McCain, Obama spar over economy in debate

NASHVILLE -- John McCain and Barack Obama exchanged blame and offered proposals to address the nation's financial crisis during Tuesday's presidential debate, with McCain promising aid to struggling homeowners and Obama saying the government must assure the massive federal financial rescue package works as planned.

The town hall-style debate focused immediately on the economy and stayed on it for much of the night, with McCain calling for the Treasury Department to buy up troubled mortgages — with some conditions — and renegotiate them with homeowners at the current value of homes. His campaign estimated the cost of the program at $300 billion.

"Is it expensive? Yes, but we all know, my friends, until we stabilize home values in America, we're never going to start turning around and creating jobs and fixing our economy, and we've got to get some trust and confidence back to America," McCain said.

"It is my proposal. It's not Sen. Obama's proposal. It's not President Bush's proposal," he addedd.

Obama called the current downturn "the worst financial crisis since the Great Depression" and said the government must assure that the financial rescue package signed into law last week worked as planned.

"I believe this is a final verdict on the failed economic policies of the last eight years, strongly promoted by President Bush and supported by Senator McCain," he said.

The debate began hours after the Dow Jones industrial average tumbled another 508 points, and the resulting financial anxiety is looming large over tonight's session.

The two clashed repeatedly over taxes and spending, with McCain saying that "nailing down Sen. Obama's various tax proposals is like nailing Jell-O to a wall."

"I'm going to ask the American people to understand that there are some programs that we'll going to have to eliminate," McCain said, but he limited that proposal to "programs that aren't working."

Obama said the nation's debt problems start "with Washington. I think we've got to show that we've got good habits, because if we run up trillion-dollar debts that get passed on to the next generation, then a lot of people are going to think there's easy money out there."