Romney compares Calif. to debt-burdened countries
Thursday, August 9, 2012
SACRAMENTO, Calif. (AP) — Republican presidential candidate Mitt Romney drew sharp rebukes from California Democrats on Wednesday for comparing the nation's most populous state to struggling European countries.
The former Massachusetts governor, who owns an oceanfront home in the northern San Diego County community of La Jolla, compared California to struggling European nations, during a campaign stop in Iowa. He warned that President Barack Obama is leading the nation down a similar path of huge debt.
"Entrepreneurs and business people around the world and here at home think that at some point America is going to become like Greece or like Spain or Italy, or like California — just kidding about that one, in some ways," he added, to laughter from his audience in Iowa.
While California has the nation's third highest unemployment rate, a spokesman for Democratic Gov. Jerry Brown, Gil Duran, said it leads the nation in the number of jobs created, its bond rating outlook is improved and its borrowing costs have fallen, making it the "exact opposite" of Spain, Italy and Greece. He called Romney's comment a "paper-thin Republican talking point" that doesn't stand up to scrutiny.
"Mr. Romney's weak grasp of foreign affairs was painfully evident during his recent trip to Europe, but these comments underscore the fact that he knows just as little about the Golden State as he does about the rest of the world," Duran said, referring to a series of gaffes Romney made on his recent trip abroad.
California has a $1.9 trillion economy, the ninth largest in the world, and is home to Silicon Valley, Hollywood and an agriculture industry that is the largest of any state.
While it has been on a slow rebound after being hit hard by the mortgage meltdown, California is nowhere near the fiscal collapse being faced by some European countries, economists have said.
Unlike a country, which can run a deficit, California is constitutionally required to adopt a balanced budget each year.
The credit rating agency Standard & Poor's last year rejected comparisons between the ongoing budget problems facing California and Greece. Among other things, it said Greece's government spending makes up a significantly larger portion of its economy than that of California — more than 50 percent compared to 7 percent. Analyst Gabriel Petek said California, unlike Greece, was facing a policy crisis rather than a debt crisis.
Romney's comments are unlikely to cost him votes in heavily Democratic California, where Obama has a substantial lead in public opinion polls. Both candidates make frequent visits to tap the state's wealthy entrepreneurs, business leaders and entertainers for campaign cash.
Brown has sought deep spending cuts since taking office last year but also is seeking voter approval in November for temporary income and sales tax increases. In May, he likened California's fiscal challenge to those facing the federal government and European nations.
"Given the decade of fiscal disconnect, I've committed to righting the ship of state and getting it into balance," Brown said.
In the wake of the housing crisis, California has faced several successive years of multibillion-dollar budget deficits. But the state also is home to some of the nation's biggest innovators, such as Silicon Valley-based Google, Apple and Intel, said Sen. Ted Lieu, a Democrat from Torrance.
"It's contradicted by the facts," he said of Romney's comments. "Not only did we launch a one-ton rover that landed on Mars, we launched a spacecraft that went up, delivered goods to the space station and then returned to Earth. These are California entrepreneurs, and we want the rest of the world to do what California's doing."
NASA's Jet Propulsion Laboratory in Pasadena is managing the $2.5 billion mission that successfully landed the rover Curiosity on Mars last weekend. In May, Hawthorne, Calif.-based SpaceX became the first private company to launch a spacecraft into orbit and dock at the International Space Station.
California's economy has been on a slow rebound, adding more than 38,000 jobs in June to push its unemployment rate down slightly to 10.7 — down from 11.9 percent in June 2011. That still remains well above the national average of 8.2 percent.
S&P has assigned the state an A- credit outlook, the lowest of any state, but also gave Brown a positive response to the budget he signed this summer, saying the state's economy is on the upswing.
The agency also gave the state its highest rating last week for the $10 billion in bonds California is expected to sell this year.
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