GOP White House Candidates Find Comfort at Tax, Spending Forum

WASHINGTON – Republican presidential contenders on Friday scolded Congress for extravagant spending of taxpayer dollars, and Rudy Giuliani blamed the issue for GOP losses in last year's elections.

"We lost control of Congress because we were just like the Democrats as far as spending is concerned — shame on us," Giuliani told the anti-tax group Americans for Prosperity.

But the former New York mayor spent most of his 25-minute speech ridiculing Hillary Rodham Clinton and other Democratic candidates, saying, "Republicans are amateur spenders, and Democrats are professional spenders."

Fred Thompson made a joke of lawmakers' free-spending ways, saying that as a senator from Tennessee, he once "accidentally spent some of my own money." Former Massachusetts Gov. Mitt Romney promised in prepared remarks to veto any spending above inflation minus one percent.

Giuliani drew applause dozens of times as he described how he cut income and business taxes, slashed welfare rolls and trimmed employees from his city's payroll as mayor of New York. His record on taxes is an advantage for Giuliani, who is at odds with social conservatives who typically hold sway over Republican primary elections.

Yet Romney has argued Giuliani is vulnerable on the issue because the former mayor fought to eliminate a line-item veto, which a president can use to reject spending, and because Giuliani maintained a commuter tax in New York.

"While I was governor, I used the line item veto more than 844 times," Romney said in a speech planned for Friday night. "I know how to veto. It's familiar to me. I even miss it sometimes."

At the presidential level, the line-item veto was short lived. Congress passed it in 1996, President Clinton used it in 1997, and the Supreme Court struck it down as unconstitutional in 1998.

One of Clinton's line-item vetoes kept New York from raising taxes on hospitals. Giuliani filed a lawsuit resulting in the high court's ruling.

The issue has sparked pointed exchanges, as Giuliani's campaign responded that Romney offered no tax cuts during his four years as Massachusetts governor and allowed taxation on out-of-state residents working in Massachusetts, of vacation pay, deferred compensation and other income. A Giuliani campaign release referred to "Romney's Taxachusetts."

Other GOP hopefuls — former Arkansas Gov. Mike Huckabee, Kansas Sen. Sam Brownback and Texas Rep. Ron Paul — also addressed the group. Brownback argued for fixing Social Security with private savings accounts, saying, "if the money is in personal accounts, the government can't spend it."

Giuliani, who leads the GOP presidential field in most national polls, drew hoots and cheers when he described Clinton's idea of giving a $5,000 savings bond to every U.S.-born baby. He had a friendly audience; members' name tags bore Ronald Reagan's picture.

Giuliani said the price tag would be more than $20 billion and joked about the cost of printing bonds with Clinton's picture on them.

"This costs money — it doesn't come from trees; it doesn't come from heaven," Giuliani said.

Clinton and top tier Democratic rivals Barack Obama and John Edwards would pay for their more costly proposals by repealing tax cuts.

Giuliani argued for indexing the alternative minimum tax to inflation and repealing the estate tax, saying the tax reductions would actually generate tax revenues and not cost money because they would stimulate the economy.

By the time he left office as mayor, Giuliani said, "we were collecting 41 percent more revenue from the low taxes than we were collecting from high taxes."

Thompson said that approach works: "When you have tax cuts, revenue isn't lost. The taxpayer knows where it is; it's in his pocket."