President Barack Obama speaks in the East Room of the White House in Washington, Monday, July 9, 2012. Facing sagging jobs numbers, President Barack Obama seeks to recast the election as a debate over tax fairness, calling for a temporary tax cut extension but just for low and middle income earners. The president�s pitch is aimed at painting Mitt Romney as a protector of the rich while ramping up questions about the Republican challenger�s own wealth. (AP Photo/Susan Walsh)
WASHINGTON (AP) — President Barack Obama and Republican rival Mitt Romney are clashing in a reinvigorated election-year debate over tax fairness, with both sides claiming their position is best for a struggling middle class.
Romney challenged Obama's call for a one-year extension of tax cuts limited to households earning less than $250,000, saying the U.S. needed to restore economic freedom for everyone.
"To restore economic freedom we have to have taxes that are competitive with other nations," Romney told radio host Michael Medved on Monday.
Romney has pushed for an extension of all the cuts signed into law by President George W. Bush. The across-the-board cuts will expire at the end of the year unless Congress acts.
A day after the president sought to elevate the tax debate as a key election-year issue, Obama was to make his tax pitch in Iowa, the state that launched his presidential bid in 2008. He faces a tough contest there against Romney this fall.
The White House and Obama's campaign want to use the tax debate to portray congressional Republicans as obstructionists and Romney as a defender of the wealthy who is willing to push an across-the-board extension of the tax breaks at the expense of those earning more modest incomes.
"Let's not hold the vast majority of Americans and our entire economy hostage while we debate the merits of another tax cut for the wealthy," Obama said Monday at the White House.
Obama threatened to veto a full extension of the Bush tax cuts, saying in an interview with WWL-TV in New Orleans on Monday that a tax cut for the wealthiest 2 percent of Americans would cost $1 trillion over the next decade at a time when the nation needs to reduce the federal deficit.
On Tuesday, the Obama campaign reiterated calls for Romney to release more of his tax returns. In a video posted on YouTube, the campaign asks: "How long can Romney keep information on his investments in overseas tax havens secret? And why did he do it in the first place?"
Emphasizing the consequences to families, Obama was meeting Tuesday with an Iowa couple that the White House said would benefit from his tax plan. He was then holding a campaign event at a Cedar Rapids community college where he planned to make the case for the extension for those earning $250,000 or less.
Obama was making another visit to a battleground state with a more positive economic outlook than other parts of the nation. Iowa's strong farm economy has pushed the state's unemployment rate down to 5.1 percent, well below the national average of 8.2 percent. Obama took a bus tour through parts of Ohio and Pennsylvania last week — both states have more positive jobless rates than the rest of the nation — and was campaigning in Virginia on Friday and Saturday. Virginia's unemployment rate is 5.5 percent.
Yet polls in Iowa have shown Obama locked in a tight race with Romney for the state's six electoral votes, a potential warning sign after Obama triumphed in Iowa's leadoff caucuses in 2008 and then captured the state in the general election.
Senior campaign adviser David Plouffe said Tuesday the Obama campaign wants to focus its appeal on battleground states "to educate voters about what the choice is" in 2012.
Plouffe said in an interview on ABC's "Good Morning America" that the Obama camp is concerned about the role of super PACs in bankrolling Romney's challenge, charging that they want to "buy the White House" for the former Massachusetts governor.
"Money matters in politics," he said.
Many voters have expressed wariness about Obama's handling of the economy, his plans to reduce the federal debt and his ability to cure Washington gridlock. An NBC News/Marist poll in Iowa released in late May gave Romney a slight edge (46 percent to 41 percent) on who would best handle the economy — but when asked who would do a better job of reducing the national debt, voters gave Romney a solid advantage over Obama (52 percent to 34 percent).
"The president's got his work cut out for him here. It's not one to be marked over into his column by any stretch of the imagination," said Rob Tully, a former Iowa state party chairman. "But this state could easily go back into the president's column if there's commonsense decisions made between now and November."
Republicans were countering Obama on multiple fronts. Ahead of Obama's visit, Iowa Gov. Terry Branstad, a Republican, called the president's tax plan another attempt to "divide people one against another based on class warfare. The very people we need to invest and create jobs are afraid to because they're afraid their taxes are going up."
Reince Priebus, the chairman of the Republican National Committee, was shadowing Obama in Cedar Rapids with a news conference where he planned to accuse the president of wasting taxpayer money on stimulus programs that he said created jobs overseas. It aimed to rebut criticism from Democrats that Romney's former private equity firm did business with companies that shifted jobs to lower-wage countries to cut costs.
Romney was holding fundraisers in Colorado and planned to discuss energy policies on Tuesday in Grand Junction, Colo., an oil town in the western part of the state. The former Massachusetts governor held a closed-door fundraiser Monday night in Aspen, where between 300 and 400 guests gave about $2.4 million, according to the campaign.
Guests in Ferraris, Bentleys and Porsches drove down a private gravel road past a horse ranch to valet park outside the sprawling stone private home. Romney's staff set up speakers blaring music outside of the tent set up in the backyard, noise that prevented reporters on the public sidewalk outside from hearing any of Romney's remarks.
Romney's event in Grand Junction carried some symbolic meaning. It was the site of an August 2009 Obama rally where he focused on selling his national health care plan to the American people.
Hunt reported from Aspen, Colo. Associated Press writer Thomas Beaumont contributed from Des Moines, Iowa.
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