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Thursday night, with the crucial South Carolina primary looming on Saturday, the four remaining major candidates for the Republican presidential nomination (Rick Perry and Jon Huntsman dropped out this week) gathered in Charleston for what could be the final GOP primary debate. Former Massachusetts governor Mitt Romney, who fought ex-Pennsylvania Sen. Rick Santorum to a tie in Iowa and won handily in New Hampshire, could conceivably lock up the nomination if he wins big in South Carolina. If that happens, it won't be because Romney will have a big lead in the delegate race—he won't—but because a third consecutive first-place finish will make it difficult for the other candidates to continue to raise money. That's why Romney hasn't yet agreed to attend the two GOP debates scheduled for next week—he may not need to.
Former Massachusetts governor Mitt Romney has faced some tough questions about his taxes since telling reporters on Tuesday that he pays "close to 15 percent" of his income to the IRS—a lower rate than many Americans who don't have the GOP front-runner's fortune, which is estimated to be as high as a quarter-billion dollars. If the booing at Thursday night's debate is any indication, Romney remains vulnerable on the tax issue, even among Republican primary voters.
"[Why shouldn't] the people of South Carolina, before the election see last year's return?" CNN's John King asked the ex-governor.
"Because I want to make sure that I beat President Obama, and every time we release things, drip by drip, the Democrats come out with another array of attacks," Romney responded. "If I'm the nominee, I'll put these out at one time, so we'll have one discussion of all of this."
When King pointed out that Mitt's father George Romney released twelve years of tax returns when running for president and asked Mitt if he would follow his father's example, the candidate chuckled awkwardly before saying, "Maybe, I don't know how many returns I'll release."
At that point, Romney had to pause for parts of the South Carolina audience to stop heckling and booing him. Then he recovered with what's likely to be a common refrain in the general election if the ex-governor wins the nomination. "I'm not going to apologize for being successful," Romney said, and the audience cheered.
The Obama administration offered a tax proposal last year that would have made the wealthy pay a larger share of their income. The proposal was dubbed "The Buffet Rule," after wealthy investor Warren Buffett, who said that some of his employees pay lower tax rates than he does. At the time, Democrats salivated at the possiblity that Romney might also be paying a lower effective tax rate than people who don't own more than one house, even as he's proposing even larger tax cuts for the well-off. With most Americans still struggling financially, voters might not be as receptive to a super-wealthy politician asking them to bear a larger share of the tax burden so that he and other wealthy Americans can pay less.
There's also the possibility that there's some sort of major scandal lurking in Romney's financial history that could sink his chances in the general election.
Newt Gingrich, who released his tax returns Thursday evening, wasn't shy about raising the possibility.
"If there’s anything in there thats going to help us lose the election we should know before he wins the nomination," Gingrich said. "If there’s nothing in there why not release it?"
At Thursday's GOP presidential debate in Charleston, Rick Santorum pulled out what he thought was the perfect anecdote for bureaucratic overreach. As he explained it, he'd talked to a state health official in Iowa and been informed that the state had actually been fined by the federal government because it didn't cover enough people under Medicaid. It was an example of well-intentioned big government gone bad and passing the burden onto a cash-strapped state. But was it true?
As it happens, ABC's Huma Khan looked into this when Santorum first brought it up earlier in January:
First, there is no "Department of Public Welfare" in Iowa, as Santorum stated. It’s the Department of Human Services that disburses Medicaid grants.
Second, it is unclear to what "fine" Santorum was referring. Iowa, like other states, receives federal reimbursement for the money it disburses in Medicaid fees. There is no quota system or target that the state has to meet in order to be eligible for federal money. The amount of money that each state receives is dependent on its economy.
"The formula is based on how well that state is doing economically and since Iowa is improving its economic status, we are soon to lose a couple percentage points," said Roger Munns, a spokesman for the Iowa Department of Human Services. "This is not a punishment. This is a recognition that Iowa’s economy is improving relative to other states."
So: Not exactly the nightmare scenario Santorum warned us of. But it could be worse; when Michele Bachmann wanted an anonymous expert to back up her allegation that under Obamacare, IRS agents would be forced to approve every medical procedure, she claimed to have heard it first-hand from a seven-foot-tall doctor.
