Heated debate focuses on economic crisis

NASHVILLE, Tenn. – Sens.  Barack Obama and John McCain clashed repeatedly over the causes and cures for the worst economic crisis in 80 years Tuesday night in a debate in which McCain called for a sweeping $300 billion program to shield homeowners from mortgage foreclosure.

“It’s my proposal. It’s not Senator Obama’s proposal,” McCain said at the outset of a debate he hoped could revive his fortunes in a presidential race trending toward his rival.

In one pointed confrontation on foreign policy, Obama bluntly challenged McCain’s steadiness.

“This is a guy who sang ‘bomb, bomb, bomb Iran,’ who called for the annihilation of North Korea – that I don’t think is an example of speaking softly,” he said.

The debate was the second of three between the two major-party rivals and the only one to feature a format in which voters seated a few feet away posed questions to the candidates.

They debated on a stage at Belmont University four weeks before Election Day in a race that has lately favored Obama, both in national polls and in surveys in pivotal battleground states.

Many of the questions dealt with an economy in trouble.

Obama said the current crisis was the “final verdict on the failed economic policies of the last eight years” that President Bush pursued and were “supported by Senator McCain.”

He contended that Bush, McCain and others had favored deregulation of the financial industry, predicting that policy would “let markets run wild and prosperity would rain down on all of us. It didn’t happen.”

McCain’s pledge to have the government help individual homeowners avoid foreclosure went considerably beyond the $700 billion bailout that recently cleared Congress.

“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,” he said.

McCain also said it was important to reform the giant benefit programs such as Medicare, Medicaid and Social Security but did not elaborate.

The two men also competed to demonstrate their qualifications as reformers at a time voters are clamoring for change.

McCain accused Obama of being the Senate’s second-highest recipient of donations from individuals at Fannie Mae and Freddie Mac, the two now-disgraced mortgage industry giants.

“There were some of us who stood up against this,” McCain said of the lead-up to the financial crisis. “There were others who took a hike.”

Obama shot back that McCain’s campaign manager, Rick Davis, has a stake in a Washington lobbying firm that received thousands of dollars a month from Freddie Mac until recently.

But that spat didn’t stop the two men from criticizing one another repeatedly as the topics turned to energy, spending, taxes and health care.

The two prefer dramatically different approaches to easing the problem of millions of uninsured Americans. McCain favors a $5,000 tax credit, but Obama wants to build on the current system to help uninsured families obtain coverage.

Obama said McCain was going to require taxes on the health benefits workers receive from their employers at the same time his plan would wipe out the ability of states to enforce their own regulations to require tests such as mammograms.

McCain countered his rival, saying Obama’s plan would fine parents who fail to obtain coverage for their children but the Democratic candidate had yet to say what the fine would be.

Obama then said McCain “voted against the expansion” of the government-run children’s health care program.

The debate also veered into foreign policy, and the disputes were as intense as on the economy and domestic matters.

McCain said his rival “was wrong” about Iraq and the surge and Russia’s actions against Georgia.

“And in his short career, he does not understand our national security challenges,” he said. “We don’t have time for on-the-job training.”

Obama countered with a trace of sarcasm that he didn’t understand some things – like how the United States could face the challenge in Afghanistan after spending years and hundreds of billions of dollars in Iraq.

The audience was selected by Gallup, the polling organization, and was split three ways among voters leaning toward McCain, those leaning toward Obama and those undecided.

Tom Brokaw of NBC, the moderator, screened questions and also chose others that had been submitted online.