Economic crisis takes center stage
Obama, McCain use second presidential debate to argue over causes, cures for financial straits
NASHVILLE, Tenn. — Barack Obama and John McCain clashed over the causes and cures for the worst economic crisis in 80 years Tuesday during a debate in which Republican McCain called for a sweeping $300 billion program to shield homeowners from foreclosure.
“It’s my proposal. It’s not Sen. Obama’s proposal. It’s not President Bush’s proposal,” he said during a debate he hoped could revive his fortunes in a presidential race trending toward Obama.
Democrat Obama said the current crisis was the “final verdict on the failed economic policies of the last eight years” that were pursued by Bush and “supported by Sen. McCain.”
He contended that Bush, McCain and others had favored deregulation of the financial industry, predicting that it 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 beyond the details of the $700 billion bailout that recently cleared Congress. The legislation allows but does not require Treasury to purchase mortgages directly. Obama has said previously that idea should be studied, and his campaign contended McCain’s proposal was not new.
McCain’s campaign issued a written statement that said the $300 billion cost of his initiative would be paid out of the $700 billion approved last Friday.
“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 and let people be able to make those payments and stay in their homes,” he said.
“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 give some trust and confidence back to America.”
The debate was the second of three between the two rivals, and the only one to feature a format in which voters posed questions to the candidates.
“It’s good to be with you at a town hall meeting,” McCain told his rival, who had spurned the Republican’s calls for numerous such joint appearances during the fall campaign.
They debated on a stage at Belmont University in a race that has lately favored Obama, both in national polls and in surveys in pivotal battleground states.
The audience was selected by the Gallup 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 their questions and also chose others that had been submitted online.
The candidates sought 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 responded 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.
Pivoting quickly to show his concern with members of the audience listening from a few feet away, Obama said, “You’re not interested in politicians pointing fingers. You’re interested in the impact on you.”
But that didn’t stop the two men from criticizing one another repeatedly as the topics turned to energy, spending, taxes and health care.
Obama said McCain was going to require taxes on the health benefits that 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 medical tests such as mammograms.
McCain countered that under his rival’s plan “Sen. Obama will fine you” if parents fail to obtain health insurance coverage for their children but has yet to say what the fine would be. “Perhaps we will find that out tonight,” he said.
Obama said McCain “voted against the expansion” of the government- run children’s health care program.
The two men have taken dramatically different approaches to easing the problem of millions of uninsured Americans. McCain favors a $5,000 tax credit that he says would allow families to find and afford health care on their own.
Obama wants to build on the current system, in which millions receive coverage through the workplace, with government funding to help uninsured families obtain coverage.
McCain also said it was important to reform the giant benefit programs such as Medicare, Medicaid and Social Security.
“My friends, we are not going to be able to provide the same benefit for present-day workers that present- day retirees have today,” he said, although he did not elaborate.
The debate also veered into foreign policy as McCain accused Obama of foolishly threatening to invade Pakistan. “I’m not going to telegraph my punches, which is what Sen. Obama did,” he said.
Obama 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.”
