Democrats offer Romney a deal on tax returns

Economic issues and the hot-button issue of the future of Medicare continued to dominate on the U.S. presidential campaign trail on Friday.

Campaign spokesman scorns Obama team's letter

Mitt Romney illustrates his criticism of President Barack Obama's Affordable Healthcare for America Act, during a news conference in Greer, S.C., on Thursday. (Evan Vucci/Associated Press)

Economic issues and the hot-button issue of the future of Medicare continued to dominate on the U.S. presidential campaign trail on Friday.

In a bid to maintain pressure on Republican hopeful Mitt Romney, the head of President Barack Obama's campaign team offered his counterpart a deal: Release five years' worth of tax returns and Democrats would stop asking for 10. Jim Messina said he wrote the letter containing the offer, which was also sent to media outlets, because Romney "apparently fears the more he offers, the more our campaign will demand that he provide."

"It is clear that President Obama wants nothing more than to talk about Gov. Romney's tax returns instead of the issues that matter to voters," Matt Rhoades, Romney's campaign manager, responded.

Cash call

It appears Mitt Romney's campaign team has decided fundraising in non-competitive states is more valuable than another quick visit to the10 so-called swing states seen as crucial to a successful campaign, observers say.

Romney has outdistanced President Barack Obama on that front for months. His campaign reported raising more than $101 million US along with the Republican National Committee in July. The president's campaign and Democratic National Committee raised $75 million in that time.

Romney's money advantage is expanded by technically independent groups flooding airwaves with ads criticizing the president. Two super PACS — Restore Our Future and American Crossroads — have raised more than $122 million since the beginning of last year, while. Democratic-leaning groups Priorities USA Action and American Bridge 21st Century have raised about $30 million.

On Wednesday, an event in Charlotte, N.C., netted Romney about $1.5 million. That night, a gathering at a swank club overlooking Birmingham, Ala., generated more than $2 million. A midday event Thursday in Greenville produced $1.7 million, and Romney held other fundraisers Thursday night in Boston. He has scheduled similar events this weekend and for much of next week.

Separately, a Democratic super PAC supporting Obama released a new ad Friday arguing that Romney would only pay one per cent in taxes under the budget plan devised by Ryan and backed by Republicans in the House of Representatives. The ad's tag line says: "Romney and Ryan. If they win, the middle class loses." It was airing in the so-called swing states of Colorado, Florida, Ohio, Iowa, Pennsylvania and Virginia.

Tight race

Romney, a multimillionaire, has been under pressure to show how much he pays in taxes as economic issues — and the growing gap in the United States between the rich and poor — dominate a tight race toward the November election.

Releasing several years of tax returns has become a standard in recent presidential elections — a practice that dates back to Romney's father George's run for the Republican presidential nomination in 1968 —  but Romney has said his critics would distort the data and use it against him. He said he is following the example of Republican Senator John McCain, who released two years' worth of returns in 2008 when running against Obama.

Romney released his 2010 taxes and has said he plans to release his 2011 returns when they are ready. Obama's campaign has questioned whether there are years when Romney paid no taxes. On Thursday Romney told reporters he has paid at least 13 per cent of his income in federal taxes every year for the past decade.

"I think the most recent year is 13.6 or something like that. So I paid taxes every single year," Romney said. Aides later said Romney meant to say 13.9 per cent, the amount he already disclosed for his 2010 federal return.

Romney is able to keep his tax rate low on his 2010 and 2011 income — about $21 million US — because most it came from investments, which are taxed at a lower rate than wages. That type of legal tax figuring is something Obama has proposed changing.

Republican vice presidential candidate Paul Ryan steered clear of talking about his Medicare plan during campaigning in North Carolina on Thursday. (Phil Long/Associated Press)
A Pew Research Centre poll released last month showed 44 per cent of Americans believe raising taxes on the wealthiest would help the economy, not hurt it. Just 22 per cent believe the opposite. The same poll showed that Americans believe 2-to-1 that Obama's tax proposals would make the tax system more fair, not less.

Elsewhere,  Ryan told a cheering crowd in Virginia that he is fond of hunting and fishing in the state.

Both campaigns see Virginia as a bellwether: Obama won the state in 2008, the first Democrat since Lyndon B. Johnson to gain victory there. The battle is for an estimated six to eight per cent of undecided voters who likely control the outcome of the vote.

"This is a state that has it all, and this is a state that will determine it all," Ryan said in Glen Allen, outside Richmond.

Mum on Medicare

He made no mention of Medicare, the issue that has dominated debate much of the week, driven in part by Ryan's controversial blueprint for overhauling the program.

However, the Obama campaign took dead aim at the issue in a new ad in which the Affordable Healthcare for America Act, which the Republicans derisively call "Obamacare," is backed by the AARP, an organization that represents senior citizens. In a letter to lawmakers earlier this year, the group said Ryan's plan to transform Medicare into a voucher-like system would lead to higher costs for seniors, though the exact amount is in dispute.

Romney and Ryan have criticized Obama who they has taken more than $700 billion in Medicare funds to help pay for the new health-care law. The Romney campaign on Friday disputed the new ad, and repeated its claim that Obama's plans would siphon spending from Medicare without safeguarding the program's long-term stability.

The Obama campaign says the $700-billion reduction over 10 years comes out of the pockets of insurers, not the program's users, and that those savings will be used to cover new users and close the so-called "doughnut hole" —  the gap between traditional and catastrophic coverage in prescription drug benefit coverage.

They also point out Ryan embraced those cuts in his own 2011 and 2012 budget blueprints. Following Romney, he now pledges to restore the estimated $716 billion in 10-year cuts to provider reimbursements.

"It gets a little wonky but it was already in the baseline," Ryan told reporters on Thursday when asked about the contradiction. "We would never have done it in the first place. We voted to repeal the whole bill. I just don’t think the president’s going to be able to get out of the fact that he took $716 billion from Medicare to pay for Obamacare."

With files from The Associated PRess