At Thursday night's Republican primary debate on CNN, Mitt Romney told the audience he "didn't inherit money from my parents." Romney's dad, George Romney, was the CEO of the American Motors Company and governor of Michigan during the 1960s, so it's hard to believe he didn't have money to bequeath his son Mitt. As it happens, the younger Romney explained what happened to his inheritance in more detail in an interview with Reuters in December [emphasis added]:
"What I got from my parents when they passed away I gave away to charity and to my kids. And so what I’ve earned has been earned through my education, my values, living in the greatest country in the world, through some luck and through hard work," he said.
Passing your inheritance on to your children is not the same as not inheriting money at all. And it actually makes me a bit curious: a common estate-tax reduction strategy known as a dynasty trust relies on skipping generations. Did Romney pass on his inheritance to his kids for tax reasons? It's hard to know without seeing his tax returns—and that's another reason why he should release them.
At Thursday night's CNN debate, Mitt Romney attacked the Obama administration's loan guarantees for the now-bankrupt solar panel manufacturer Solyndra as a prime instance of the government picking winners and losers in business, and losing big. But Bain Capital, the private equity firm Romney founded, frequently received similar help from state governments, including subsidies and tax breaks. The subsidy-tracking folks over at Good Jobs First compiled a vast database on just how much states have bailed out companies that were bought and—in a number of cases—gutted by Bain Capital. Some of the highlights:
Sealy. A year after the 1997 buyout of this leading mattress company by Bain and other private equity firms, Sealy received $600,000 from state and local authorities in North Carolina to move its corporate offices, a research center and a manufacturing plant from Ohio (Greensboro News & Record, March 31, 1998). In 2004 Bain and its partners sold Sealy to another private equity group.
GS Industries. In 1996 American Iron Reduction LLC, a joint venture of GS Industries (which had been taken private by Bain in 1993) and Birmingham Steel, sought some $20 million in tax breaks in connection with its plan to build a plant in Louisiana’s St. James Parish (Baton Rouge Advocate, April 6, 1996). As the United Steelworkers union noted recently, GS Industries later applied for a federal loan guarantee, but before the deal could be implemented the company went bankrupt.
AMC Entertainment. After being promised more than $40 million in subsidies, this movie chain (bought in 2004 by Bain and other private equity firms) agreed to move its headquarters from downtown Kansas City, Missouri to a nearby suburb across the state line in Kansas. The deal was criticized as an egregious case of taxpayer-financed sprawl. [Even though Romney left Bain in 1999, he's continued reaping millions in lightly taxed investment income since then.]
As for the office supply store Staples, a supposed success Romney frequently touts? In 1996, the company chose to move its distribution center to Maryland in exchange for a healthy $4.2 million subsidy deal.
Romney says that President Obama's record of aiding private enterprise proves the president doesn't have a clue about how capitalism works—that, in the Obama's view, capitalism necessarily relies on the generosity of government largesse. But if we're to judge Romney's understanding of capitalism based on how he ran the show at Bain, it's tough to see how business success doesn't often rely on government help.
10:05 ET: That's a wrap folks. Read from the bottom up for all over our live-tweet coverage of the South Carolina showdown.
No game-changer in this debate. If Newt surging, it could continue. Mitt didn't screw up. Santorum was strong. Paul was Paul.
CNN's John King opened the debate by asking Gingrich about the "open marriage" allegations. Gingrich said the allegations were false but slammed King and the media in general for bringing it up in the first place. But the New York Daily News' Josh Greenman has a point:
Mr. Gingrich, do you in retrospect believe the media should not have pursued the Bill Clinton 'improprieties' when he ran for President?
As I'm walking to Newt Gingrich's meet-and-greet at a hunting ranch in Walterboro, South Carolina, a middle-aged woman explains to me why she's going to vote for the former speaker of the House on Saturday. It's quite simple, really: "Newt's salt of the earth." Salt of the earth is actually something Newt Gingrich has never been accused of being. He likes to name-drop existential writers and Enlightenment philosophers and conservative economists from the 1980s; he doesn't hunt; he doesn't farm; he doesn't get his hands dirty, except to dig up dinosaur bones in Montana.
