Republicans battle over undecided voters in Iowa

  By THOMAS BEAUMONTDES MOINES, Iowa -- With time running short, Republican presidential candidates Rick Santorum, Rick Perry and Newt Gingrich battled Thursday to win over a pivotal crop of undecided conservative voters. Of all the candidates, only Mitt Romney seemed to largely escape attack as he worked to win a state that long seemed out of reach until this week.

"Don't settle for what's not good enough to save the country," the newly ascendant Santorum implored Iowans at city hall in Coralville, urging voters to put conservative principles above everything else and suggesting that his rivals, and specifically Ron Paul, lacked them.

For the first time, though, the former Pennsylvania senator became a target.

"When he talks about fiscal conservatism, every now and then it leaves me scratching my head because he was a prolific earmarker," Perry, the Texas governor, said of Santorum as the day began, referring to special spending projects members of Congress seek. "He loaded up his bill with Pennsylvania pork."'

Santorum defended the practice as part of lawmakers' constitutional role as appropriators, telling CNBC that he owed it to Pennsylvanians to bring money to the state. He said earmarking became abused and that he would support a ban on them if he were president.

Perry also slapped at Santorum in a radio ad and in a new TV commercial that lumps him in with Minnesota Rep. Michele Bachmann, former House Speaker Newt Gingrich and Paul and says: "The fox guarding the henhouse is like asking a congressman to fix Washington: bad idea."

The maneuvering underscored the fluid - if not convoluted - state of the GOP presidential race as Tuesday's caucuses loom while cultural conservatives and evangelical Republicans, who make up the base of the electorate here, continue to be divided. That lack of unity paves the way for someone who is seen as less consistently conservative.

Five days out, public and private polling show Romney and Paul in strong contention to win the caucuses, with coalitions of support cobbled together from across the Republican political spectrum and their get-out-the-vote operations - beefed up from their failed 2008 bids - at the ready. They're the only two with the money and the organizations necessary to ensure big turnouts on Tuesday.

Three others - Santorum, Perry and Gingrich - will have to rely largely on momentum to carry supporters to precinct caucuses. Each was working to convince fickle conservatives that he alone would satisfy those who yearn for a nominee who would adhere strictly to GOP orthodoxy.

Bachmann, meanwhile, worked to convince backers that her cash-strapped campaign was not in disarray after a top supporter in Iowa abandoned her to back Paul.

After state Sen. Kent Sorenson bolted as her Iowa campaign chairman, Bachmann continued to bleed staff, losing her Iowa political director, Wes Enos, on Thursday. Some evangelical pastors have said they've urged her to quit the race.

Bachmann condemned Sorenson for quitting, and defiantly vowed to continue in the race.

"Iowans aren't told who to vote for. Iowans are independent and they're going to make their decisions," Bachmann said in Des Moines, on the last day of a 10-day tour of Iowa's 99 counties.

Ads, mostly negative, flooded television and radio. They filled mailboxes, too.

No less than five new TV ads were rolled out Thursday, with Romney, for one, releasing a 60-second, optimistic commercial promoting his vision for America and illustrating his confidence with his standing in the primary race. He was staying far from the fray and looking toward the general election.

"In the campaign to come, the American ideals of economic freedom and opportunity need a clear and unapologetic defense. And I intend to make it because I have lived it," Romney says in the commercial that includes patriotic images and scenes from his June campaign announcement in New Hampshire.

He's in the midst of a four-day trek that he hopes will seal victory here and give him momentum heading into the Jan. 10 New Hampshire primary, the closest thing to a must-win state for the former Massachusetts governor.

On the second day of his bus tour, Romney turned out big crowds at stops in northern and eastern Iowa, focusing on more populous areas and counties he won four years ago.

"We have a choice in this coming election of what kind of America we're going to have," Romney said at J's Home Cooking in Cedar Falls, before meeting a crowd of 500 in Mason City. "It's not just about replacing a president. It's about saving the soul of America."

He didn't acknowledge his rivals but an outside group aligned with him rolled out a new ad against Gingrich that asks, "Haven't we had enough mistakes?" and notes the former House speaker's past admissions of judgment lapses.

As Romney sailed above it all, the fight raged among his rivals elsewhere in the state, where all six candidates competing in the caucuses are spending almost all their time for the next five days.

