02:59 - Source: CNN
Obama, Romney exchange jabs on economy

Story highlights

NEW: Romney: "The issue is who is going to do what it takes to put out the fire"

Romney targets Obama over the $787 billion stimulus package he signed in 2009

Republicans believe they can win Iowa, which voted for Obama in 2008

An Obama ad hits Romney over his corporate business background

CNN —  

Mitt Romney continued his blitz against President Barack Obama over the federal deficit on Tuesday, signaling a GOP shift away from social issues and back to what Republicans consider the president’s Achilles’ heel: the economy.

The presumptive GOP presidential nominee gave a speech on government spending in the battleground state of Iowa, the same day as House Speaker John Boehner cautioned of another battle brewing in Congress over the national debt ceiling.

Romney targeted the president over the $787 billion stimulus package Obama signed soon after taking office in 2009, a move Romney described as the “most careless one-time expenditure by the federal government in history.”

“We still owe the money, we’re still paying interest on it, and it’ll be that way long after this presidency ends in January,” he said.

Romney’s trip marks his first time back to Iowa since the Republican caucuses in early January, when he finished a close second to rival Rick Santorum. In terms of the economy, the state fares better than others. Its unemployment level sits at 5.2% compared to the national average of 8.2%.

While Obama carried Iowa in 2008 with 54% of the vote, the state is widely expected to be in play this fall after Republicans picked up the governor’s seat and the state house in the 2010 elections.

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Romney, however, emphasized the more than $5 trillion increase in the debt since Obama took office in 2009, and took a shot at Republicans for contributing to the problem, as well.

“A prairie fire of debt is sweeping across Iowa and our nation and every day we fail to act we feed that fire with our own lack of resolve,” he said in his speech, delivered at a hotel in Des Moines.

“This is not solely a Democratic or Republican problem. This issue here isn’t who deserves the most blame. The issue is who is going to do what it takes to put out the fire.”

After the speech, Team Obama quickly fired off on their likely opponent’s remarks. In a statement, the campaign insisted Romney has no specific plan of his own to combat the deficit.

“Mitt Romney simply wants to return to the same policies that caused the crisis and weakened the middle class: budget-busting tax cuts for the wealthiest Americans and letting Wall Street write its own rules. Loading the country up with debt while giving tax breaks to the wealthy – America can’t afford Romney Economics,” said campaign spokeswoman Lis Smith.

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Ahead of his speech, Romney’s campaign released a new web video called “23 million.” The nearly four-minute spot features three unemployed Iowans discussing their struggles as they look for work.

The Bureau of Labor Statistics estimated in its April jobs report that 12.5 million Americans were unemployed. When factoring in those who were underemployed or who had dropped out of the workforce, the number increased to 23 million.

On the other side, a super PAC supporting Obama’s re-election released a dueling television ad Tuesday morning, hitting Romney over his corporate business background as the founder of a private equity firm.

The ad shows laid-off workers from one of the companies that went bankrupt eight years after it was purchased by Bain Capital.

“He promised us the same things he’s promising the United States,” one of the former workers says in the ad. “He’ll give you the same thing he gave us: nothing. He’ll take it all.”

Meanwhile, Boehner called to mind last year’s near-shutdowns of the government Tuesday when he promised to hold firm on large spending cuts before approving a hike in the debt ceiling at the end of the year.

“When the time comes, I will again insist on my simple principle of cuts and reforms greater than the debt limit increase. This is the only avenue I see right now to force the elected leadership of this country to solve our structural fiscal imbalance,” Boehner said at the Peter G. Peterson Foundation’s 2012 Fiscal Summit.

He also singled out the president, accusing Obama of prioritizing political gain above policy.

“If the president continues to put politics before principle – or party before country, as he often accuses others of doing – our economy is going to suffer and we’ll miss our last chance to solve this crisis on our own terms,” he said.

Last year, Boehner released a similar caution, just months before Congress and the White House engaged in a bitter showdown over a deficit-reduction agreement. Racing against the clock to avoid a government default, the two parties ultimately reached a deal to extend the debt ceiling in exchange for $2.1 trillion in spending cuts.

Soon after the battle, however, Standard & Poor’s issued its first-ever downgrade of the U.S. credit rating, pointing to Washington partisanship as its reason.

Boehner’s words Tuesday foreshadow what could be a highly charged political clash at the end of the year, as lawmakers face a host of decisions involving the debt ceiling, tax extensions and spending cuts, all with a deadline set for January 1.

And he’s not the only one expecting the debt to re-emerge as a big issue this year.

Former President Bill Clinton said at the same fiscal summit Tuesday that “this budget issue should become front and center in this election.”

He warned that if leaders don’t reach a budget deal before the economy starts growing, Americans will regret it. “If we don’t deal with it, we will sooner or later … have growth come back here and interest rates will go up so fast you won’t be able to catch your breath. And then everybody will say, ‘Why didn’t we do this earlier?’”

Boehner’s comments on the debt quickly sparked an strong response from top Democrats.

Rep. Steny Hoyer, the House minority whip and the chamber’s No. 2 Democrat, said Boehner offered a “simplistic characterization” of the issue at hand.

“We are buying more than we’re paying for,” Hoyer said to reporters on Capitol Hill. “The Republicans are good at buying and lousy at paying. They borrowed a lot of money. As a result we owe a lot of money. The debt limit is about paying back that which we have already incurred.”

Meanwhile, House Minority Leader Nancy Pelosi issued a statement accusing Boehner of making “partisan demands” and charging the GOP with “once again choosing millionaires over the middle class.”

“Speaker Boehner is threatening to take our nation into another manufactured crisis that will harm America’s families,” she said.

Senate Majority Leader Harry Reid also weighed in on Boehner’s remarks, arguing that along with spending cuts, tax increases will be needed to help balance the deficit.

“There is simply no way to address the challenges facing us in a way that will support our economic recovery without using both sides of the ledger. So, of course, that means some revenues,” Reid said to reporters. “The American people agree with this.”

CNN’s Kate Bolduan, Jeanne Sahadi, Kevin Liptak and Gregory Wallace contributed to this report.