CHICAGO — Mitt Romney decried the ballooning federal debt, accusing President Obama of contributing to a mounting deficit he said stifles economic recovery and “threatens what it means to be an American.”
“America counted on President Obama to rescue the economy, tame the deficit and help create jobs,” the presumed Republican presidential nominee told supporters in Des Moines, Iowa, on Tuesday before winning primaries in Nebraska and Oregon.
Criticizing the $831 billion stimulus enacted shortly into Obama’s term and other administration actions, Romney said the president “bailed out the public sector, gave billions of your dollars to companies of his friends and added almost as much debt to the country as all the prior presidents combined.” As a consequence, “we are now enduring the most tepid recovery in modern history,” Romney said.
Romney’s concerns aren’t being echoed in financial markets, where Treasuries are rallying. Yields on the government’s benchmark 10-year notes fell to 1.77 percent from this year’s high of 2.40 percent almost two months ago, according to Bloomberg Bond Trader data. The yield is 10 basis points, or 0.1 percentage point, above the record low and the rates are about a quarter of the 50-year annual average of 6.49 percent.
With his speech in Iowa, a battleground state in the presidential race, Romney returned to the economic themes he is emphasizing after the focus shifted to Obama’s May 9 endorsement of gay marriage. Romney used a speech Saturday at an evangelical Christian university in Virginia, his last public appearance before Tuesday, to reaffirm his opposition to same-sex marriage.
If elected, Romney said he would streamline agencies and lower federal spending to 20 percent of gross domestic product, down from 24.3 percent as one way to spur economic growth.
Lis Smith, a spokeswoman for Obama’s re-election campaign, said Romney’s speech was “heavy on dishonest claims” about Obama’s record, and that the former Massachusetts governor should specify cuts he would make in federal spending.
“While President Obama has put forward a plan to reduce the national debt by more than $4 trillion over the next decade, Mitt Romney refuses to say what spending cuts or tax increases he’d make to cover the cost of giving $5 trillion in tax breaks to the wealthiest Americans,” she said.
The stop in Iowa was Romney’s first since he and his rivals in the Republican race repeatedly visited it prior to the state caucuses that kicked off the nomination contest on Jan. 3. Iowa is one of about a dozen states that Democratic and Republican strategists say are most likely to determine the outcome of November’s election.
Romney, 65, was initially declared the winner of the Iowa caucuses before a subsequent review gave a 34-vote victory to former Sen. Rick Santorum of Pennsylvania. Santorum, who emerged as Romney’s main challenger, ended his bid for the Republican nomination on April 10.
Romney easily won Tuesday’s primaries in Nebraska and Oregon, capturing more than 70 percent of the vote in each state, according to the Associated Press. When the day began, he had 973 of the 1,144 delegates needed for the nomination, according to an AP count.
In his speech, Romney mocked the federal government’s bureaucracy, saying that, if Washington had been the sole supplier of mobile phones, delays and less innovation would have marked their development.
“When they’re finally approved, the contract to make them would go to an Obama donor,” Romney said.
Romney pointed to former President Bill Clinton as a model for Obama to more closely follow.
“Almost a generation ago, Bill Clinton announced that the era of big government was over,” he said. “President Obama tucked away the Clinton doctrine in his large drawer of discarded ideas, along with transparency and bipartisanship.”
Romney added, “Maybe it was a personal beef with the Clintons.”
Obama appointed Hillary Clinton, his chief rival in the 2008 Democratic presidential race and the former president’s wife, as his secretary of state.
Comparing the nation’s debt to fire, Romney said children and grandchildren are those who will get burned the most.
“Every day that we fail to act, that fire gets closer to the homes and children we love,” he said. “I will lead us out of this debt and spending inferno.”
Romney said that if interest rates rise, the federal government’s problems will become even greater.
“The interest rate on that debt could go up like a rocket, just like an adjustable mortgage goes up,” he said. “And there’s also a good chance that this kind of debt could cause us to hit a wall like they have in Greece, Spain and Italy.”
Demand for U.S. debt has never been higher. Through last week, investors had offered $3.18 for every dollar of notes and bonds auctioned this year, the most since the government began releasing the data in 1992. China, the largest foreign U.S. creditor, increased its holdings of Treasury debt by 1.3 percent in March to $1.17 trillion, U.S. government data show.
The total federal debt is almost $15.7 trillion, up from $10.6 trillion on Jan. 20, 2009, when Obama was inaugurated, according to the Treasury Department. The annual budget deficit, and the accumulated debt, depend to a large degree on policy choices and developments in the broader economy that aren’t immediately affected by political change in Washington.
The Obama administration also has pointed to Republican- backed tax cuts in 2001 and 2003, which are still in effect, and continuing wars in Iraq and Afghanistan as policies from the Bush administration that helped increase deficits.
The campaign for Iowa’s electoral votes will play out in a state with a better economic environment than the national picture. The state’s jobless rate in March was 5.2 percent, below the current national average of 8.1 percent and down from 6.3 percent in November 2010.
With assistance from Bob Drummond in Washington and Rocky Swift in Tokyo.