So how does Gingrich appeal to an interest group he shouldn't, at least culturally, have anything in common with? By picking fights with their shared enemy. Before launching into his brief stump speech, Gingrich uses the occasion of speaking to sportsmen (many of them dressed in their finest camo threads) to blast "intellectual left-wing environmentalists" for believing that "humans are not part of the world." As attendees munched on barbecue and coleslaw and sipped sweet tea, Gingrich told them who they should resent, and why:
I want to make one point that I think liberals don't ever get. And I always sort of reference it when we're talking about rivers and the low-country. People who hunt and fish are among our most passionate conservationists because they're actually out in the woods and on the trails and in the streams and in the swamps. And they understand that if we don't keep areas that are healthy, there is no hunting and fishing. And so the big difference is this: the intellectual, left-wing environmentalists have a theoretical model in which humans are not part of the world.
This is very different from what Theodore Roosevelt and others began at the turn of the last century, when they wanted a conservation that was multiple-use and they wanted natural areas, but they understood they wanted natural areas so that people could join them. We've had a tremendous decline for example in forestry. And the result is our trees are sicker today, we lose more trees to fire today, Because we have more beetle infestation, because environmentalists don't understand nature. They have this idealized model that doesn't reflect the world. It's a little bit like the Disney cartoon model of Africa where the elephants and the zebras and the lions all hang out together. Now any of you who know about the real world know that if the lions and zebras hang out together after a while, there are fewer zebras and happier lions.
This gets a lot of laughs, but one thing is missing from Gingrich's rant: science. In the real world, of course, the biggest threat facing American ecosystems and endangered species isn't Agenda 21 or a lack of qualified forestry experts; it's climate change. But for Gingrich, who once joined Nancy Pelosi to urge Americans to take action on climate change, that would be an impossible argument to make. Gingrich's characterization of environmentalists favoring a world without people may also have a darker meaning. Many conservatives fear that under a UN program called Agenda 21, vast swaths of land, such as eastern Montana, will be cleared of humans entirely. Gingrich has himself mentioned Agenda 21 on the campaign trail.
More so than Romney, Santorum, or Paul, Gingrich sells himself to voters by putting the "bully" in bully pulpit. His stump speech consists largely of giving his audience the illusion that the problem with the current president is that he has substandard intelligence (Gingrich's most reliable laugh line is the concession that he'd let President Obama use a teleprompter in their never-gonna-happen Lincoln-Douglas debates). In Easley on Wednesday, he explained that the administration's decision to block the construction of the Keystone XL pipeline was "stupid" (a line he repeats in Walterboro). "It's one thing to say that a White House doesn't understand chess," he says. "It's another to say they can't understand checkers. But if they can't play tic-tac-toe…" Well, you get the picture.
That anger, and his ability to channel the same in others, explains why Gingrich's performance at Monday's debate—when he dismissed Fox News' Juan Williams' suggestion that he was playing to racial stereotypes by denigrating food stamps—has resonated so deeply. "I am so tired, personally, of racial prejudice," says Tommie Derry of Walterboro, a Gingrich supporter. "The way blacks are handling it, if you weren't racially prejudiced, it'd make you racially prejudiced" Gingrich's retort to Williams went beyond a simple debating coup; it was cathartic. "When I hear the Juans of the world, I get upset." Her son, Mark, doesn't go quite so far, but when I ask him how long he's been on Team Newt, he doesn't even have to think about it: "Since Monday."
When people talk about South Carolina Republican politics, they talk, with a good deal of proof, about "whisper campaigns." It's sort of a caricature at this point, and as some voters I've spoken with have put it, probably as much a product of the primary's timing as it is the state's character; by the time the third nominating contest has rolled around, there's a sense of urgency that leads to, well, desperate measures.
Right on cue, this is the flier that was left on my windshield at last night's Personhood USA pro-life forum in the Evangelical hub of Greenville. Its target? Rick Santorum's wife, Karen:
Photo: Tim Murphy
Here's the relevant part:
Did you know Rick Santorum's wife, Karen, had a six-year affair with an abortionist named Tom Allen?
