Debate! Debate! 3

Asked what he'll have to scale back, Obama uses the opportunity to lay out his agenda for the next year. Energy independence, health care, education, investing in green jobs, infrastructure (Broadband reaching into rural communities... That's right, I said "rural.")

McCain says government will have to cut spending, starting with ethanol subsidies (nice line on Obama's liberalism, "It's hard to reach that far over to the left.") He brings up fixed-cost contracts for defense spending... Says every agency will have to be scrubbed for efficiency.

Lehrer, noticing neither man said what they'd cut specifically asks again. Obama says he may scale back his energy plan and will cut $15 billion in subsidies to insurers under Medicare.

Lehrer again asks for a broad

A freeze on spending on everything but defense McCain says. Obama brings up Iraq and says the war needs to come to an end. McCain says we spend $700 billion in foreign, a lot of it going to countries that don't like us very much and then brings up nuclear power.

Will this crisis affect the way you rule the country?

Obama: There is no doubt it will affect our budgets... but we need to know what our values are and what our priorities are.

McCain responds by saying Obama's health care plan will federalize health insurance and then says we can adjust the budget (didn't he just say he'd institute a spending freeze?). McCain says the crisis is partly due to out-of-control spending - will Obama bring up Iraq now?

Obama doesn't go for the Iraq issue but does bring up Bush - saying this "orgy of spending" happened under his watch. McCain says he's different, calls himself "a maverick of the Senate."