Looking to capitalize on his burst of support in new polls, Santorum made a play for tea party backers lining up behind Paul by arguing that the Texas congressman is longer on promising sweeping change than enacting it. "The guy has passed one bill in 20 years.

What makes you think he can do any of these things?" Santorum said.

He added: "We need someone who has the bold, sharp contrast not just to win the election but govern the country, not somebody who is just a little better."

And, Bachmann castigated Paul's opposition to military intervention in Iran as "dangerous." She also suggested that his opposition to the federal war on drugs amounted to supporting the legalization of cocaine and heroin.

Perry focused his criticism on all the others on the right, saying: "There are other conservatives in this contest. I readily agree. But their records don't always square with the rhetoric."

And, as he argued that he was the only true outsider in the race, Perry noted that four of his rivals - Gingrich, Paul, Santorum and Bachmann - have a combined 63 years of experience in Washington.

"I am asking you to vote your conservative values," Perry implored.

The closest anyone got to criticizing Romney directly was when Perry was asked in Cedar Rapids about family dynasties and cited, among other families, the Romneys.

In response, Perry mentioned his own modest upbringing and said: "I'm glad you gave me the opportunity to reflect my differences with Mitt."

The worst Romney faced from his rivals were veiled shots.

Santorum said Republicans must draw a clear contrast with Obama, rather than nominate a Republican with moderate tendencies out of political expedience.

"We need someone who has the bold, sharp contrasts, not just to win the election but to govern the country. Not just someone who is a little bit better," Santorum told supporters.

Perry was asked about family dynasties and the questioner cited, among other families, the Romneys. Perry stopped short of criticizing Romney's privileged upbringing. He mentioned his own humble beginning in small-town Texas before adding: "I'm glad you gave me the opportunity to reflect my differences with Mitt."

Gingrich, for his part, spent the day trying to wrap himself in President Ronald Reagan's cloak, announcing the backing of the late president's son, Michael, and, a day earlier, support from Reagan economic adviser Arthur Laffer.

Even as the polls show him sliding, Gingrich projected an upbeat image.

"The strategy of focusing on jobs and economic growth, staying positive and being pretty relentless in answering questions at every meeting is working," he insisted.

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Associated Press writers Philip Elliott, Mike Glover, Kasie Hunt, Brian Bakst and Shannon McCaffrey contributed to this report.

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Republicans accept short-term payroll tax cut

  By ANDREW TAYLOR and LAURIE KELLMANWASHINGTON -- House Republicans on Thursday caved to demands by President Barack Obama, congressional Democrats and fellow Republicans for a short-term renewal of payroll tax cuts for all workers. The breakthrough almost certainly spares workers an average $20 a week tax increase Jan. 1.

After days of wrangling that even Speaker John Boehner acknowledged "may not have been politically the smartest thing in the world," the Ohio Republican abruptly changed course and dropped demands for immediate holiday season talks with the Senate on a full-year measure that all sides said they want. Senate leaders had insisted on the two-month extension to buy time for talks next year.

The House and Senate plan to act on the two-month extension Friday.

House Republicans were under fire from their constituents and GOP establishment figures incensed that they would risk losing the tax cut issue to Democrats at the dawn of the 2012 presidential and congressional election year. House GOP arguments about the legislative process and the "uncertainty" a two-month extension would mean for business were unpersuasive.

"In the end House Republicans felt like they were reenacting the Alamo, with no reinforcements and our friends shooting at us," said Rep. Kevin Brady, R-Texas.

The compromise legislation would renew the tax break through Feb. 29, along with jobless benefits and a "fix" to prevent doctors from absorbing a big cut in Medicare payments. Its $33 billion cost would be covered by an increased fee on mortgages backed by Fannie Mae, and Freddie Mac.

The developments were a clear win for Obama. The payroll tax cut was the centerpiece of his three-month campaign-style drive for jobs legislation that seems to have contributed to an uptick in his poll numbers - and taken a toll on those of congressional Republicans.

"Because of this agreement, every working American will keep his or her tax cut - about $1,000 for the average family," Obama said in a statement. "That's about $40 in every paycheck. And when Congress returns, I urge them to keep working to reach an agreement that will extend this tax cut and unemployment insurance for all of 2012 without drama or delay."

If the cuts had expired as scheduled, 160 million workers would have seen a 2 percentage point increase in their Social Security taxes. And up to 2 million people without jobs for six months would start losing unemployment benefits averaging $300 a week.

