Barack Obama and John McCain will face each other for the first time in a presidential debate this week even as the financial upheaval from Wall Street to Washington turns once-solid policy positions into treacherously shifting ground.

Both candidates, seeking a route to the White House through the worst economic crisis since the Great Depression, are continuing to tiptoe around saying whether they support the US Treasury’s trillion-dollar bailouts.

Mr Obama yesterday insisted “there can be no blank cheque”, saying that a proposal he described as “a concept with a staggering price tag — not a plan” required independent oversight. He also demanded measures to address “the crisis on Main Street”, as well as the one on Wall Street, by helping mortgage-payers to stay in their homes.

Mr McCain, aware that the bailout is being criticised by free-market conservatives, has promised merely that he will review the scheme, “as well as any modifications that might emerge in congressional negotiations”.

At the request of Mr Obama, Friday’s debate will focus on foreign affairs with a full discussion on economic issues delayed until the third — and final — forum on October 15. After acknowledging yesterday that “this is a global financial crisis and it requires a global solution”, neither the Democratic nominee nor his Republican rival expect to avoid difficult questions on the economy when they meet in Oxford, Mississippi, this week.

Tomorrow Mr Obama will go to Tampa Bay, Florida, to begin three days of intense preparation for the clash. In a weekend radio address, he pledged to press on with ambitious plans to cut taxes for 95 per cent of families, introduce affordable healthcare for all Americans and invest $150 billion (£80 billion) in a new energy initiative.

He made only passing reference to how he might pay for all these measures. “I won’t pretend that the changes we need will come without a cost,” he said, adding that he hoped to make them “in a fiscally responsible way”.

Analysts say that the next president will have little room for manoeuvre. Some are suggesting that Democratic plans for universal healthcare may have to be put on hold, while a longstanding Republican agenda for privatising social security pensions is unlikely to gain the support of voters who have more reason than ever to distrust Wall Street.

The existing $10 trillion-worth of publicly held debt is expected to soar when the cost of borrowing to shore up financial institutions is taken into account, although Henry Paulson, the Treasury Secretary, emphasised yesterday that the final price may well turn out to be lower than had been feared.

Mr Obama’s proposals for limited tax increases on capital gains may become more problematic when markets are still absorbing recent shocks. So, too, may be tax cuts of the sort proposed by both candidates for the American middle class.

The non-partisan Tax Policy Centre has estimated that the ten-year deficit incurred by Mr Obama’s tax plans would be $5.4 trillion. The various tax-cutting measures promised by Mr McCain would cost even more — $7.4 trillion.

Mr Obama has surrounded himself with a blue-chip team of economic advisers including the billionaire investor Warren Buffett, the former Federal Reserve chairman Paul Volcker, and the ex-Treasury secretaries Robert Rubin, Lawrence Summers and Paul O’Neill. At a rally yesterday in Charlotte, North Carolina, he again sought to blame the crisis on Republican policies over the past eight years.

“Senator McCain, who candidly admitted not long ago that he doesn’t know as much about economics as he should, wants to keep going down the same disastrous path,” he declared.

Mr McCain has reacted with some sharply populist rhetoric and a degree of inconsistency, abruptly changing his position on regulating financial institutions and the need for bailouts, as well as demanding that Chris Cox, the chairman of the Securities and Exchange Commission, be sacked for “betraying the public’s trust”.

Yesterday, speaking to the National Guard Association in Baltimore, the Republican nominee contrasted his plan “to keep people in their homes and safeguard the life savings of all Americans” with Mr Obama’s lack of a detailed plan of his own. “At a time of crisis, when leadership is needed, Senator Obama has not provided it,” he said.

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