Romney, Giuliani spar over budgets

DEARBORN, Mich. - Former Massachusetts governor Mitt Romney and former New York City mayor Rudy Giuliani tangled over their records on managing budgets in a debate yesterday among Republican presidential candidates as each tried to undermine the other's claim to the GOP's heritage of fiscal conservatism.

Former Tennessee senator Fred Thompson commanded center stage in his first debate appearance, but during the liveliest moments he was stuck idling between Romney and Giuliani, who continued a weeklong spat with a dizzying exchange of numbers comparing their balance sheets while in office.

Romney called Giuliani's assertions that Romney had increased spending "baloney," and told him to "check your facts." Romney tried to shift the focus to what he said were Giuliani's efforts to increase taxes in New York City, including one imposed on the income of suburban commuters.

They swapped their strongest words over the may or's successful lawsuit challenging the Clinton administration's use of the line-item veto. Romney said he believed that presidential power was not only constitutional, but also necessary to control government spending.

"You have to be honest with people," Giuliani responded to his rival. "And you can't fool all of the people all of the time. The line-item veto is unconstitutional. You don't get to 'believe' about it; the Supreme Court has ruled on it."

The debate, hosted by CNBC, The Wall Street Journal, and the Michigan Republican Party, was designed to focus on economic issues, and the top contenders appeared to find consensus on major policy matters. They alternated in delivering largely undifferentiated paeans to low taxes, free trade, restrained government spending, and the power of the free market.

The debate was held in Dearborn, a Detroit suburb that has stood at the intersection of the major currents in Bush-era foreign and domestic policy. It was in the streets of the country's largest Arab-American enclave that Iraqi refugees celebrated the fall of Saddam Hussein's government in the spring of 2003, and at the headquarters of Ford Motor Co. that the effects of global trade on American manufacturing have been most acutely felt.

In an interview before the debate, Saul Azunis, Michigan Republican Party chairman, was pessimistic about his state's future, citing a six-year job-loss streak and foreclosure rates among the country's highest. "Michigan is all about the economy," he said. "The jobs issue is really affecting us."

Yet, the candidates remained largely cheerful about the nature of the American economy, as they attempted to divorce local fortunes from national ones. The leading candidates stood by the Bush administration's policies on taxes and trade, blaming state government for the area's troubles. Romney quipped that he feared that Michigan's Democratic governor, Jennifer Granholm, "was going to put a tax on this debate."

Nearly all the candidates at some point criticized members of their own party for a growing federal budget. Senator John McCain of Arizona called on the president to hold his ground against a number of spending bills, including a proposed expansion of a program providing health insurance for children from low-income families funded by a tax on tobacco.

"By the way, a dollar-a-pack increase for cigarettes?" said McCain, a leader on efforts in the mid-1990s to regulate the tobacco industry. "So we want to take care of children's health and we want everybody to smoke? I don't get it."

Dissent from Bush economic policy came almost exclusively from the candidates lagging in the polls, who took issue with mostfavored nation status for China (Representative Duncan Hunter of California), presidential "fast-track" authority for trade negotiations (Representative Tom Tancredo of Colorado), and the country's historical departure from the gold standard (Representative Ron Paul of Texas).

One of the major differences was in the area of taxation, where the major contenders argued that current rates should be lower, while the second-tier candidates proposed abolishing the income-tax system altogether. Senator Sam Brownback of Kansas suggested a flat tax, and former Arkansas governor Mike Huckabee and Hunter argued for the national consumption levy they call a "fair tax."

Thompson stood in the middle of the candidates in his first debate among them, having skipped the last full gathering to announce his candidacy alongside Jay Leno. Even if Thompson's appearance - after a month of campaigning by the former actor that was widely perceived as lackluster - was the subject of most advance media coverage, he did not seem to draw the attention of his rivals.

Thompson stood hunched, as though bending to keep within the television frame, and coughed and sniffled occasionally. (He was recently sick, spokesman Todd Harris said afterward.) Thompson seemed to deny critics of his campaign style any egregious missteps, although his meandering and often vague answers did little to stand out among rivals who agreed with him on major issues.

When pressed for specifics on how he would limit entitlement costs, Thompson proposed indexing Social Security benefits to increases in wages, not prices, before veering off and offering a self-contradictory recipe for fiscal balance. "That means less spending on the discretionary side," he said. "Our bridges and our infrastructure and things of that nature, our national parks, have got to be taken care of."

The encounter occurred during a week of engagement between Giuliani and Romney, who both governed as moderates on social issues but have been trying to use their executive experiences to claim standing as fiscal conservatives. In recent days Romney has not been bashful about criticizing Giuliani about his mayoral record on taxes and spending, but the former mayor had until now left the job of pushing back to surrogates.

When they weren't sparring with each other, Giuliani and Romney appeared to share a common strategy: emphasize their optimistic worldviews and focus their attention on Senator Hillary Clinton of New York. In that regard, Giuliani may have performed the night's deftest jujitsu, taking one of Romney's fiercest attacks on his fiscal conservatism and turning it into a generalelection rallying cry.

"Mayor Giuliani took the line-item veto that the president had all the way to the Supreme Court and took it away from the president of the United States," Romney said. "I think that was a mistake."

"I took President Clinton to court and I beat him," Giuliani said. "And I don't think it's a bad idea to have a Republican presidential candidate who actually has beat President Clinton at something."