The GOP retreat ends a tense standoff in which Boehner's House Republicans came under great pressure to agree to the short-term extension passed by the Senate on Saturday. The speaker was initially open to the idea, but rank-and-file Republicans revolted, and the House instead insisted on immediate talks on the year-long measure passed by the House, which contains curbs to unemployment insurance and other ideas backed by conservatives - as well as deeper spending cuts to pay for the full-year cost.

After Senate leaders tried but failed to match the House's goal for a full-year pact, the chamber on Saturday instead gave sweeping approval for the two-month extension of the payroll tax cut, jobless benefits and doctors' Medicare fees that otherwise would have been cut 27 percent. The House had just days before passed a full-year extension that included a series of conservative policy prescriptions unpalatable to Obama and congressional Democrats.

Obama, Republicans and congressional Democrats all said they preferred a one-year extension but the politics of achieving that eluded them. All pledged to start working on that in January.

"Has this place become so dysfunctional that even when we agree to things we can't do it?" Obama asked. "Enough is enough.".

The top Senate Republican, Mitch McConnell of Kentucky, was a driving force behind Thursday's agreement, imploring Boehner to accept the deal that McConnell and Senate Democratic Leader Harry Reid had struck last week and passed with overwhelming support in both parties.

"There remain important differences between the parties on how to implement these policies, and it is critical that we protect middle-class families from a tax increase while we work them out," Reid said after Boehner's announcement.

The breakthrough emerged as a firewall erected by tea party-backed House Republicans crumbled Thursday.

"I don't think that my constituents should have a tax increase because of Washington's dysfunction," said freshman Rep. Sean Duffy, R-Wis.

The Republican establishment, too, put new pressure on House Republicans to compromise.

The 2008 GOP presidential nominee, John McCain, former Bush administration confidant Karl Rove and The Wall Street Journal editorial page were among conservative voices urging House Republicans to retreat.

Just hours before he announced the breakthrough, Boehner had made the case for a year-long extension. But on a brief late afternoon conference call, he informed his colleagues it was time to yield.

"He said that as your leader, you've in effect asked me to make decisions easy and difficult and I'm making my decision right now," said Rep. Jack Kingston, R-Ga., paraphrasing Boehner's comments.

Kingston said the conference call lasted just minutes and Boehner did not give anyone time to respond.

There was still carping among tea party freshmen upset that GOP leaders had yielded.

"Even though there is plenty of evidence this is a bad deal for America ... the House has caved yet again to the president and Senate Democrats," said Rep. Tim Huelskamp, R-Kan. "We were sent here with a clear set of instructions from the American people to put an end to business as usual in Washington, yet here we are being asked to sign off on yet another gimmick."

Almost forgotten in the firestorm is that McConnell and Boehner had extracted a major victory last week, winning a provision that would require Obama to make a swift decision on whether to approve construction of the Keystone XL oil pipeline, which would bring Canadian oil to the U.S. and create thousands of construction jobs.

To block the pipeline, Obama would have to declare that is not in the nation's interest.

Obama wanted to put the decision off until after the 2012 election.

House Republicans did win one concession in addition to a promise that Senate Democrats would name negotiators on the one-year House measure: a provision to ease concerns that the 60-day extension would be hard for payroll processing companies to implement.

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Republicans, Obama meet on debt limit

  By ANDREW TAYLORWASHINGTON -- Top House Republicans pressed President Barack Obama Wednesday for a detailed plan on budget cuts, and one leading lawmaker accused him of distorting a GOP Medicare proposal at the center of the partisan divide over spending.

White House press secretary Jay Carney said the meeting was productive despite the absence of any signs of progress. He also made clear that Obama has no intention of letting up on his assertions that Rep. Paul Ryan's plan to send future Medicare recipients into the private insurance marketplace will "end Medicare as we know it."

"He doesn't believe that we need to end Medicare as we know it," Carney said at a White House briefing, about an hour after the East Room meeting between Obama and House Republicans.

The White House session came as the GOP sought to build pressure on Obama for trillions in spending cuts in exchange for any increase in the government's ability to borrow.

Afterward, dozens of rank-and-file GOP lawmakers streamed out of the front door of the White House and into a caravan of blue buses waiting for them on Pennsylvania Avenue, while members of the GOP leadership stopped on the driveway to speak to reporters and camera crews awaiting them in under a steaming sun.

