This is a rush transcript from "Special Report," July 17, 2012. This copy may not be in its final form and may be updated.
(BEGIN VIDEO CLIP)
MITT ROMNEY, R-PRESIDENTIAL CANDIDATE: He said this, "If you've got a business, you didn't build that. Somebody else made that happen."
ROMNEY: The idea to say that Steve Jobs didn't build Apple, that Henry Ford didn't build Ford Motor, that Papa John didn't build Papa John Pizza, that Ray Crock didn't build McDonald's, that Bill Gates didn't build Microsoft, you go on the list, that Joe and his colleagues didn't build the enterprise -- to say something that is not just foolishness, it's insulting to every entrepreneur and every innovator in America. And it's wrong.
(END VIDEO CLIP)
BRET BAIER, HOST: Mitt Romney on the offensive today speaking out about something President Obama said in Virginia on the stump that's raised a lot of eyebrows, especially in conservative circles. The president saying -- he defended the remark today, saying, "We as a nation do things better together and we rise and fall as one nation."
We'll start there tonight with the politics. Let's bring in our panel, Steve Hayes, senior writer for The Weekly Standard. We welcome Ben Feller, White House correspondent for the Associated Press, and syndicated columnist Charles Krauthammer.
OK, Ben, what is your assessment of the back and forth and how has it been playing? Today clearly Mitt Romney seemed energized on the stump on this one point.
BEN FELLER, ASSOCIATED PRESS: Yes, well, the governor was fired up and fired up. He's trying to get back on message. This may shock you, but there was some license being taken with exactly what was said. Governor Romney pulled out the part of the quote that said if you built something that's wasn't you. The full context of the president's comments earlier in Roanoke were actually a little bit broader than that. He said we have a government that has a system set up to thrive for individuals. People build roads. Teachers are in school. That's a government responsibility. It wasn't just you on your own.
The focus of Governor Romney is to say we need a government and we need a president who understands that private business is at the core. And every time he shifts the focus to that, it puts the onus back on President Obama to talk about how he is the one in charge of the sluggish job growth.
What we saw today in Governor Romney was some way to get off of the campaign of the last week, the Bain discrepancies of when he left. Is he or is he not going to release more years of tax returns? He did seem more energized and I think he was on message on that.
STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: I actually agree with Ben. I think the context of what the president said, when he said if you didn't build it, he was referring to, his previous sentence was about roads. I'm not sure the president deserves the benefit of the doubt the way they have been characterizing Mitt Romney and Bain, but he probably meant roads.
My contention though is that if you look at the longer context, it doesn't help the president. In fact, it makes it in some ways worse because he is arguing in effect that business can't get by on his own. His longer rant, if you will, suggests that businesses, suggesting what Mitt Romney is saying in the comment he may be taking out of context.
I think Romney was smart to get beyond this and say the reason the president is so obsessed with Bain is because he doesn't understand the way business works. There are examples he can give. He can talk about President Obama in Iowa saying when he was asked about why small businesses aren't hiring and as a result of ObamaCare, saying, no, no, no, that just isn't the case. There are plenty of examples that Mitt Romney can give and he started to give them today.
BAIER: Charles, this back and forth about how many tax returns he will put out -- he says he's going to put out two. One when the accountants are finished with 2011. He did provide more than 20 of them to John McCain as he was being vetted for a possible VP pick with John McCain. Senator McCain responded today to reporters asking questions about those very tax return that he saw.
(BEGIN AUDIO CLIP)
SEN. JOHN MCCAIN, R-ARIZ.: There was nothing disqualifying in his tax returns. And that is a fact. And again, please add to somehow intimate that without any basis in fact is the sleaze campaign that this Obama campaign is running and it is disgraceful. They can't talk about the economy so they have to make personal attack against a good and decent man.
(END AUDIO CLIP)
BAIER: The follow-up question obviously, Charles, is if there is nothing in the 20-plus, why put out two?
CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Because once you do it, it never stops, and you concede the premise to the opposition that he is hiding something. Give them three years, they want six. If you give them six, they want 10. I believe in the honor of John McCain. He looked at them and says they were OK. That's enough for me. Two years is enough.
And this is playing in to the Obama strategy. I disagree that Romney talking about what Obama said in Virginia about private enterprise being ultimately rooted in government, is somehow a distraction in a way to change the subject. Tax returns and Bain are a distraction. The real issue of the campaign is precisely what Obama said. That's precisely at the center of the division between left and right, between Republican and Democratic. How do you see the free enterprise and capitalism in American society? Obama said clearly that it's rooted in -- it's success is the result of government, infrastructure.
And the worst part about it is he says it's because we're all in this together, it's society that ultimately supports you. Yes, society. But Obama always identifies society with collective action with government. In fact, society is civil society. It's the family. It's the church. It's the little platoons that were talked about (INAUDIBLE) about how Americans organize themselves in organizations that are voluntary. That society is what sustains us, not government.
And this emphasis on government and it's at the root of all good in America, is what is wrong with the Obama vision. And that is what Romney ought to attack. That is what the campaign ought to be about.
BAIER: Ben, yesterday, the president cited a report from someone who supports the president, in The Economist, saying that 800,000 jobs will be sent overseas by Mitt Romney's tax proposals. Today the independent research organization Ernst and Young came out with its own report, and it essentially said increasing taxes on families making more than $250,000 a year would cost hundreds of thousands of jobs. There you see all of the bullet points, GDP down, employment falls. Here's the quote, "This report finds that these higher marginal tax rate result in smaller economy, fewer jobs, less investment, lower wages, specifically finds that higher tax rate have significant adverse economic effects in the long run, lowering output, employment, investment, capital stocks, real after-tax wages when the resulting revenue is used to finance additional government spending."
So I guess it's the battle of reports. We always talk, everybody can point to a study. How do you think this plays, and the real facts in this debate play out on the trail?
FELLER: I think you hit it there that each side will continue to pick the report they want. It comes up in a news cycle and the next one and next one.
It's interesting to see how far we get away from the prime debate that Charles raised about what is the role of government and how do we create jobs in America? So the tax returns and everything else are sort of points beneath that.
And I think the Obama campaign, the president thinks this issue is a winner, right? The study you raised they would probably find a lot of fault with. The one yesterday Governor Romney had issues with in terms of how it was put together and who put it together. But the underlying point that President Obama is not going to stray from is that taxes must go up for the wealthy Americans. He's not going to stray from that. He thinks it's a winning point up through the election.
BAIER: Steve, Ernst and Young is a little different in that it's nonpartisan, but he is right. The studies will keep --
HAYES: That's exactly right. You will have people with competing studies. I do think Ernst and Young have some credibility. They have a track record on these issues.
But I think this needs to be the second argument that Mitt Romney makes. It can't just be President Obama is clueless about the economy. He needs to say that the president when he understands the economy, as he has in the past, he suggested that raising taxes in time of economic downturn would be bad for the economy, would do damage to the economy. He said it at least twice.
I think Mitt Romney needs to say when he shows an understanding of the economy he is willing to underplay that so he can advance his own political interests. There has to be a second punch if you're the Romney campaign.
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