He said it was: "to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes."
McCain claimed this was his idea, and no one else's.
"And it's my proposal, it's not Sen. Obama's proposal, it's not President Bush's proposal," he said.
That claim is exaggerated. Similar authority was granted in last week's bailout bill. And, Obama proposed the same idea - two weeks ago.
"... we should consider giving the government the authority to purchase mortgages directly instead of simply purchasing mortgage-backed securities," Obama said.
Paying for all those bad loans, though, is a problem - and McCain admitted it.
"Is it expensive? Yes," he said.
So it was hard to square that admission with McCain's promise to put the clamps on federal spending.
"We'll just have to have across-the-board freeze," he said.
Obama also made his own stunning claim on spending: That all of his promises on energy, health care and education are paid for with his budget cuts.
"I'm cutting more than I am spending, so that it will be a net spending cut," Obama said.
The fact is, Obama's promises will increase the deficit. The nonpartisan Committee for a Responsible Federal Budget says Obama hikes the deficit by $281 billion in four years. McCain is also a big spender - $215 billion in the red.
The biggest reality check from the debate Tuesday night is how little the fiscal crisis has changed these candidates. The federal government has just assumed roughly $1 trillion in new liabilities - and neither candidate will admit there's been any real impact on their promises.