The third and final American presidential debate produced heated discussion of the slumping U.S. economy and some testy exchanges about the conduct of the candidates' two campaigns. VOA's Michael Bowman reports from Hofstra University in New York, which hosted the event between Republican Senator John McCain and Democratic Senator Barack Obama.

Senator Barack Obama (left) greets Senator John McCain at beginning of debate in New York, 15 Oct 2008

In their last joint appearance before the November 4 election, senators McCain and Obama clashed on how best to revive the U.S. economy and spare Americans from pain and dislocation stemming from the continuing financial crisis.

McCain took a strong stand against any new federal taxes and said Obama's plan to raise taxes for high-income earners would harm small businesses and ordinary Americans.

"Why would you want to increase anybody's taxes right now? Why would you want to do that [to] anyone, anyone in America, when we have such a tough time, when these small business people, like Joe the plumber, are going to create jobs, unless you take that money from him and spread the wealth around,” said John McCain.

Senator Barack Obama speaks during presidential debate, 15 Oct 2008

Obama stressed he wants to cut taxes for middle-income Americans and said McCain represents a continuation of President Bush's economic policies.

"On the core economic issues that matter to the American people - on tax policy, on energy, on spending priorities - you have been a vigorous supporter of President Bush,” said Barack Obama. “Essentially what you are proposing is eight more years of the same thing, and it hasn't worked, and I think the American people understand it hasn't worked and we need to move in a new direction."

Unlike previous debate encounters where McCain and Obama spoke from podiums or took turns standing in front of a town hall audience, this debate had the two men seated close to each other at a single table. The proximity was intended to foster direct, spontaneous exchanges between the candidates, and to make it harder for either to give a series of pre-rehearsed mini-speeches.

The formula seemed to have worked.

Senator John McCain at presidential debate in New York, 15 Oct 2008

McCain, who repeatedly went on the offensive to challenge Obama's positions and statements, pressed his rival on his connection to a 1960's radical, William Ayers. He also mentioned Obama's ties to a civic organization, Acorn, that has been accused of voter registration fraud.

"Mr. Ayers - I do not care about an old, washed-up terrorist, but as Senator [Hillary] Clinton said in her debates with you, we need to know the full extent of that relationship,” he said. “We need to know the full extent of Senator Obama's relationship with Acorn, which is now on the verge of maybe perpetrating the greatest fraud in voter history."

Obama, who seemed determined to project calm and an even temper, took the opportunity to speak on the Ayers matter, which has been the focus of much media attention in recent days.

Senators Barack Obama (l) and John McCain debating at Hofstra University in New York, 15 Oct 2008

"Forty years ago, when I was eight years old, he [Ayers] engaged in despicable acts with a radical domestic group,” he said. “I have roundly condemned those acts. Ten years ago, he served and I served on a school reform board that was funded by one of Ronald Reagan's former ambassadors and close friends. Mr. Ayers is not involved in my campaign."

The wide-ranging debate also explored health care reform, trade policy, the negative tone of political advertising, judicial nominations, abortion and education.

During the debate, both campaigns issued statements rebutting their opponent's arguments. Both campaigns claimed victory moments after the event ended. Post-debate polls will explore the American public's verdict on the debate, in coming days.