Feb. 1 (Bloomberg) -- Hillary Clinton says Americans need a $40 billion tax rebate, a five-year freeze on subprime mortgage interest rates, a 90-day moratorium on foreclosures, $5 billion for jobs in renewable energy and aid to the poor who can't heat their homes.

Barack Obama continues to remind voters that the war in Iraq is crippling a nation which now needs a $75 billion stimulus plan, including a $250 tax cut for workers, an extra $250 Social Security payment for the elderly, an extension of unemployment insurance for those out of work, and $10 billion to help people facing foreclosure.

With home prices falling at the fastest pace since the Great Depression and the threat of recession becoming the dominant issue in the U.S. presidential race for the Democratic nomination, Obama, 46, and Clinton, 60, are starting to show their primary colors.

``There are significant differences,'' the New York senator told reporters in Little Rock Jan. 30. ``I'm the only one who has said, ``look, while we're trying to stabilize an economy sliding into recession, let's start creating the jobs of the future.''

Austan Goolsbee, Obama's economic adviser, said there are practical and philosophical differences between the candidates.

Clinton is offering ``a collection of relatively narrowly targeted tax credits,'' he said, while Obama ``has a pretty significant middle-class tax relief.''

`iPod Government'

The Illinois senator's preference, Goolsbee said, is for what he called ``iPod government,'' which he described as ``simple to use, easy for people, makes their life better.''

This ``spirit of simplicity is in a bunch of policies,'' he added.

In the days leading up to the Feb. 5 Super Tuesday contests, when 22 states will hold Democratic primaries or caucuses, Clinton has been quicker on the draw on the economy. She was the first to release a stimulus plan, and on Jan. 30, she issued an immediate response to Commerce Department data showing the U.S. economy weakened more than forecast in the fourth quarter.

She said the ``anemic'' 0.6 percent growth proved that the stimulus plan adopted by the House this week didn't go far enough.

``We need more than tax rebates and business incentives to fix our ailing economy,'' her statement said.

Obama, however, has gotten high marks for some of his proposals. His stimulus plan, for example, is more in line with the $150 billion deal negotiated by House Speaker Nancy Pelosi and Treasury Secretary Henry Paulson, said Douglas Elmendorf, a former Federal Reserve Board official.

House Plan

``The congressional plan is much closer to the proposal from Senator Obama because it focuses on tax rebates for individuals like Senator Obama's did and has less in the way of additional spending, as Senator Clinton's did,'' Elmendorf said.

In a Bloomberg/Los Angeles Times poll published Jan. 25, Democratic voters said the economy is tied with the war in Iraq as the top concerns for candidates to address, and almost half of those respondents said Clinton would do the best job on the economy, compared with 27 percent who picked Obama.

Throughout the week, Clinton was eager to draw distinctions between her policy prescriptions and Obama's.

``Right now it's all about the economy and health care, and I'm going to keep hitting that over and over and over again because I think it's being neglected,'' she said at North Little Rock High School on Jan. 30.

Clinton on Housing

When asked in a one-on-one debate with Obama last night what she considers to be their most important difference on economic policy, Clinton emphasized her proposals to address housing.

``I think it's imperative that we approach this mortgage crisis with the seriousness that it is presenting,'' she said at the Los Angeles forum.

At a campaign rally in Denver on the eve of the debate, Obama continued to press his message of change -- including economic change.

``In the long term, we need to put the American Dream on a firmer foundation,'' he told a crowd of about 18,000.

To be sure, there is much overlap between the candidates' proposals: They both want to extend unemployment insurance, expand heating assistance, target predatory lenders, and relieve demand on foreign oil by building more environmentally friendly energy sources.

Yet it's the contrasts, not the comparisons, that they are emphasizing.

``I think I have the most comprehensive, most realistic approach to the economy,'' Clinton said in Little Rock.

Edwards Supporters

The candidates are intensifying their focus on the economy as they vie to capture the supporters of former Senator John Edwards of North Carolina, who dropped out of the Democratic race Jan. 30 after making the gap between rich and poor the focus of his campaign.

Clinton often reminds supporters that her husband, former President Bill Clinton, presided over an economic expansion and left office with a budget surplus.

Obama, who was endorsed yesterday by former Federal Reserve Chairman Paul Volcker, said this week that both he and Clinton ``have access to the same experts.''

Clinton supporters such as Robert Rubin, who served as Treasury secretary under Bill Clinton, ``are friends of mine,'' Obama said Jan. 27, and billionaire investor Warren Buffett ``supports both of us.''

To contact the reporters on this story: Lorraine Woellert in Los Angeles at lwoellert@bloomberg.net; Heidi Przybyla in Los Angeles at hprzybyla@bloomberg.net.

Last Updated: February 1, 2008 02:42 EST