This story is only now hitting the news. But you can see for yourself at:
This abortion doctor was 30 years her senior! In fact, he delivered her as a baby!
The only reason they broke up was that Karen wanted kids—while Tom was busy killing them.
In fact, he said, "Karen had no problem with what I did for a living," and said that Rick Santorum was "pro-choice and a humanist."
The rest of the letter focuses on the former Pennsylvania senator, concluding "He just wants to be President so badly, he'll say anything to be elected."
The susbstance of the Karen Santorum smear is, for the most part, true. It wasn't an affair, though—neither Karen nor Tom Allen were married at the time—so the hint of infidelity is false. More to the point, it's difficult to see any scenario in which this should be relevant. Does anyone seriously doubt the Santorums' anti-abortion credentials?
Two of the 11 aircraft carriers in the supposedly weak US Navy.
Mitt Romney's grand entrance at his Wednesday morning pit stop at Wofford College in Spartanburg, South Carolina goes like this: He shows up 30 minutes late, bounds on stage without signing autographs, and, after a brief introduction, directs the audience's attention to the white-haired man to his left. This man, he says, is "NASCAR legend David Pearson!" "David, you wanna say hi?" David doesn't, really, but Romney insists—"Go say hi to everybody!" and Pearson grabs the mic—"I guess I'll say hi"—and then he hands it right back off to Romney. "Those are the kinds of speeches I like!," Romney says. "Gosh, it's great to be in South Carolina. What kind of tree is that?," he says. It's a laurel oak. A few people shout from the audience, and Mitt apparently finds the answer that makes the least amount of sense and rolls with it: "It's a Mitt Romney tree. Okay!"
And we're off. Since turning their attention to South Carolina a week ago, Newt Gingrich's campaign has undergone a dramatic shift in tone, pushing a furious attack on Romney's record at Bain Capital; Rick Santorum is now taking shots at Romney's health care plan in Massachusetts for covering abortions (a job previously left to his surrogates). But if Romney's changed his tack, it's tough to see how. At Wofford, he breezes through his litany of applause lines—he won't apologize for America, etc.—and attacks President Obama for appeasing our enemies and weakening America's defenses. Then he breaks out a statistic he's used before: "Do you know how small our Navy is today? It's smaller than it has ever been since 1917!" Likewise, he adds, the Air Force has shrunk to 1947 levels.
As a service to our readers, every day we are delivering a classic moment from the political life of Newt Gingrich—until he either clinches the nomination or bows out.
Newt Gingrich had been Speaker of the House for all of six days in 1995 when he made a triumphant appearance at DC's Mayflower Hotel to give a major address entitled "From Virtuality to Reality." It was Gingrich distilled to his concentrated essence, interspersing musings on Americans' conception of speed limits, the merits of creating a federal entitlement for laptops (it would be "dumb"), the Wealth of Nations, and the works of the futurist power-couple Alvin and Heidi Toeffler. It was conservatism at its most Newt Agey: "Virtuality at the mental level is something I think you'd find in most leadership over historical periods," Gingrich told his audience.
Perhaps no leader better embodied those characteristics, Gingrich explained, than 18th-century British prime minister William Pitt, better known as "Pitt the Younger." As Newt put it:
I think equally useful is to look at the role of Pitt the Younger in the 1780s and 1790s. Because Pitt the Younger—surrounded by the disciples of Smith—rationalizes British tax policies to create the commercial environment in which so much wealth is made, the people are able to fight the Napoloeonic wars and Britain is able to carry virtually the entire financial weight of the alliance against Napoleon in a way that would have been literally impossible without Adam Smith's intellectual ideas being transmitted into the tax policies of Pitt the Younger.
Whew, long sentence. Gingrich's point was fairly straightforward, though: Pitt the Younger had the ability to look at the big picture rather than simply the task at hand; think big thoughts; and then apply those big ideas "directly to the modern world." It was a quality Gingrich considered seriously lacking in most politicians not named Newt Gingrich.
But there was another side to Pitt's reforms that Gingrich chose to downplay. Pitt paid for the Napoleonic wars by raising taxes. Specifically, he implemented the first-ever income tax—and not just any income tax, but a progressive income tax. Also, as Adam Gopnik points out, he was "probably gay."