Breaking News

China September PMI Edges Economists Estimates
Tweet TWEET

Obama Rallies Base in Iowa With Attack on Romney Record

President Barack Obama accused Mitt Romney of trying to return to policies that crippled the U.S. economy as he renewed an appeal from his 2008 campaign for the nation to “come together around a common purpose.”

Addressing a cheering rally at the Iowa State Fairgrounds in Des Moines last night, Obama delivered his sharpest attack to date against his presumed Republican opponent in the November election as both campaigns anticipate a tight race. Iowa is a swing state that both campaigns are targeting.

The president mocked Romney, who said during a May 15 visit to Des Moines that Obama’s failure to rein in federal spending is causing “a prairie fire of debt.” That is a “cow pie of distortion,” Obama said, drawing upon his own homespun metaphor.

Republican policies would add trillions to the debt, the president said. That’s like trying to “put out a prairie fire with gasoline,” he said. “We’re going forward. We’re not going to double down on the same bad ideas.”

Obama said he has signed $2 trillion of spending cuts into law, adding that he will ask the wealthy to pay more to help lower the debt.

With the economy and unemployment the top issues in the race, Obama has sought to use Romney’s background in business against him by portraying the former Massachusetts governor as favoring the wealthy over middle-income Americans.

Attacking Free Enterprise

Romney has countered by accusing Obama of attacking free enterprise and not understanding how the economy works. He has said in speeches and interviews that Obama is “not up to the task” of guiding the economy.

For all the concern in Washington that the nation is piling on too much borrowing as the deficit exceeds $1 trillion for a fourth straight year, investors are showing sustained demand for its bonds.

The Treasury sold notes yesterday at a record-low auction yield for a second consecutive day as Europe’s debt crisis underscored the status of U.S. government debt as the preferred refuge. The $29 billion seven-year note sale drew a yield of 1.203 percent, compared with the previous record of 1.347 percent at the April 26 auction.

Yields on 10-year Treasuries, which are benchmarks for everything from mortgages to corporate bonds, climbed four basis points to 1.78 percent. The average yield over the past 20 years is 4.93 percent.

Federal Debt

Republicans have been focusing on the federal debt amid signs the U.S. economy is gaining strength. Home sales, housing starts and industrial production exceeded forecasts in April, bolstering optimism that the world’s largest economy can withstand fallout from the turmoil in Europe. Applications for jobless benefits decreased by 2,000 to 370,000 in the week ended May 19 from a revised 372,000 the prior week, according to the Labor Department.

Obama has been seeking to portray Romney as out of touch with the concerns of most Americans.

The president’s re-election campaign distributed a video yesterday ridiculing Romney for the statement he made as he was being heckled by anti-Wall Street audience members during a speech at the fairgrounds Aug. 11.

“Corporations are people, my friend,” Romney said. “Everything corporations earn ultimately goes to people.”

Steel Plant Closing

Obama’s campaign also is running an ad that highlights the closing of a Missouri steel plant that was bought in 1993 by Bain Capital LLC, the private-equity firm Romney co-founded.

The ad has been criticized by some Obama allies, including Mayor Cory Booker of Newark, New Jersey, and Steven Rattner, who headed the president’s auto task force. Rattner last week called it “unfair.”

Romney has dismissed criticism of his business background.

“I’m pretty confident that the overall record of the enterprise I helped begin is one that’s pretty solid,” he said yesterday in an interview on the Fox News Channel. Obama “doesn’t understand how the free economy works.”

Romney’s main message is a promise that he will deliver stronger job growth. In a recent interview with Time Magazine, he pledged to lower the unemployment rate to 6 percent by the end of his first term.

Last night, for the second time this week, Obama responded by chiding Romney for saying his background in business gives him a better grasp of how to get the economy growing. Obama said Romney concentrated on making money for investors while the president has to be concerned with workers as well.

A President’s Job

“There may be value for that kind of experience, but it’s not in the White House,” Obama said.

The president has stressed economic progress since he took office in the aftermath of the financial crisis spurred by the collapse of Lehman Brothers Holdings Inc. in September 2008.

While the jobless rate has declined since its peak during Obama’s term of 10 percent in October 2009, the drop has been slow and halting. It was stuck at about 9 percent through the first three quarters of last year. Since last August, the jobless rate has dropped seven out of eight months, to 8.1 percent in April.

Middle-income families have been slow to see a rise in living standards from the recovery. Real median household income in March was down $4,300 since Obama took office in January 2009 and down $2,900 since the June 2009 start of the economic recovery, according to an analysis of census data by Sentier Research, an economic-consulting firm in Annapolis, Maryland.

Iowa has maintained one of the strongest state economies, with the unemployment rate at 5.1 percent in April.

The state’s large agricultural sector was boosted by record national farm profits last year. Demand for agricultural equipment manufactured in the state also has been rising in emerging economies. Deere & Co. (DE) announced a $70 million expansion of its tractor production facility in Waterloo, Iowa, on March 1.

To contact the reporter on this story: Roger Runningen in Washington at rrunningen@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.