PORTLAND - Oregon's Senate candidates focused on the economic crisis and argued over tax policies in their first general election debate Thursday night.

U.S. Sen. Gordon Smith (R-Pendleton) argued for his re-election, defending his support of the Bush administration's tax cuts, saying they were the kind of policies that were needed to get the economy going again.

With an economic downturn facing the country, Smith said that he was the kind of senator Oregon would need to send back to Washington, D.C.

"I believe in pro-growth tax cuts," Smith said. "Every Oregonian, because of how I have voted, is paying lower federal taxes today. Every Oregonian is paying higher state taxes because of way Jeff Merkley voted."

Smith went on to question whether Democratic candidate Jeff Merkley (D-Portland) was ready to help Oregon through the financial crisis, and he criticized the Oregon House Speaker for not supporting the Bush tax cuts.

"You proposed raising corporate taxes and putting up trade barriers. These are the things done during Great Depression," Smith said to Merkley. "The fact of matter is revenue went up not down when we cut taxes. If we leave money with taxpayers, it will circulate through the economy and create more opportunity."

Merkley, who has posted a tax plan on his website that involves tax cuts for middle income voters, fought back with equal tenacity, saying that it was Smith's and President Bush's kind of leadership that led to the Wall Street financial crisis in the first place.

"You have sought to cut taxes on wealthiest and most powerful special interests," Merkley said to Smith. "So much has gone wrong during your 12 years in Senate, and now we have this meltdown on Wall Street. Now wages are going down while prices are going up."

But, Smith was quick to berate Merkley for his tax plan, saying that a higher corporate tax would only harm the economy further.

"What you're saying is when we have second highest corporate tax rate in world, we should make tax rates even higher," Smith said. "If you want people to respond to incentives, you want them to stay."

The candidates also sparred over support of the Iraq war. When asked about issues where he went against his party, Merkley listed several local issues before going into issues he disagreed with Democrats on at the national level. Specifially, Merkley said, he disagreed with his party as it stood behind President Bush in the lead-up to the invasion of Iraq.

"I opposed the Iraq war," Merkley said. "Gordon Smith gave bush a blank check on war, and not we have 4,100 American soldiers that paid the ultimate price."

Smith countered by saying that Merkley's legislative record indicated that he supported the war when it began.

"Jeff Merkley says he was against war from beginning, but there was a resolution in the State House that praised the courage of George W. Bush, and he voted yes," Smith said. "He voted yes and now he wants to tell you no."

Merkley was incensed by Smith's comment.

"Is there no depth you will go to misconstrue my record?" Merkley asked Smith. "When the resolution came up to praise our troops I said 'yes!' You know about that speech, but you choose to mislead the citizens of this state, and that is really a shame."

The candidates have engaged in one of the nastiest television ad wars in the country, and Thursday night, many voters took advantage of an opportunity to question Smith and Merkley about the ads. One voter sought to go beyond the negative tenor and asked Merkley and Smith to name three votes on which they agreed.

"In his 90 percent Bush-Cheney record, there is 10 percent where he is working with Oregonians," Merkley said, referring to Smith's work on a tobacco tax and his work to take on hate crimes.

Smith praised Merkley's family values, but when pressed for specific votes Merkley cast that he supported, the incumbent senator drew a blank.

"Oh his voting record that's a little harder to do," Smith said. "I'm sure I could find something."