First presidential debate is back on – despite Wall Street bail-out delay

The long-awaited first televised debate between presidential candidates John McCain and Barack Obama was finally confirmed after Senator McCain agreed to fly down to Oxford, Mississippi from Washington today after President Bush pledged that America's legislators would "rise to the occasion" and pass his Wall Street rescue plan.

The debate had been in limbo after both candidates left a meeting of senior Congressional leaders at the White House on Thursday that failed to reach a deal on the Bush administration's $700bn rescue plan for the financial sector.

Thursday had started promisingly, with signs that Republicans and Democrats would quickly strike a deal on the plan, which President Bush had told the nation the previous night was essential to the country's financial wellbeing. The plan was intended to pump billions of dollars into the financial system, restoring liquidity and keeping credit flowing to businesses and consumers.

But as the day progressed, the deal slipped further and further away - and Democrats blamed McCain himself for helping disrupt efforts at compromise by refusing to commit himself either way when, at the White House meeting, John Boehner, the Republican minority leader in the House of Representatives, sprang a surprise. He declared that House Republicans could not support the plan to buy up so many toxic mortgage debts and urged an alternative that involved a smaller role for the federal government.

As the New York Times reported it, McCain's support for the $700bn deal was critical if fellow Republicans are to sign on.

The Times quoted a participant in the talks saying that at one stage, as he watched the plan unravel, President Bush said: "If money isn't loosened up, this sucker could go down." Other participants said that Barack Obama peppered Treasury Secretary Hank Paulson with questions about the rescue package, while McCain, sitting at the opposite end of the conference table to his rival, said little.

"What this looked like to me was a rescue plan for John McCain for two hours," said the Democrat Senator Christopher Dodd after the meeting broke up late on Thursday night. "To be distracted for two to three hours for political theatre doesn't help."

Obama campaign spokesman Bill Burton accused McCain of turning "a national crisis into an occasion to promote his campaign. It's become just another political stunt, aimed more at shoring up the senator's political fortunes than the nation's economy".

In response, McCain's advisers accused the Democrats of trying to hurry through the rescue package on the pretence that the majority in Congress were for it. Senior McCain aide Steve Schmidt said: "In reality, there is not a list of a majority of Democrats and Republicans who are willing to vote for it."

As for tonight's debate at the University of Mississippi, the independent Commission on Presidential Debates continued this morning to say that it was "moving forward" with the encounter. But while Barack Obama was adamant the debate should go ahead, McCain kept his rival guessing. It was not until after 4.0pm BST that the McCain camp finally agreed their candidate would attend.

FIRST POSTED SEPTEMBER 26, 2008