"Any day Republicans and Democrats are actually having a dialogue, this is a good thing, said Republican Rep. Jeb Hensarling of Texas.

Yet it was hard to see any concrete progress from a meeting that, based on descriptions by both sides, amounted to a face-to-face recitation of each side's positions, but no breakthrough on how to reach a debt-reduction deal. The talks came as an Aug. 2 deadline approaches for the federal government to raise the debt limit or go into unprecedented default.

"Unfortunately what we did not hear from the president is a specific plan of his to deal with the debt crisis," Hensarling said. Instead, according to a GOP official briefed on the meeting, Obama noted that he's deputized Vice President Joe Biden to lead talks on deficit reduction.

"This is a large meeting and this is not the forum for specific advances in the negotiations. ... And yet it was productive," Carney said.

"I think it helps in that it allows everyone in the room to look each other in the eye."

House Speaker John Boehner, R-Ohio, said, "I told the president, one more time, this is the moment. This is the window of opportunity where we can deal with this on our terms. We can work together and solve this problem. We know what the problems are. Let's not kick the can down the road one more time."

According to a GOP official briefed on the meeting, Boehner and other leaders told Obama that he hadn't put a specific plan for spending cuts on the table. They brought up a speech he gave at George Washington University in April in which he called for deficit reduction totaling $4 trillion through spending cuts, tax increases and other measures. The Republicans said a speech isn't a plan.

Ryan, who heads the House Budget Committee., had attended the speech only to hear Obama excoriate his Medicare proposal. On Wednesday the Wisconsin congressman told the president he'd viewed that as a sign that Obama was thinking about the 2012 elections and wanted fellow Democrats to turn up the political heat, according to the GOP official.

The official, who spoke on condition of anonymity to discuss the private meeting, said Ryan told the president that leaders have to lead and Obama hadn't shown leadership.

Pressed on that after the meeting Ryan said: "I just said we got to take on this debt and if we demagogue each other at the leadership level then we're never gonna take on our debt."

Ryan said he explained his Medicare plan to the president to get him to stop mischaracterizing it. Obama and Democrats routinely label Ryan's proposal a "voucher" plan that would undo Medicare as it is now known.

"It's been misdescribed by the president and many others and so we simply described to him precisely what it is we've been proposing so that he hears from us how our proposal works so that in the future he won't mischaracterize it," Ryan said.

"The issue isn't what you call it," Carney countered later. "It is a voucher plan."

Republican officials said Boehner and other leaders all pressed Obama on Medicare, saying he had not put forward any plan to save it from going bankrupt. Boehner made the point early on that Medicare is on a path to bankruptcy. Carney said Obama has in fact sought savings from Medicare.

Ahead of Wednesday's meeting, Boehner released a statement signed by more than 150 economists backing his position on coupling spending cuts with any debt limit increase.

"Increasing the debt ceiling without significant spending cuts and budget reforms will send a message to American job creators that we still are not serious about ending Washington's spending addiction," the Ohio Republican said in the statement.

The session between Obama and House Republicans came on the heels of a symbolic and lopsided vote the day before against a GOP proposal to raise the cap on the debt limit by $2.4 trillion. The proposal, intended to prove that a bill to increase the borrowing cap with no spending cuts is dead on arrival, failed badly Tuesday on a 318-97 vote.

Democrats said the vote was aimed more at giving tea party-backed Republicans an opportunity to broadcast a "nay" vote against the administration's position that any increase in U.S. borrowing authority should be done as a stand-alone measure uncomplicated by difficult spending cuts to programs like Medicare. A more painful vote to raise the debt ceiling looms for Republicans this summer.

In fact, Biden is leading talks on reaching spending cuts alongside the debt measure in advance of the Aug. 2 deadline set by the Treasury Department.

If no action is taken by then, Treasury Secretary Tim Geithner has warned, the government could default on its obligations and risk turmoil that might plunge the nation into another recession or even an economic depression.

The government already has reached the limit of its borrowing authority, $14.3 trillion, and the Treasury is using a series of extraordinary maneuvers to meet financial obligations.

By no longer making investments in two big pension funds for federal workers and beginning to withdraw current investments, for example, the Treasury created $214 billion in additional borrowing headroom.

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Associated Press writers Ben Feller and Erica Werner contributed to this report.

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