CBS News's Katie Couric questions Palin and McCain on the apparent contradiction between statements they've made on Pakistan:

Obama is proposing today that federal deposit insurance be raised from $100,000 to $250,000 in an effort to help get the financial markets bill, which the House voted down yesterday, passed. Here is a portion of the statement his campaign released this morning:

"One step we could take to potentially broaden support for the legislation and shore up our economy would be to expand federal deposit insurance for families and small businesses across America who have invested their money in our banks.

"The majority of American families should rest assured that the deposits they have in our banks are safe. Thanks to measures put in place during the Great Depression, deposits of up to $100,000 are guaranteed by the federal government.

"While that guarantee is more than adequate for most families, it is insufficient for many small businesses that maintain bank accounts to meet their payroll, buy their supplies, and invest in expanding and creating jobs. The current insurance limit of $100,000 was set 28 years ago and has not been adjusted for inflation.

"That is why today, I am proposing that we also raise the FDIC limit to $250,000 as part of the economic rescue package -- a step that would boost small businesses, make our banking system more secure, and help restore public confidence in our financial system.

"I will be talking to leaders and members of Congress later today to offer this idea and urge them to act without delay to pass a rescue plan," said Barack Obama.

In the Headlines

"Bailout Plan Rejected, Markets Plunge, Forcing New Scramble to Solve Crisis" (Sarah Lueck, Damian Paletta and Greg Hitt, Wall Street Journal) - The House of Representatives defeated the White House's historic $700 billion financial-rescue package -- a stunning turn of events that sent the stock market into a tailspin and added to concerns that the U.S. faces a prolonged recession if the legislation isn't revived.

"In Bailout Vote, a Leadership Breakdown" (Jackie Calmes, New York Times) - The collapse of the proposed rescue plan for the teetering financial system was the product of a larger failure -- of political leadership in Washington -- at a moment when the world was looking to the United States to contain the cascading economic crisis.

"McCain blames Democrats for bailout failure; Obama says look at the record" (Seema Mehta and Maeve Reston, Los Angeles Times) - John McCain, calling himself a man of action like his hero Teddy Roosevelt, told a raucous crowd here Monday that he had helped lead the charge to pass the Wall Street rescue plan. "I've never been afraid of stepping in to solve problems for the American people," McCain said to cheers and applause.

"Palin Gets Ready For Eagerly Awaited Debate With Biden" (Juliet Eilperin, Washington Post) - Alaska Gov. Sarah Palin flew yesterday to Sedona, Ariz., where she will spend the next two days at Sen. John McCain's ranch preparing for Thursday's vice presidential debate, a potentially pivotal event in what has been a whirlwind since she joined the Republican ticket.

From Late Night

Letterman:

Here is the latest from Fox News/Rasmussen, which conducted polls in the battleground states of Colorado, Florida, Ohio, Pennsylvania and Virginia:

Colorado
Obama 49
McCain 48

Obama leads by 5.0 points in the RCP Average for Colorado

Florida
McCain 47
Obama 47

McCain leads by 0.7 of a point in the RCP Average for Florida

Ohio
McCain 48
Obama 47

McCain leads by 1.2 points in the RCP Average for Ohio

Pennsylvania
Obama 50
McCain 42

Obama leads by 5.5 points in the RCP Average for Pennsylvania

Virginia
Obama 50
McCain 47

Obama leads by 1.4 points in the RCP Average for Virginia

McCain said late this afternoon that it's time for Congress to get back to work, and not time to point fingers. Of course, he and his campaign immediately preceded this by getting in a couple jabs at Obama and the Democratic leadership.

"Senator Obama and his allies in Congress infused unnecessary partisanship into the process. Now is not the time to fix the blame. It's time to fix the problem," McCain said from Des Moines, Iowa at around 5:15 p.m. Eastern.

