JUDY WOODRUFF: Republican presidential nominee Mitt Romney found himself on the defensive today over statements he made four months ago. His subjects ranged from income taxes and dependency on government to peace in the Middle East. And they stirred new criticism of the candidate.
For Mitt Romney, the challenge was to get back on message and contain the damage from remarks he made at a private fundraising dinner in May. On Monday, the liberal magazine "Mother Jones" released video that shows Romney dismissing supporters of President Obama.
MITT ROMNEY (R): There are 47 percent of the people who will vote for the president no matter what.
All right, there are 47 percent who are with him who are dependent upon government, who believe that they are victims, who believe the government has the responsibility to care for them.
JUDY WOODRUFF: The Republican nominee goes on to say that Obama voters don't care about his plans for tax cuts.
MITT ROMNEY: These are people who pay no income tax; 47 percent of Americans pay no income tax.
So, our message of low taxes doesn't connect. And he will be out there talking about tax cuts for the rich. I mean, that's what they sell every four years. And so my job is not to worry about those people. I will never convince them that they should take personal responsibility and care for their lives.
JUDY WOODRUFF: Romney's reference to the 47 percent who pay no federal income taxes draws roughly on data from the nonpartisan Tax Policy Center.
The group's analysis further shows more than a quarter of Americans pay payroll taxes without incurring income tax liability. Other groups paying no federal income tax include elderly people on Social Security and households earning under $20,000 a year.
But Romney's remarks sparked a furor that goes beyond the numbers in question. Recognizing that, he spoke to reporters late Monday in Costa Mesa, Calif.
MITT ROMNEY: It's not elegantly stated. Let me put it that way. I'm speaking off the cuff in response a question. And I'm sure I could state it more clearly and in a more effective way than I did in a setting like that.
JUDY WOODRUFF: At the same time, Romney didn't apologize or back away from his broader point.
MITT ROMNEY: This is ultimately a question about direction for the country. Do you believe in a government-centered society that provides more and more benefits, or do you believe instead in a free enterprise society where people are able to pursue their dreams?
JUDY WOODRUFF: And this afternoon, in an interview on FOX News, the candidate came back to the issue.
MITT ROMNEY: I believe the right course for America is one where government steps in to help those that are in need. We're a compassionate people.
But then we get -- let people build their own lives, create enterprises. We believe in free people and free enterprise, not redistribution. The right course for America is to create growth, create wealth, not to redistribute wealth.
JUDY WOODRUFF: President Obama made his first comment on the furor appearing on "Late Show with David Letterman." He said, "Anyone who wants to be president has to work for everyone, not just for some."
And White House press secretary Jay Carney weighed in as well at a morning briefing.
JAY CARNEY, White House: Setting aside, you know, what Gov. Romney thinks, I can tell you that the president certainly doesn't think that men and women on Social Security are irresponsible or victims.
JUDY WOODRUFF: The Obama campaign also highlighted Romney's comments in a new Web video that it said featured man-on-the-street reaction.
WOMAN: I don't think anybody is ever looking for a handout. I think that we all want chances and opportunities.
JUDY WOODRUFF: The episode drew comparisons to 2008, when then candidate Obama remarked at a private fundraiser that people in depressed areas of the Midwest -- quote -- "get bitter and cling to guns or religion." That statement came in the middle of the Democratic primary season, giving Mr. Obama time to recover politically.
For Romney, the timing is more problematic, with Election Day now just seven weeks away. And he could face questions about other statements from that May fund-raiser as well.
At one point, he joked that it would be helpful to his electoral prospects if he were Latino. And in another, he said Palestinians have no interest whatsoever in establishing peace.
GWEN IFILL: For more on the numbers and the politics, I'm joined by Roberton Williams, an economist and senior fellow at the Tax Policy [Center].
And Nancy Cook, budget and tax correspondent for "National Journal."
Welcome to you both.
Bob Williams, I'm very curious about this number, this 47 percent number. Is it an unusually high number? Is it something that's grown, has shrunk?
ROBERTON WILLIAMS, Tax Policy Center, Urban Institute: It's a lower number now than it was a few years, at the height of the recession. In 2008, 2009, slightly over 50 percent of Americans paid no income tax.
That's because the recession put people out of work. It lowered their incomes. And we also had tax provisions that helped stimulate the economy under...
GWEN IFILL: So, who do we think these people really are? We saw how Judy broke down some of it. But beyond that, are these people who honestly are not paying anything in taxes, or they're just not paying in income taxes?
ROBERTON WILLIAMS: The story is half-true. It's true about the income tax, but it doesn't address the other taxes people might pay.
Of these people, 40 percent -- I'm sorry -- 60 percent of them pay payroll taxes because they're working.
They pay the taxes that support Social Security and Medicare. They're likely to pay state sales taxes, local taxes and federal excise taxes. So they're not paying nothing at all. They're just not paying income tax.
GWEN IFILL: And when the candidate makes the comment about dependency and he's talking about people who are relying on government, are we talking -- is that -- are they talking about Social Security, Medicare, Medicaid, tax credits, mortgage interest deductions? I don't -- you know...
ROBERTON WILLIAMS: It's really hard to tell exactly what he was speaking to. He was talking about dependency. Do you mean that when we grow old and we start collecting Social Security and Medicare? Is that what we're talking about?
Are we talking about TANF, the Temporary Assistance for Needy Families? Are we talking about food stamps? We have a whole panoply of programs that help people when they need the help.
