McCain and Obama meet in last White House debate

By John Whitesides, Political Correspondent

HEMPSTEAD, New York (Reuters) - Republican John McCain and Democrat Barack Obama face off in their final debate on Wednesday, with McCain needing a strong performance to begin to turn around a White House race that could be slipping away.

Three weeks before the November 4 election, McCain is running out of chances to reverse his slide in national opinion polls and gain ground on a surging Obama.

The 9 p.m. EDT (0100 GMT Thursday) encounter at Hofstra University in Hempstead, New York, will be the third and last debate between the presidential contenders and their final opportunity to reach a television audience of 60 million or more.

"You can do yourself a lot of good when you have a debate with that many people watching," South Carolina Republican Party Chairman Katon Dawson said.

Opinion polls show Obama gaining strength nationally and in battleground states after weeks of economic turmoil and plunging stock markets, with more voters saying they trust Obama's leadership on the economy.

A Reuters/C-SPAN/Zogby poll gave Obama a 4-point edge over McCain, but other national polls showed a larger margin for the Illinois senator. A CBS News/New York Times poll showed Obama leading by 14 percentage points, the fifth survey this week to register Obama's lead in double-digits.

The bad poll news heightened the debate stakes for McCain, who unveiled a package of measures on Tuesday to help investors, particularly older Americans who have seen their retirement savings decimated by stock market losses.

The stock market continued its volatile ways on Wednesday, with the broad Standard & Poor's 500 stock index dropping 9 percent. Government reports showed disappointing retail sales and quiet factories in September as the credit crisis picked up steam.

McCain indicated he is likely to bring up Obama's relationship with former 1960s radical William Ayers. The two served on a community board in Chicago together and Ayers hosted a political event for Obama early in his career.

Obama had noted McCain's reluctance to discuss the issue with him directly during their last encounter.

'DIDN'T HAVE THE GUTS'

"I was astonished to hear him say that he was surprised that I didn't have the guts to do that," McCain said in an interview with KMOX radio in St. Louis, Missouri. "I think he's probably assured that it's going to come up this time."

Even if McCain raises the issue of Ayers, Obama plans to keep his focus on the economy and the future, Obama adviser David Axelrod said.

"That's what the American people want to hear." Axelrod told reporters. "I don't think they're interested in a lot of finger-pointing and back-and-forth and personal, gratuitous attacks."

Several recent polls have shown McCain's attacks on Obama's character have largely backfired, increasing unfavorable opinions about McCain among voters looking for solutions on the economy.  Continued...