GOP Presidential Contenders Blast Congress Over Tax Dollar Spending

Republican presidential contenders on Friday scolded Congress for extravagant spending of tax dollars, and Rudy Giuliani blamed the issue for GOP losses in last year's elections.

"We lost control of Congress because we were just like the Democrats as far as spending is concerned -- shame on us," Giuliani told the anti-tax group Americans for Prosperity.

Mitt Romney said: "It's time for Republicans to act like Republicans" and he promised to veto any spending increase that is more than the inflation rate minus one percentage point.

Fred Thompson made a joke of lawmakers' free-spending ways, saying that as a senator from Tennessee, he once "accidentally spent some of my own money."

Arizona Sen. John McCain also railed against too much spending, saying in a speech Thursday night that Democrats "will tax, spend, regulate and dictate for the benefit of special interests and partisan objectives."

Giuliani and Romney spent much of their speeches ridiculing Hillary Rodham Clinton and other Democratic candidates.

Giuliani quipped that "Republicans are amateur spenders, and Democrats are professional spenders."

Romney mentioned Clinton's argument that she is a candidate of change and said: "I think she would change America, and we'd go from prosperity to poverty."

Giuliani drew applause dozens of times as he described how he cut income and business taxes, slashed welfare rolls and trimmed employees from his city's payroll as mayor of New York. His record on taxes is an advantage for Giuliani, who is at odds with social conservatives who typically hold sway over Republican primary elections.

Yet Romney has argued Giuliani is vulnerable on the issue because the former mayor fought to eliminate a line-item veto, which a president can use to reject spending, and because Giuliani maintained a commuter tax in New York. And Romney advertises that he has signed a pledge not to raise taxes, which Giuliani has refused to do.

"Actually, as governor, I used the line item veto more than 844 times," Romney said. "I can't wait to do it in Washington."

At the presidential level, the line-item veto was short lived. Congress passed it in 1996, President Clinton used it in 1997, and the Supreme Court struck it down as unconstitutional in 1998.

One of Clinton's line-item vetoes kept New York from raising taxes on hospitals. Giuliani filed a lawsuit resulting in the high court's ruling.

Taxes have sparked pointed exchanges, as Giuliani's campaign responded that Romney offered no tax cuts during his four years as Massachusetts governor and allowed taxation on out-of-state residents working in Massachusetts, of vacation pay, deferred compensation and other income. A Giuliani campaign release referred to "Romney's Taxachusetts."

Giuliani's campaign also pointed out Romney refused to sign a no-new-taxes pledge in 2002.

Other GOP hopefuls -- former Arkansas Gov. Mike Huckabee, Kansas Sen. Sam Brownback and Texas Rep. Ron Paul -- also addressed the group. Brownback argued for fixing Social Security with private savings accounts, saying, "if the money is in personal accounts, the government can't spend it."

Giuliani, who leads the GOP presidential field in most national polls, and Romney drew hoots and cheers when they described Clinton's idea of giving a $5,000 savings bond to every U.S.-born baby. The audience was receptive; members' name tags bore Ronald Reagan's picture.

Giuliani said the price tag of Clinton's proposal would be more than $20 billion and joked about the cost of printing bonds with Clinton's picture on them.

"This costs money -- it doesn't come from trees; it doesn't come from heaven," Giuliani said.

Clinton and top-tier Democratic rivals Barack Obama and John Edwards would pay for their more costly proposals by repealing tax cuts.

Giuliani argued for indexing the alternative minimum tax to inflation and repealing the estate tax, saying the tax reductions would actually generate tax revenues and not cost money because they would stimulate the economy.

By the time he left office as mayor, Giuliani said, "we were collecting 41 percent more revenue from the low taxes than we were collecting from high taxes."

Thompson said that approach works: "When you have tax cuts, revenue isn't lost. The taxpayer knows where it is; it's in his pocket." He and Romney both pledged to cut corporate taxes.

Romney also said he would make President Bush's tax cuts permanent, have more marginal tax rates, hold the line on Social Security taxes and would not tax interest, capital gains and dividends for people making less than $200,000 a year.