“We look like hypocrites and fools to the entire world," Sanders said. “We have locked people up on an island, and I think that has hurt us all over the world.”
Clinton also said she supports Obama's plan, which would require the transfer of some prisoners to U.S. soil. One potential destination is a federal detention facility in Charleston, two hours south of the CNN town hall site at the University of South Carolina.
"The president hasn't made any decision," about where to transfer people deemed too dangerous to return to their native countries. "I believe the president is right to try to close it. I think it is a continuing recruitment advertisement for terrorists," Clinton said. "My hope is that Congress will work with him," she said. "We don't need Guantanamo hanging over our heads."
Clinton also complained of a double standard when it comes to her disclosure about her ties to Wall Street firms. She repeated an offer to release transcripts of closed-door speeches to Wall Street firms "if everybody else does it."
CNN host Chris Cuomo replied that Republican candidates will never do that, an implication that Clinton's offer is an empty one.
"Why is there one standard for me, Chris, and not for everybody else?" Clinton asked. "If people are going to ask for things, everybody should be on a level playing field."
Sanders said he gave no such speeches so has no transcripts to release.
“Here it is, Chris," he said. "There ain’t none.”
The forum is the last time Clinton and Sanders are likely to be in the same place ahead of the South Carolina primary vote Saturday. They were interviewed separately by the CNN host and audience members, with Sanders going first.
During Sanders's time on stage, CNN played a Clinton Web ad suggesting Sanders is a single-issue candidate who talks about little else than Wall Street reform.
Sanders noted that Clinton’s paid speeches in the run-up to her presidential bid included a series of addresses to Goldman Sachs and other large financial institutions.
“Maybe they’re a little bit nervous about the Wall Street issue,” Sanders said of the Clinton campaign.
Sanders said he would also be willing to release transcripts of any other paid speeches he's ever given, though he said it had been awhile.
Clinton dismissed the latest developments in the legal cases surrounding her use of a private email system for her government work as secretary of state.
A federal judge on Tuesday ruled that State Department officials and top aides to Clinton should be questioned under oath about whether they intentionally thwarted federal open-records laws by using or allowing the use of the private email server throughout Clinton’s tenure from 2009 to 2013.
The decision by U.S. District Judge Emmet G. Sullivan in Washington came in a lawsuit over public records brought by Judicial Watch, a conservative legal watchdog group, regarding its May 2013 request for information about the employment arrangement of Huma Abedin, a longtime Clinton aide.
Sullivan suggested from the bench that he might at some point order the department to subpoena Clinton and Abedin to return all emails related to Clinton’s private account, not just records their camps previously deemed work-related and returned.
Clinton said there is "no basis" for questions about the propriety of her email system or any question of a subpeona.
As to the political cost, Clinton said this: "I'm well aware of the drip, drip, drip."
Still, she said, she is confident the email questions are not a real factor in her presidential bid.
"It's just nothing that's going to have any lasting effect," she said.
Earlier, Sanders was asked about recent news reports that in 1974 he had said the CIA is “a dangerous institution that has to go.”
Sanders said he remains troubled by some aspects of the CIA’s history, particularly its role in overthrowing foreign governments, but said the agency “plays an important role” and that he no longer stands by comments made 40 years ago.
Sanders was also highly critical of the tobacco industry in response to a question from an audience member whose father had died of lung cancer.
Sanders shared that his father smoked multiple packs a day, coughed heavily and died young.
The Vermont senator accused the tobacco industry of continuing greed, saying “they’re trying to peddle cigarettes to kids all over the world” and calling tobacco dealers “literally like heroin dealers.”
Clinton had a slightly awkward exchange with a young African American woman who told her that she had recently started wearing her hair "natural," meaning not chemically straightened or processed, and had noticed a difference in the way people reacted to her.
"What?" Clinton asked, not hearing or quite understanding what the woman had said. She got it on the second try, though.
"Thank you for being so candid and brave, for standing up and saying this about yourself," Clinton said, before embarking on a discussion of how to break down many kinds of barriers to equal treatment for black people.
"You have a right to wear your hair any way you want to. That's your right," Clinton said, adding that she speaks "as someone who's had a lot of different hairstyles."