Obama to the fore as McCain debate gets edgy

The White House candidates tore into each other's plans to help America's struggling working families in a debate that saw both struggle to maintain a veneer of civility.

John McCain is rapidly losing ground to Barack Obama in the opinion polls, a situation made more perilous by the dire economic situation. Senator Obama was judged to have come out of the debate a winner on points and this was a big disappointment for the McCain campaign which needed a big win to turn tide of voter sentiment around in the last month of the race.

In the free-flowing debate, both candidates sought to connect with voters in personal ways. Senator Obama talked about the price of petrol saying "you're paying $3.80 here in Nashville," while his opponent addressed the audience as "my friends" walking back and forth across the red carpeted stage in the sort of "town hall" forum that he normally revels in.

There were occasional flashes of his disdain from Mr McCain for his democratic opponent and at one point he referred to Mr Obama as "that one," while jabbing a finger in his general direction. The intimate setting, where the candidates answered voters directly, helped ensure that the rancour which has been on display on the campaign trail in recent days was kept to a minimum.

But as the candidates listened to their plans and initiatives being mischaracterised before an audience of some 80 undecided voters, there were frequent looks of exasperation. And when either candidate's turned negative on the other - as both did repeatedly - they generated a sharply hostile response from focus groups being monitored by CNN in the swing state of Ohio.

During their debate at Belmont University the candidates set out starkly different plans for the economy as both men accused each other of drawing up plans to tax the middle classes. With financial markets in freefall and the economy tipping into recession the candidates were asked how they would save older voters especially from financial ruin.

Barack Obama's answer was that "the middle class need a rescue package" in the form of tax cuts so that they can stay in their homes.

John McCain said the US needed to achieve "energy independence" and "stop this spending spree that's going on in Washington, and loading debt onto future generations. But in the next breath he said that as president he wanted to buy up all the defaulting home loans to help keep people in their houses.

The housing plan, to be run by the US Treasury Department would buy up toxic mortgages from householders facing foreclosure and swap them for new lower fixed-rate mortgages.

The plan would cost some $300 billion and Democrats in Congress have been asking for something similar for months.

"Is it expensive?" yes," he said, but until we stabilise home values in America we're never going to star turning around and creating jobs and fixing our economy," he declared.

"Americans are angry, they're upset and they're a little fearful," Mr McCain said "We don't have trust and confidence in our institutions."

The Arizona Senator is fighting strong headwinds from the grim economic situation and the dismal legacy of George Bush. He is falling behind in the polls and voters increasingly say they trust Senator Obama's ability to manage the economic crisis over his.

Pressed to name the most urgent problems they would address as President - health care, entitlement spending, or energy - Senator Obama cited energy and health care first. Mr. McCain focused on entitlement spending and said he would initiates an across the board spending freeze

Senator Obama said: "We are in the worst financial crisis since the Great Depression, and a lot of you I think are worried about your jobs, your pensions, your retirement accounts."

He described Mr McCain's plan to freeze spending as unfair and said it was like using a hatchet when a scalpel was needed.

He also tied the crisis to the programme of deregulation of the financial industry, which Mr McCain and the Republicans had been pushing for years. And he also queries Mr. McCain's tax cut plan, which he said would cost the nation $300 billion and would benefit large corporations, notably oil companies.

Mr McCain fought back characterising Mr Obama as a liberal politician who would raise taxes in the midst of economic hard times, a recipe for disaster. Mr Obama forcefully responded that his opponent' s policies would only help the wealthy.

There were also sharp clashes over foreign policy, especially over the war in Iraq and the failure to hunt down Osama Bin Laden.

"Senator Obama would have brought our troops home in defeat. I will bring them home in victory and in honour," Mr McCain said.

Mr McCain tried to paint him as a foreign policy naïf saying that he was prepared to attack Pakistan in order to kill Osama Bin laden.

"We have fundamental differences about the use of military power," McCain said.

Senators Obama and McCain make their closing remarks