The Sept. 24 event, hosted by the Stanford Institute for Economic Policy Research (SIEPR), featured Peter Henry, left, a professor at the Graduate School of Business and economic adviser to Barack Obama, and Kevin Hassett (speaking), economic adviser to John McCain. SIEPR Director John Shoven, center, moderated the talk.

Steve Castillo

With John McCain and Barack Obama throwing political punches over how to deal with the country's financial crisis, you might think a face-off between a pair of their economic advisers would get ugly.

Think again.

Instead of pounding each other over whether the presidential candidates should hustle back to Washington to hash out the details of the Bush administration's $700 billion bailout proposal or stick to their campaigns and their first scheduled debate, Peter Henry, a Stanford Business School professor and Obama adviser, and Kevin Hassett, an American Enterprise Institute director who is on McCain's team, kept things relatively cordial during a discussion hosted Wednesday by the Stanford Institute for Economic Policy Research.

"Those of you coming to see red meat will be disappointed," Henry told the audience filling the Bechtel Conference Center.

Even as both advisers repeatedly stressed the need for a bipartisan approach in fixing the current crisis, their 90-minute exchange drew distinctions between the candidates and landed a few party-line jabs.

Henry painted McCain's economic proposals as extensions of Bush administration policies that ran up deficits by cutting taxes for big business and the most wealthy.

"After eight years, it's not been a great success," Henry said. He said Obama would cut taxes for "95 percent of Americans" while whittling down the federal deficit. Under McCain's plan, Henry said, the deficit would balloon.

While both candidates are calling for congressional oversight of any bailout plan for Wall Street, Henry said McCain has only recently called for more market regulation.

Hassett struck back, saying McCain has promised to deliver a balanced budget by 2013 and follow through with a tax plan that would cut the corporate tax rate and stimulate job growth. He said assertions that McCain has been opposed to regulation were "political nonsense."

Hassett said McCain backed a 2005 bill that would have clamped down on the mortgage finance giants Fannie Mae and Freddie Mac, which the government recently bailed out.

"The key regulatory moment in the last eight years was that Fannie and Freddie bill that was opposed by the Democrats and never got to the floor because of it," Hassett said. "And one of the sponsors was John McCain. So don't you tell me that he doesn't regulate."

Even with the taxpayer-backed financial rescue plan, the advisers said there's no reason for the candidates to drop their current economic policy plans or avoid talking about the many tax codes the next president and Congress will have to reckon with before they expire.

"My view is that it's absolutely certain that by the end of 2010 there's going to be the largest tax bill that we've seen in the U.S. since 1986," Hassett said. "The contents of that bill will likely follow the design of one of the candidates."