Wednesday, October 8, 2008

NASHVILLE, Tenn | Sen. John McCain unveiled a sweeping $300 billion proposal to prevent Americans from losing their homes as both presidential candidates sought Tuesday night in their second debate to convince undecided voters that they were best-equipped to address the economic crisis that has gripped the globe.

Just minutes into a spirited town-hall forum in which the two nominees clashed early and often, the Republican candidate said that as president, he would require the federal government to delve into the market to buy up bad mortgage debts and allow homeowners to refinance their mortgages.

“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,” Mr. McCain said at Belmont University.

The rocky economy has boosted Democrat Sen. Barack Obama in the polls, but last night, he offered no new proposals. Instead, he said the current economic 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.”

“We are in the worst financial crisis since the Great Depression and I know a lot of you are worried about your jobs, your pensions, your retirement accounts, your ability to send your children and grandchildren to college,” Mr. Obama said.

• Explore different election-night scenarios with our ‘Road to 270’ interactive electoral college map

Mr. McCain pushed back, distancing himself from the Bush administration, which has borne the brunt of the blame for the Wall Street crisis. “It’s my proposal. It’s not Senator Obama’s proposal; it’s not President Bush’s proposal,” he said firmly with a scowl, squinting in the lights.

From that first question in the debate moderated by NBC’s Tom Brokaw, Mr. McCain was eager for a fight, jumping off his stool to prowl the stage and handle the questions, which came from some of the 80 “undecided” voters selected by polling group Gallup. Mr. Obama soon followed his lead.

The two nominees, who have been engaged in increasingly personal attacks this week as the campaign has begun to trend toward the Democrat, also clashed on foreign policy.

In one pointed exchange, Mr. Obama bluntly challenged Mr. 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.”

Mr. McCain targeted his rival’s lack of experience, saying Mr. Obama foolishly threatening to invade Pakistan and said, “I’m not going to telegraph my punches, which is what Senator Obama did.” He also said Mr. Obama has declared he would speak directly with leaders of rogue nations, like Iran, dismissing that stance as naive.

The Democrat struck back, but Mr. McCain got the last word.

“Now, Senator McCain suggests that somehow, you know, I’m green behind the ears and I’m just spouting off, and he’s somber and responsible,” Mr. Obama said, pausing.

“Thank you very much,” Mr. McCain said, drawing a laugh from the crowd. He explained that when he sang the words “bomb, bomb Iran” to the tune of the Beach Boys “Barbara Ann,”

“I was joking with a veteran —I hate to even go into this. I was joking with an old veteran friend, who joked with me, about Iran.”

Mr. McCain also said his rival “was wrong about Iraq and the surge. He was wrong about Russia when they committed aggression against Georgia. And in his short career, he does not understand our national security challenges. We don’t have time for on-the-job training.”

Mr. Obama countered with sarcasm, saying he didn’t understand some things — like how the United States could face the challenge it does in Afghanistan after spending years and hundreds of billions of dollars in Iraq.

In one of his most dismissive comments, Mr. McCain referred to Mr. Obama as “that one” as he criticized the Democratic candidate for voting for a Bush administration energy proposal loaded with special-interest spending.

“You know who voted for it? You might never know. That one,” he said as he pointed at Mr. Obama. “You know who voted against it? Me.”

Before the debate began, Mr. Obama hoped to lock down his lead in the polls while Mr. McCain sought to turn around his fortunes. The economic turmoil has paid off for the Democrat, who a majority of Americans say is more capable of handling the crisis, polls show.

According to CNN’s latest average of polls, Mr. Obama leads Mr. McCain by six percentage points, 49 percent to 43 percent. put the Illinois Democrat’s lead at 5.5 percent.

With just four weeks left in the campaign, both sides have gone heavily negative. Mr. McCain’s running mate, Alaska Gov. Sarah Palin, accused Mr. Obama of “palling around with terrorists who would target their own country.” The charge refers Mr. Obama’s ties to 1960s-era radical William Ayers and to the Democrat’s former pastor, the incendiary Rev. Jeremiah A. Wright Jr.

Mr. McCain also accused Mr. Obama of lying about the Republican senator’s record, and asked, “Who is the real Senator Obama?”

In response, the Democrat released an ad quoting editorials that called Mr. McCain “erratic” and “out of touch,” and charged that his latest ad was an “angry tirade.”

The Obama campaign also released an online documentary that criticizes Mr. McCain over his involvement in the “Keating Five” scandal of the 1980s. The Arizona Republican was cleared of all charges, although he was found to have used poor judgment in his dealings with convicted banker Charles H. Keating Jr.

On the economy, Mr. McCain said Mr. Obama bears some of the blame for the current financial crisis, connecting him with mortgage giants Fannie Mae and Freddie Mac, whose meltdown tripped off the Wall Street slide.

“They’re the ones that with the encouragement of Senator Obama and his cronies and his friends, in Washington, that went out and made all these risky loans, gave them to people that could never afford to pay back,” Mr. McCain said as Mr. Obama perched on a stool, smiling.

The Republican said that he took action two years ago to try to rein in the two mortgages companies, but that his rival did nothing.

“There were some of us there were some of us that stood up against us it; there was others who took a hike,” he said.

Mr. Obama said Mr. McCain’s efforts as a senator to deregulate financial institutions was to blame for the crisis.

“A year ago, I went to Wall Street and said we’ve got to reregulate. And nothing happened. And Senator McCain during that period said that we should keep on deregulating because that’s how the free enterprise system works,” he said.

The Democrat again promised middle-class tax cuts to 95 percent of Americans, public-works projects to create jobs and increased regulation to end Wall Street’s excesses. But Mr. McCain said Mr. Obama voted 94 times to raise taxes or allow tax hikes and urged voters to look at his record as an anti-tax senator who also wants to cut spending.

Mr. McCain came back with his own record.

“Let’s not raise taxes on anybody,” the Republican said, drawing a contrast with Mr. Obama, who plans to raise taxes on the wealthy and corporations.

The debate was the second of three between the two major party 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,” Mr. McCain jabbed at his rival, who spurned the Republican’s calls for numerous such joint appearances across the fall campaign.

The candidates’ third and last debate will be Oct. 15 at Hofstra University in Hempstead, N.Y.

The first presidential debate focused on the economy, even though it was supposed to be about foreign policy. That debate, which took place Sept. 26, came as talks over the government’s bailout proposal imploded.

The political pundits ruled the first debate a draw, and there was no single sound bite or decisive moment that stood out. But since then, Mr. Obama has been rising in the polls, and some analysts say that is because he proved that he could hold his own in a debate with a 25-year Senate veteran, which has eased doubts that he is unqualified.

The third debate, like the first, will be divided into about eight 10-minute segments. The moderator will introduce each segment with a question and gives each candidate two minutes to respond. Then there is a five-minute discussion period, with direct exchanges between the candidates.

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