Bloomberg News

Senator Graham Says Reid Is ‘Lying’ About Romney Taxes

August 06, 2012

Senator Lindsey Graham

Sen. Lindsey Graham, Republican from South Carolina. Photographer: Chip Somodevilla/Getty Images

Republicans, including Senator Lindsey Graham, accused Senate Majority Leader Harry Reid of lying by saying Mitt Romney hasn’t paid taxes for 10 years.

Graham said Reid was “making things up,” and Republican National Committee Chairman Reince Priebus called Reid a “dirty liar” for leveling the accusations against Romney, the presumptive Republican presidential nominee.

“I just cannot believe that the majority leader of the United States would take the floor twice, make accusations that are absolutely unfounded in my view and, quite frankly, making things up to divert the campaign away from the real issues,” Graham, a South Carolina Republican, said yesterday on CNN’s “State of the Union.”

Republicans and Democrats spent much of the Sunday talk shows sparring over Reid’s claims about Romney’s taxes -- accusations the former Massachusetts governor has denied. Democratic President Barack Obama’s advisers and supporters have pressed Romney to release his tax returns in the wake of Reid’s claims. Romney, who has released one year of personal income tax returns and has promised a second, has challenged Reid to “put up or shut up” and reveal his source for the claim.

Reid, a Nevada Democrat, made the allegations in a Senate floor speech last week. His office repeated the claim in an e- mailed statement yesterday.

Credible Source

The e-mail, from Reid spokesman Adam Jentleson, said the information comes from “an extremely credible source” and called it “sad” that Republicans were being forced to defend Romney’s decision not to release more tax returns.

Romney has released one year of personal income tax returns, from 2010, showing that he paid an effective tax rate of 13.9 percent on investment income that year. He has promised to release his 2011 returns when accountants are finished with them, and has rejected calls by Democrats and some within his own party to disclose more of his tax returns.

Republican Priebus on ABC’s “This Week” said he wouldn’t respond to a “dirty liar who hasn’t filed a single page of tax returns himself.”

David Axelrod, an Obama campaign strategist, said on “Fox News Sunday” that he didn’t “know who Harry was talking to.” Romney “can resolve this in 10 seconds,” Axelrod said. “Why don’t they just put this to rest? What is it he’s hiding?”

Reckless and Slanderous

Virginia Governor Bob McDonnell, a Republican, said on CBS’s “Face the Nation” that Reid had made a “reckless and slanderous charge.”

“People don’t care about Mitt Romney’s tax returns,” McDonnell said. “They care about their own tax returns.”

Former Pennsylvania Governor Ed Rendell, a Democrat, said on “Face the Nation” that, while voters want to know whether presidential candidates “pay their taxes fairly like everybody else,” Romney’s tax returns are “not a central issue” in a campaign that has focused on the economy.

Romney, in an interview broadcast on CNN’s “State of the Union,” attacked the Obama’s administration’s economic record and said that it is time “for something dramatic and it is not the time to grow government.”

“It’s the time to create the incentives and the opportunities for entrepreneurs and businesses big and small to hire more people and that’s going to happen,” Romney said. “You’re going to see that happen in this country but not under this president.”

Federal Reserve

Romney said the Federal Reserve should refrain from a third round of large-scale asset purchases aimed at boosting the economy. While the first round of bond buying by the U.S. central bank may have had a positive effect, a new round of quantitative easing won’t help the economy, Romney said.

“I am sure the Fed is watching and will try to encourage the economy,” Romney said in the CNN interview. “But I don’t think a massive new QE3 will help the economy.”

The Fed last week moved a step closer to pumping more stimulus into an economy plagued by weakening growth and a jobless rate that has stayed at 8 percent or higher for more than three years. The Federal Open Market Committee on Aug. 1 said it will “closely monitor” economic data and financial developments, suggesting it is focused on the economy’s near- term performance.

The Fed has fought the financial crisis with two rounds of quantitative easing. In the first round starting in 2008, the Fed bought $1.25 trillion of mortgage-backed securities, $175 billion of federal agency debt and $300 billion of Treasuries. In the second round, announced in November 2010, the Fed bought $600 billion of Treasuries.

Economic Doldrums

The economy remains in the doldrums. The government said Aug. 3 that employers added 163,000 jobs in July, more than forecast. The jobless rate, based on a separate survey of households, increased by about four hundredths of a percentage point to 8.3 percent, a five-month high, according to the Labor Department.

Obama and Romney both tried to turn the jobs report to their advantage. Romney called the unemployment figure “another hammer blow to the struggling middle-class families of America” in an Aug. 3 speech in North Las Vegas, Nevada. Alan Krueger, the chairman of Obama’s Council of Economic Advisers, said Aug. 3 that the report “provides further evidence that the U.S. economy is continuing to recover from the worst downturn since the Great Depression.”

The economy has added private-sector jobs for 29 straight months, he said, a total of 4.5 million positions. He noted in a blog post on the White House website that the unemployment rate rose only because of rounding; the actual change was from 8.217 percent to 8.254 percent.

Blaming Bush

David Axelrod, an Obama campaign strategist, blamed the country’s lingering economic woes on former President George W. Bush’s administration. Axelrod said the U.S. economy lost six million jobs in the six months before Obama took office in January 2009.

“You’d have to go back to Great Depression to see a crisis like the one we walked into in 2009,” Axelrod said on “Fox News Sunday.”

Axelrod said Romney’s tax plan would increase taxes by an average of $2,000 on middle class families.

“Do we think that raising taxes by $2,000 on the middle class is the way to get the economy moving?” Axelrod said.

A study released by the Brookings Institution in Washington this week said Romney’s plan would shift some burden from those with incomes exceeding $200,000 a year to those earning less.

The Romney campaign has pushed back against the study, saying it doesn’t fully analyze portions of his tax proposal and ignores others. Priebus, the Republican National Committee chairman, said the study doesn’t take into account all of the factors included in Romney’s plan.

“The growth rate that will come out of Mitt Romney’s plan, of reducing taxes on small businesses, reducing taxes on individuals and cutting spending in Washington, that, together, creates growth, will increase individual income rates and jobs and get America moving again,” Priebus said on ABC’s “This Week” when asked about the study.

To contact the reporters on this story: Phil Mattingly in Washington at pmattingly@bloomberg.net; Greg Stohr in Washington at gstohr@bloomberg.net.

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net


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