Presidential debaters jockey for position as one who can save economy

As public anxiety mounted over financial markets and the economy, Sens. John McCain and Barack Obama engaged in a muted debate last night over who was to blame and whose plan would successfully deal with the problems.

In the second presidential debate, at Belmont University in Nashville, Tenn., Obama faulted the Bush administration and by extension McCain for a deregulatory environment he said had led to the economic meltdown. McCain, pledging to help struggling homeowners, offered a proposal to direct the federal government to save families from foreclosure by buying mortgages they could no longer afford.

"As president of the United States," McCain said in response to an audience member's question, "I would order the secretary of the Treasury to immediately buy up the bad home-loan mortgages in America and renegotiate at the new value of those homes -- at the diminished value of those homes -- and let people ... be able to make those payments and stay in their homes. Is it expensive? Yes."

Obama, who has been gaining strength in recent polls, repeatedly focused on the bread-and-butter struggles of Americans, vowing to help them with a "rescue package" for the middle class, not only for banks and insurance companies on Wall Street. The first part of the package, he said, would be tax cuts for all American households making less than $250,000 a year.

"It means help for homeowners so that they can stay in their homes," Obama said. "It means that we are helping state and local governments set up road projects and bridge projects that keep people in their jobs. And then long-term we've got to fix our health-care system, we've got to fix our energy system that is putting such an enormous burden on families."

The plunging markets in the United States and overseas and a freeze in commercial and consumer credit added urgency to last night's debate, with questioners at the town-hall-style forum pressing the candidates to say how they would deal with the financial crisis.

But the candidates often seized on the questions to attack each other's records. Although Obama and McCain were civil, each watched warily, sometimes with a thin smile, sometimes with a look of exasperation, as the other spoke directly to the audience.

McCain criticized Obama's record in the Senate, saying that he had voted for billions of dollars in unneeded spending, including $3 million for a "projector for a planetarium in Chicago."

Obama said that McCain's campaign manager, Rick Davis, had accepted money for consulting for Fannie Mae and Freddie Mac, the government-sponsored mortgage companies taken over by the federal government last month to protect them from collapse.

Neither Obama nor McCain offered an optimistic view of the American economy. Obama said that the nation was reaping the bitter fruit of eight years of the Bush administration's fiscal mismanagement and drive to deregulate markets, moves he said were supported by McCain.

McCain called American workers "innocent bystanders" in the economic storm and said that one of his priorities would be to rid Washington of cronyism, greed and corruption.

"The system in Washington is broken, and I have been a consistent reformer," McCain told a questioner who wanted to know why Americans should trust either party because both were complicit in the policies that led to the current problems.

Obama said: "I understand your frustration and your cynicism. There's a lot of blame to go around."

Pressed to name the most urgent problems they would confront -- health care, entitlement spending, or energy -- Obama identified energy and health-care first, while McCain focused on entitlement spending.

Obama often tried to connect with the crowd in personal terms, and McCain often used the words "my friends" in speaking to the audience.

Obama spoke of the importance of spending $15 billion a year over 10 years to gain energy independence. But he also called for making health care more accessible, saying that the "broken health-care system is bad, not only for families, but it's making our businesses less competitive."

He questioned the wisdom of McCain's tax-cut plan, which he said would cost the nation $300 billion and would benefit large corporations, including oil companies.

Both candidates repeated some of their favorite refrains and accusations from the campaign trail. McCain once again promoted offshore drilling -- "We've got to drill offshore, my friends, and we've got to do it now," he said -- while Obama said that McCain's proposal of a $5,000 tax credit for health insurance was in effect "what one hand giveth, the other hand taketh away."

In response to a question about what each candidate would ask Americans to sacrifice, particularly in face of the economic crisis, McCain said that he would advocate a spending freeze on large parts of government.

"I'm going to ask the American people to understand that are some programs we will have to eliminate," McCain said, adding, "We will have to examine every agency and every bureaucracy of government."

Obama did not mention cuts but said that he thought Americans were eager to serve, then criticized President Bush for his response to the terror attacks of Sept. 11, 2001.

"A lot of you remember the tragedy of 9/11 and where you were on that day," Obama said. "And how all of the country was ready to come together and make enormous changes." President Bush, he said, "did some smart things at the outset, but one of the opportunities that was missed, when he spoke to the American people, he said, ‘Go out and shop.' That wasn't the kind of call that I think the American people were looking for."