Earlier in the afternoon, McCain economic adviser Doug Holtz-Eakin released a statement with even more knocks against the Democrats. He said Obama and Democratic leaders Harry Reid and Nancy Pelosi "put at risk the homes, livelihoods and savings of millions of American families" and that Obama "phoned it in." He then stated bluntly: "This bill failed because Barack Obama and the Democrats put politics ahead of country."

On a conference call with reporters held just after McCain's speech in Iowa, Holtz-Eakin took a much more nonpartisan tone. He went the entire call, by this reporter's count, without mentioning Obama once and largely talked up McCain's efforts over the last few days, saying the Republican nominee made "dozens of calls" to congressional leaders and those who were expected to vote against the bill.

He did blame Democrats for partisan attacks, but also noted that Republicans "chose to fold their cards" instead of "rising above the attacks."

"This is not a credit to either side," Holtz-Eakin said. "This is not the outcome that John McCain wanted."

From Obama spokesman Bill Burton:

"This is a moment of national crisis, and today's inaction in Congress as well as the angry and hyper-partisan statement released by the McCain campaign are exactly why the American people are disgusted with Washington. Now is the time for Democrats and Republicans to join together and act in a way that prevents an economic catastrophe. Every American should be outraged that an era of greed and irresponsibility on Wall Street and Washington has led us to this point, but now that we are here, the stability of our entire economy depends on us taking immediate action to ease this crisis."

FactCheck.org takes a look at some of claims in the first debate. Here's some of what it found:

* Kissinger did say he wanted "high level" talks with Iran, but, despite what Obama claimed, he didn't say at the presidential level.

* Obama did vote to raise taxes on people making as little as $42,000 a year, despite his denial.

* Although Joint Chiefs of Staff Chairman Admiral Mike Mullen did say a time line for withdrawal could be “very dangerous,” he was not talking specifically about Obama's plan, as McCain claimed.

* Earmark appropriations have decreased over the years, despite McCain's claim that they have "tripled."

* Iraq has a $60 billion surplus, not the $79 billion Obama claimed.

* Oil imports run at $536 billion this year, not the $700 billion McCain claimed.

* 81% of households would receive a tax cut under Obama's plan, not the 95% he claimed.

* Workers would be taxed on the value of health benefits under McCain's plan, not employers, as Obama claimed.

* Obama would allow people to keep their current health-care plans or chose from private ones, despite McCain's claim that Obama wants a government-run health-care system.

* Gen. Eisenhower drafted a letter accepting responsibility if the D-Day invasion failed, not offering his resignation, as McCain claimed.

FactCheck details its research in the article.

Obama holds a small lead in a new PPP poll in North Carolina (Sept. 28-29, 1041 LV, MoE +/- 3.0%), moving him ahead slightly in the RCP average.

Obama 47 (+1 vs. last poll, Sept. 17-19)
McCain 45 (-1)
Barr 3

Obama leads by 0.7 of a point in the RCP Average for North Carolina

From McCain-Palin senior policy adviser Doug Holtz-Eakin:

"From the minute John McCain suspended his campaign and arrived in Washington to address this crisis, he was attacked by the Democratic leadership: Senators Obama and Reid, Speaker Pelosi and others. Their partisan attacks were an effort to gain political advantage during a national economic crisis. By doing so, they put at risk the homes, livelihoods and savings of millions of American families.

Barack Obama failed to lead, phoned it in, attacked John McCain, and refused to even say if he supported the final bill.

Just before the vote, when the outcome was still in doubt, Speaker Pelosi gave a strongly worded partisan speech and poisoned the outcome.

This bill failed because Barack Obama and the Democrats put politics ahead of country."

The Financial Market bill failed today. Here is a breakdown of the vote:

Roll Call Vote: 228 Nays - 205 Yeas

Democrats: 140 (60%) voted Yea, 95 (40%) voted Nay

Republicans: 65 (33%) voted Yea, 133 (67%) voted Nay

Of the 30 incumbents (15 Republicans, 15 Democrats) running for re-election that are included in the RCP Top 50 House Races list, 8 voted Yea and 22 voted Nay.