2008 third presidential debate, in New York: on Budget & Economy

Barack Obama: Fundamentals were weak BEFORE crisis; focus on middle class

McCAIN: Americans are hurting right now, and they’re angry. They’re innocent victims of greed and excess on Wall Street and as well as Washington, D.C. But we also have to have a short-term fix, in my view, and long- term fixes [as you outlined about my plan].

Q: Sen. Obama, you proposed $60 billion in tax cuts for middle- income and lower-income people, more tax breaks to create jobs, new spending for public works projects to create jobs.

OBAMA: The fundamentals of the economy were weak even before this latest crisis. Sen. McCain and I agree that we’ve got to help homeowners. I disagree with Sen. McCain in how to do it, because the way Sen. McCain has designed his plan, it could be a giveaway to banks if we’re buying full price for mortgages that now are worth a lot less.

Barack Obama: Make government fiscally responsible & live within budget

OBAMA: Every dollar I’ve proposed, I’ve proposed an additional cut hat it matches. To give an example, we spend $15 billion a year on subsidies to insurance companies. It doesn’t help seniors get better. It’s a giveaway. I want to go through the federal budget line by line, programs that don’t work, we cut. Programs we need, we should make them work better. Once we get through this economic crisis, we’re going to have to embrace a culture of responsibility, all of us, corporations, the federal government, & individuals who may be living beyond their means.

McCAIN: I’d have an across-the-board spending freeze. I know how to save billions of dollars in defense spending. One would be the marketing assistance program. Another one would be subsidies for ethanol. I would fight for a line-item veto, and I would certainly veto every earmark pork-barrel bill.

John McCain: Americans are innocent victims of Wall Street greed

McCAIN: Americans are hurting right now, and they’re angry. They’re hurting, and they’re angry. They’re innocent victims of greed and excess on Wall Street and as well as Washington, D.C. And they’re angry, and they have every reason to be angry. But we also have to have a short-term fix, in my view, and long- term fixes [as you outlined about my plan].

OBAMA: The fundamentals of the economy were weak even before this latest crisis. Sen. McCain and I agree that we’ve got to help homeowners. I disagree with Sen. McCain in how to do it, because the way Sen. McCain has designed his plan, it could be a giveaway to banks if we’re buying full price for mortgages that now are worth a lot less.

John McCain: $300B to buy up home mortgages; put a floor under it

Now, we have allocated $750 billion. Let’s take $300 billion of that and go in and buy those home loan mortgages and negotiate with those people in their homes, 11 million homes or more, so that they can afford to pay the mortgage, stay in their home.

Now, I know the criticism: what about the citizen that paid their mortgage payments? It doesn’t help that person if their next door neighbor’s house is abandoned. And so we’ve got to reverse this. We ought to put the homeowners first. And I am disappointed that Secretary Paulson and others have not made that their first priority.

John McCain: FactCheck: $300B mortgage plan shifts burden to taxpayers

The Facts: On his Web site, McCain calls it “an American Homeownership Resurgence Plan.” Under his plan, the government would buy up some troubled mortgages at their full value--meaning the lenders would not take a loss. The government would then renegotiate those mortgages, so that eligible homeowners would be paying rates based on their homes’ current, reduced value. The McCain campaign says the plan would cost about $300 billion: “Funds provided by Congress in the recent financial market stabilization bill can be used for this purpose.”

The Verdict: True. The McCain campaign acknowledges the plan would shift the burden to taxpayers.