni militants before Connecticut Independent Sen. Joe Lieberman corrected him.

"We all misspeak from time to time and I immediately corrected it," McCain said after talks with British Prime Minister Gordon Brown at No. 10 Downing Street.

Obama said the cost of the war so far has been $500 billion and noted some estimates put it ultimately at $3 trillion. He outlined a number of domestic priorities that could be funded with this money, such as improving the health care system and rebuilding roads and bridges.

Obama said he would "spare no expense" to make sure U.S. troops have the equipment they need, but the Republican National Committee pointed to instances which it said showed Obama had voted in the Senate against funding the troops.

(Additional reporting by Jeff Mason with Clinton, Adrian Croft in London and David Morgan in Washington; Writing by Steve Holland, editing by Vicki Allen)

(To read more about the U.S. political campaign, visit Reuters "Tales from the Trail: 2008" online at http://blogs.reuters.com/trail08/)