McCain and Obama debate taxes and financial crisis

McClatchy NewspapersOctober 7, 2008 

NASHVILLE, Tenn. — Reaching out to an anxious nation, John McCain and Barack Obama vied in a spirited debate Tuesday over who'd be the better steward of an economy in crisis.

"Americans are angry, they're upset, and they're a little fearful," McCain said at the outset of a pressure-packed debate. ""It's our job to fix the problem. Now, I have a plan to fix this problem."

"You need somebody in Washington working for you," Obama told voters huddled in a town-hall meeting and millions more watching at home.

With stock markets plummeting, the economy dominated questions posed by voters both inside the town hall style session and over the Internet.

Participants in the 90-minute meeting were 80 undecided voters from the Nashville area selected by the Gallup polling organization. The debate, held at Belmont University, was moderated by NBC's Tom Brokaw.

Right from the start, the two men worked to show that they understand voters' worries, to stress that they know how to fix problems on Wall Street and in the federal budget, and to blame the other for contributing to the economic problems or proposing changes that would make problems worse.

McCain said he'd shore up the economy by keeping taxes low, pushing energy independence and ordering the Treasury Department to buy up bad mortgages to shore up home values.

"It's my proposal," he said. "It's not Sen. Obama's proposal, it's not President Bush's proposal."

Obama called for tax cuts for the middle class, help for homeowners to stay in their homes, and help for local governments to build bridges and other infrastructure improvements to create jobs. Longer term, he said, he would expand health care and improve energy independence.

He called the financial bailout approved by Congress — with support from both major party candidates — a first step.

Yet he all but acknowledged some of the fears many Americans have about bailing out Wall Street, noting reports of a $400,000 junket taken by executives of the failed insurance giant AIG just a week after the company was rescued by the government.

"The Treasury should demand that money back and those executives should be fired," Obama said.

McCain said he'd tried to rein in mortgage companies Fannie Mae and Freddie Mac two years ago — saying their home lending policies were "the match that started this forest fire" — but that Sen. Obama and other Democrats had blocked his efforts. He said Obama got heavy campaign contributions from the two mortgage-lending giants.

Obama said he "never promoted" Fannie and Freddie, then changed the subject by noting that voters don't like the blame game. "You're not interested in hearing politicians point fingers," Obama said.

But he too went on the attack early, blaming McCain and the Republican Party for the crisis, calling it "a final verdict on the failed economic policies of the last eight years."

McCain ripped Obama for proposing to raise some taxes, noting that the last president to raise taxes in the face of a similar economic crisis was Herbert Hoover.

"Let's not raise anybody's taxes," McCain said.

McCain also suggested that Obama would renege on his promise of a middle-class tax cut, saying he promised one as a candidate for the Senate but then never proposed one as a senator.

"Let's be clear," Obama countered. "I want to provide a tax cut for 95 percent of Americans." He stressed that he would cut taxes for those making less than $200,000 a year and raise them only on those making more than $250,000.

Obama also said McCain's plan would give the average Fortune 500 corporate CEO a tax cut of $700,000. "That is not fair and it doesn't work," Obama said.

An Internet question from someone who called herself a "78-year-old child of the Depression" asked what sacrifices each man might ask Americans to make to put the country back on the right track.

"There are some programs we may have to eliminate," McCain said. He added that he'd eliminate pork barrel spending through earmarked appropriations and freeze federal spending for everything except defense, veterans care and "some other vital programs."

Obama said he'd also cut spending but would use a "scalpel" rather than across the board spending freezes. "That's an example of an unfair burden sharing. That's using a hatchet to cut the federal budget," he said.

Pressed to say who they might name as Treasury Secretary, McCain said he'd want someone well known and trusted. He mentioned former eBay chief executive Meg Whitman as an example. Obama mentioned billionaire investor Warren Buffett as a possibility, but insisted there are plenty of other possibilities.

Turning to foreign affairs, the two clashed on Pakistan. Obama said that if Pakistani troops wouldn't go after Osama bin Laden, who's believed to be hiding in that country, then if U.S. troops had him "in our sights . . . then we will take him out."

McCain said that Obama was threatening to attack Pakistan, and that would hurt relations with the U.S. He said Theodore Roosevelt, his hero, said "speak softly but carry a big stick" but that "Senator Obama likes to talk loudly."

Obama countered that he wasn't calling for an invasion of Pakistan, but for getting bin Laden. As for speaking softly, he said that McCain was the one who'd joked about "bomb, bomb, bomb Iran" to the tune of a Beach Boys song. "That, I don't think is an example of speaking softly," Obama said. McCain said he'd just been joking with an old veteran friend when he said that.

At one point, McCain said that Obama had been wrong about Iraq and Russia's invasion of Georgia and concluded that "We don't have time for on-the-job training, my friends."

It was the second of three debates. The third and final debate will be Oct. 15 at Hofstra University in Hempstead, N.Y. It will focus on domestic issues.

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