Oct. 8, 2008 — -- Hoping to reverse the momentum that has allowed Barack Obama to open a lead in the polls just a month before the election, John McCain began the second presidential debate Tuesday night by offering a new proposal aimed at helping struggling homeowners avoid foreclosure.
The Arizona senator said he would cut taxes for all Americans and proposed a new policy in which the Treasury secretary would "buy up bad home loan mortgages."
The proposal would cost about $300 billion, which the campaign says would come out of the $700 billion financial bailout package passed by Congress last week, according to a fact sheet distributed by the McCain campaign.
"Let people be able to make those payments and stay in those homes," McCain said. "Is it expensive? Yes. But until we stabilize, we're never going to be able to turn around and fix jobs. We got to bring trust and confidence to America, and I know how to do that."
Though the candidates sparred on a wide range of issues including foreign policy and health care, the first question handled by the candidates echoed the seminal question in the minds of American voters, from Joe Six-Packs to soccer moms -- what does the economic crisis mean to average Americans?
Both made a point to portray himself as a reformer who believes strong leadership and government involvement is necessary to fix the economy.
"Americans are angry, they're upset and they're a little fearful," McCain said of the economy.
Calling the global downturn the "worst financial crisis since the Great Depression," Obama blamed President Bush and, by association, McCain, whom he said supported the failed policies of the Bush administration.
"I believe this is a final verdict on the failed economic policies of the last eight years, strongly promoted by Bush and supported by McCain," he said.
The candidates met Tuesday night at Belmont University in Nashville, Tenn., for their second of three debates, with the pressure on McCain, who is trailing in the polls, to persuade people to reconsider how many of them are planning to vote.
In the days leading up to the debate, McCain had said he wanted to shift the national dialogue away from the ongoing economic crisis and onto the Illinois senator's character.
The two were expected to hammer out clear differences, and the second meeting between the candidates was seen as a chance for McCain to reverse a recent slide in the polls, leaving him trailing in key battleground states.
Both men took the opportunity to make small digs at each other, but the debate featured none of the personal, ad hominem negative attacks that pundits had predicted.
At one point McCain referred to Obama as "that one," saying the "energy bill loaded down with goodies and sponsored by Bush and Cheney. Who voted for it? You would've never guessed -- that one. Who voted against it? Me."
He also questioned Obama's tax policy, saying, "Nailing down Sen. Obama's various tax proposals is like nailing Jell-O to the wall. The last president to raise taxes during tough economic times was Hoover."
To which Obama parried: "I think the 'Straight Talk Express' lost a wheel on that one."
The town hall-style debatewas moderated by Tom Brokaw of NBC News, who asked just a handful of the hundreds of thousands of questions submitted over the Internet.
Another dozen or so questions were asked by a group of 80 undecided voters from the Nashville area selected by the Gallup Poll.
McCain favors the town hall format and had previously challenged Obama to other town hall debates, a fact that led to the evening's first zinger.
"It's good to be with you at a town hall meeting," McCain said to Obama, who refused McCain's invitation to meet for weekly town-hall debates.
But the town hall style never fully took off, with the candidates rarely engaging the audience or each other and Brokaw chiding the candidates for not sticking to the time limits.
Asked whom they would nominate as Treasury secretary in their respective administrations, McCain suggested former eBay CEO Meg Whitman, while Obama suggested Berkshire Hathaway CEO Warren Buffett.
Both took the opportunity to blame each other for playing a role in causing the economic crisis.
McCain accused Obama of receiving donations from individuals at Fannie Mae and Freddie Mac, the mortgage giants whose failures signaled the oncoming financial crisis.
"The real catalyst was Fannie and Freddie. They're the ones who were the encouragement of Sen. Obama and his cronies that went out and made all these risky loans, gave them to all these people who couldn't pay back. There were some of us who stood up and said we needed to enact legislation," McCain said.
"There were some of us who stood up against this," he said. "There were others who took a hike."
Obama has received $126,349 -- $120,349 from employees and $6,000 from Political Action Committees or PACs -- since he joined the Senate in 2005, according to the Center for Responsive Politics. His total is the second largest of any member of Congress, right behind Sen. Chris Dodd, D-Conn., at $165,400.
McCain has received $21,550 from employees (nothing from PACs) since 1989 -- a period 14 years longer than Obama has been in the Senate -- according to the Center for Responsive Politics.
Obama said he was the real reformer of the two, who had called Treasury Secretary Henry Paulson and Federal Reserve System chairman Ben Bernanke to take action while McCain was waiting for the free market to correct itself.
"I've got to correct McCain's history, not surprisingly. Deregulation of the financial system. McCain, as recently as March, bragged about the fact that he's a deregulator. Two years ago I said there was a subprime crisis we had to deal with. I wrote to Paulson and Bernanke and told them it's something we need to deal with. I never promoted Fannie Mae."
Then Obama switched tacks, speaking directly to Oliver Clark, the audience member who had asked a question about the bailout, saying, "You're not interested in politicians pointing fingers. You're interested in the impact on you. This is not the end, this is the beginning of the process."
Asked whether that meant he thought the economy was poised to get much worse, Obama said, "I am confident about the American economy, but we are going to have to have to leadership from Washington."