McCain, Obama Clash Over Economic Crisis

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Questions about the economy and the global financial crisis dominated much of the early going in the second presidential debate between Sens. John McCain and Barack Obama.

The candidates grappled with the mortgage crisis, taxes, spending, health care and entitlement programs before moving to skirmish more briefly on foreign policy and security issues.

Although the matchup followed several days of escalating negative attacks from both campaigns, it was relatively civil, with the blows focused mostly on policies.

Pocketbook Concerns

Under the debate's town-hall-style format, the presidential candidates faced questions directly from the audience at Belmont University in Nashville, Tenn., as well as queries submitted on the Internet. The very first question went straight to voters' anxieties about the financial crisis: What would the candidates do to protect retired and older citizens who are losing their incomes?

Obama opened with a swing at "the failed economic policies of the last eight years" — policies that he has tried to link to McCain. While he called the $700 billion financial rescue package passed last week a first step, Obama said his plan would extend assistance to the middle class, including tax cuts and measures to keep homeowners in their homes.

McCain said his plan would include promoting energy independence so the U.S. could "stop sending $700 billion a year to countries that don't like us" — a reference to U.S. purchases of oil from hostile countries. He also announced a new plan to assist homeowners, saying he would order the secretary of the Treasury "to immediately buy up the bad home loan mortgages in America" and renegotiate the payments based on the diminished value of the homes.

The proposal goes beyond the bailout package approved by Congress last week. Obama has said in the past that the idea should be studied, and his campaign has said that McCain's proposal was not new.

Economic Blame Game

Each candidate tried to tie the other to the causes of the financial crisis, with McCain accusing Obama "and his cronies and his friends in Washington" of encouraging Fannie Mae and Freddie Mac to make "all these risky loans."

Obama countered that he had not promoted the mortgage giants, but that McCain's campaign chairman's firm had lobbied on behalf of Fannie Mae. He accused McCain of promoting deregulation of the financial industry, letting the markets "run wild" with the claim that "prosperity would rain down on all of us. It didn't happen."

A key question at Tuesday night's presidential debate addressed voters' loss of trust in the major political parties. Audience member Teresa Finch asked, "How can we trust either of you with our money when both parties got us into this global economic crisis?"

Obama responded that there was more than enough blame to go around, before pointing the finger squarely at the Bush administration's policies. Still, the Illinois Democrat said he would increase spending on some priorities, such as energy independence and college affordability, while achieving "a net spending cut."

McCain repeated his mantra that he has been a consistent reformer who has taken on special interests, calling on voters to "look at our records as well as our rhetoric." The Arizona Republican charged that Obama's plan calls for $860 billion in new spending.

On Health Care, Social Security And Medicare

Moderator Tom Brokaw sharpened one audience member's question on entitlement reform by asking whether the candidates would set a hard deadline — say, within two years — for Congress to reform Social Security and Medicare. Obama said he would seek reform within his first term as president but said entitlement reforms couldn't be addressed without addressing tax policy.

McCain responded that "it's not that hard to fix Social Security." He said the crisis could be solved with bipartisan action, but he didn't offer specifics. He said fixing Medicare would be tougher, and he called for a commission of "the smartest people in America" to come up with a plan that Congress would not be able to amend, but simply vote up or down on.

In the course of a skirmish on health care, Obama charged that his opponent's plan would lead to the destruction of employer-based health care. He said McCain's proposal to give people a refundable tax credit for coverage would be wiped out by the fact that McCain would also tax health benefits that workers receive from their employers. McCain's plan would give $2,500 in tax credits per person, or $5,000 per household.

McCain said Obama's plan would impose government mandates and would fine small-business owners who fail to insure their employees, although in fact, small businesses would be exempt under the Democrat's plan. McCain said his plan would allow Americans to spend their tax credit on the health care of their choice.

On Iraq And Humanitarian Intervention

When the topic switched to foreign policy and national security concerns, moderator Brokaw asked the candidates what their doctrine would be for the use of U.S. combat forces in the case of a humanitarian crisis where U.S. national security was not at stake.

Obama responded that issues such as genocide and ethnic cleansing should be considered to be part of U.S. national interests, and that the nation should intervene where possible. He said it would be necessary to work in concert with American allies and that as president, he would mobilize U.S. allies to take action in areas such as Darfur.

McCain took the occasion to criticize Obama's record on Iraq, saying that if the U.S. had heeded Obama's call to set a date for withdrawal, the result would have been disaster.

Regarding humanitarian interventions, McCain said he would approach such actions with caution. He noted that some past U.S. interventions had made the situation worse — in Lebanon during the Reagan era and in Somalia during the Clinton administration.

Pondering Attacks Along Pakistan's Border

An audience member asked whether the candidates would attack across borders, as in Pakistan, in order to chase U.S. enemies such as Osama bin Laden. Obama said that if Pakistan is unable or unwilling to hunt down bin Laden and "take him out," then the U.S. should go after him.

As he has in the past, McCain accused Obama of naivete for announcing an intended cross-border attack. He said he believes that the same counterinsurgency techniques that have worked in Iraq will work in Pakistan, adding, "I know how to get bin Laden. I'll get him," but he said he wasn't going to announce his intentions.

The final question of the night was one that moderator Brokaw described as "zen." An Internet participant asked, "What don't you know, and how will you learn it?" Neither candidate answered the question directly, but it offered them a chance to define themselves in terms of the presidency, and they took it, along with the chance to insert elements of their own personal stories.

Obama said, "One of the things we know about the presidency is that it's never the challenges you expect that consume most of your time." He mentioned his own rise from "modest means" and said the question was "are we going to pass on that same American dream?"

McCain said that "what I don't know is what all of us don't know, and that's what's going to happen, both here and abroad." He referred to his own history as a prisoner of war, saying, "I know what it's like to keep up hope in difficult times."

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