Barack Obama will increase taxes despite the fact Americans are already hurting and angry, his Republican presidential rival John McCain said today.
The two candidates met for their third and final head-to-head debate of the election at Hofstra University in Hempstead, New York just three weeks before election day on November 4.
Mr McCain said his rival’s economic plan would mean higher taxes for Americans, while he would cut them.
Mr Obama agreed tax policy was a “major difference” between the two campaigns but said they both wanted to cut them.
While he would cut taxes for “95% of working Americans”, Mr McCain would cut taxes only for the wealthiest, Mr Obama said.
The economic crisis dominated the opening moments of the debate at the end of a day which saw the second biggest drop in the Dow Jones industrial average on Wall Street in its history as it finished down by more than 730 points.
Mr Obama, who would be the first black US president if elected, has gained a clear lead in national polls and in most battleground states over the last few weeks, as the issue of the economy has dominated the race for the White House.
Mr Obama said the US was experiencing its “worst financial crisis since the Great Depression”.
And in his opening remarks Mr McCain said: “Americans are hurting right now and they’re angry, they’re hunting and they’re angry.”
He added that they have “every reason to be angry”.
Mr McCain said his $300bn (€224.28bn) plan for the US government to buy troubled mortgages would help “reverse this continued decline in home ownership“.
But Mr Obama said he was concerned that the 72-year-old Arizona senator’s plan could be “a giveaway to banks”.
Mr McCain needs a strong performance in the debate to get his campaign back on track and he wasted no time in challenging Mr Obama directly.
As the 47-year-old Illinois senator linked the Republican to the unpopular incumbent President George Bush, Mr McCain said: “Senator Obama, I am not President Bush. If you want to run against President Bush you should have run four years ago.”
But Mr Obama came back and said Mr McCain was a “vigorous supporter of President Bush” on economic issues, including tax, spending and energy.
“When it comes to economic policies, essentially what you are proposing are four more years of the same things and it hasn’t worked,” Mr Obama said.
“It’s very clear it hasn’t worked.”
The race has turned aggressively negative in recent days, with the McCain campaign accusing Mr Obama of ``palling around with terrorists'' and the Obama campaign calling Mr McCain ``erratic'' and ``lurching''.
Asked about the attacks, Mr McCain appeared to suggest it was because Mr Obama had not accepted his idea of holding 10 town hall debates.
“It’s been a tough campaign,” Mr McCain said, and accused his rival of outspending him on negative adverts.
But he went on: “I regret some of the negative aspects of both campaigns”.
He also added: “The fact is it has taken many turns which I think is unacceptable.”
Mr Obama said 100% of Mr McCain’s adverts had been negative and that he did not think the American people cared about the candidates’ personal disputes.
“I would love to see the next three weeks devoted to talking about the economy,” he said.
He added that he thought the two candidates could have disagreements over policies without insinuating that the other was a bad person.
Mr Obama said that during some rallies by Mr McCain’s running mate Sarah Palin, the crowd shouted “terrorist” and “kill him” whenever the Democrat’s name was mentioned.
But Mr McCain said he was “categorically... proud of the people who come to our rallies”.
Referring to his campaign’s claims that Mr Obama was linked to 1960s radical William Ayers – a founder of the violent anti-war group Weather Underground who is now a Chicago college professor – Mr McCain said: “I don’t care about a washed up terrorist.”
But Mr Obama said that Mr Ayers had “become the centrepiece of Sen. McCain’s campaign”.
Asked why his running mate would be better than Mr Obama’s, Mr McCain said: “Americans have got to know Sarah Palin, they know that she is a role model to women and other reformers all over America.”
He added that the US needed “that breath of fresh air”.
“She has ignited our party and people all over America who have never been involved in the political process. I can’t tell you how proud I am of her,” Mr McCain said.
Mr Obama said he thought Mrs Palin was a “capable politician” and agreed that she had excited the base of the Republican Party.
Many US political pundits have questioned Mr McCain’s surprise decision to pick the first-term Alaska governor as his running mate.
She initially reinvigorated his campaign, but has also been seen as “risky” and has performed badly in a series of interviews. Even some conservative commentators have turned against her and she has become easy fodder for late-night US comedy shows.
Shortly after the end of the debate, Irish bookmaker Paddy Power announced that it had decided to pay out on Mr Obama winning the race for the White House.
The move comes nearly three weeks before the election takes place.
A Paddy Power spokesman said: “We declare this race well and truly over and congratulate all those who backed Obama, your winnings await you.
“Although the Senator seemed a little off sorts in last night’s final debate we believe he has done more than enough to get him across the line on November 4th.”
Paddy Power has so far taken more than 10,000 bets on the election.