If we look at the way the tax system works, we have some people, about half the people who pay no tax just because they're plain poor. Their incomes are so low that the standard deduction, personal exemptions zero out their taxable incomes. They would pay nothing if there were no special preferences at all.
The other half of people benefit from special preferences built into the tax system, tax credits for children. Low-income workers get the Earned Income Tax Credit. High-income people benefit greatly from low tax rates on capital gains and dividends.
So, everybody throughout the income distribution benefits from the tax provisions. It's just, if you're low-income or moderate-income, you may well be zeroed out and pushed off the tax rolls entirely.
GWEN IFILL: And let me ask you this.
This 47 percent, whether it was 50 percent, 47 percent, 46 percent, is this a sustainable number for us as a society to have that number of people who are not liable for income taxes?
ROBERTON WILLIAMS: The question of whether certain people are paying or not paying is not the issue at hand.
What really matters is, we need to cut our spending. We need to raise more taxes to bring our budget into balance. And if that means more of us paying taxes, that's the way we will have to go. But we do need more revenue. We do need to cut spending.
GWEN IFILL: Nancy Cook, you wrote in "National Journal" this is not a new argument that's been made, especially in conservative circles, especially that kind of explosive word he used about victims, victimhood.
NANCY COOK, "National Journal": Yes, the victim word is new. And I think it was really jarring to a lot of liberal voters.
But the idea that, you know, there's this huge swathe of people that don't pay federal income taxes and that's a problem has been, you know, a big talking point in conservative circles for some time.
In the Senate, Sen. Orrin Hatch has really talked about it, Sen. John Cornyn. And there was a Joint Committee on Taxation study that came out a while ago back when the recession was more in its full throes that really talked about how the majority of people don't pay federal income tax.
And so it has been used as a talking point to talk about the importance of limiting the size of the federal government and also interestingly as a issue of tax fairness. They say, you know, if rich people are paying more and more taxes, poor people should be paying more as well.
GWEN IFILL: Which takes us to Mitt Romney's response this afternoon in that interview he gave on FOX, in which he used the word redistribute or redistribution multiple times.
What was that about?
NANCY COOK: Well, what he's really talking about is he's trying to make the case that Obama, through the tax code, is trying to, you know, redistribute wealth and tax the wealthy more.
What he is sort of glossing over is the idea that the tax code really benefits lots of people through these breaks that Bob is talking about.
And it benefits people at different points of their lives. So students get tax breaks for student loans. Elderly people get tax breaks on Medicare and Social Security.
You know, the stimulus bill had tax credits for people. People get tax credits for working families if you have children. So there's all these things that the tax code incentivizes. And it really doesn't just go to poor people, as his comments indicated.
GWEN IFILL: In a purely political sense, if it's possible to make anything purely political or apolitical, who is this argument designed to appeal to? Does it appeal -- or who -- and who does it alienate?
NANCY COOK: Well, that's one of the most interesting things, is that this is really an argument that plays to the base.
And I feel like, you know, he said at a fundraiser in the spring before the general election really took hold. And that's something that appeals to conservative voters.
But at this moment in the general election, when he's trying to win over independent voters, many of whom take advantage of these tax breaks that he's talking about that benefit working families, you know, that's a really alienating statement for him to make.
GWEN IFILL: Except I didn't see any sense this afternoon in his interview -- when he talked about redistribution and attributed that sentiment to the president, I didn't get any sense of him backing away from that, even though we are now in the fall campaign.
NANCY COOK: Yes, he doesn't seem to be backing away. He didn't apologize last night or today. He's not questioning the validity of the video.
He's really instead trying to pivot back to this message that the campaign has tried to stay on about the economy and the state of the economy and calling into question President Obama's record on it.
The only problem is that the campaign constantly sort of slips back into these other arguments, whereas, if they kept the focus just on the unemployment number and the state of the economy, they may have been more successful.
GWEN IFILL: I want to ask you both about this, the appeal of this argument -- or the non-appeal of this argument -- to senior citizens in particular.
You look at the polls, and Mitt Romney is doing much better than Barack Obama when it comes to senior citizens. So, does this argument work against him? Does it provide a target of opportunity, a vulnerability?
NANCY COOK: Well, it certainly seems to politically. Senior citizens do benefit from this.
And it really sort of falls in line almost with the argument that Democrats are making about Paul Ryan and Social Security and how he will dismantle that. It makes the Republicans seem like they're a little less sympathetic to this group.
GWEN IFILL: But is -- I don't know if you could even say whether there's a connection between what the beneficiaries -- how people benefit from these kinds of programs and how they might vote.
ROBERTON WILLIAMS: I don't know that we know anything about that kind of connection.
GWEN IFILL: Yes.
ROBERTON WILLIAMS: What I can tell you as an economist is who is benefiting and who isn't. Most of the benefits from the tax code go to wealthy people, preferential tax rates on capital gains and dividends. It means high-income people can pay very little tax. Those are the big ones.
The small ones are the ones that benefit these low-income families who, because they're poor, low-income, can be moved completely off the tax rolls by these tax breaks. But the big -- the rich guys are the ones that get the big benefits.
GWEN IFILL: Back to the politics of this, the trickle-down politics of this, I guess, because I noticed that the -- at least the Senate, the Republican nominee for Senate in Connecticut today, Linda McMahon, came out and said, I have nothing to do with this.
NANCY COOK: Right.
GWEN IFILL: She completely distanced herself, said that she flat-out disagrees with Mitt Romney.
Is there a potential for trickle-down and down-ballot races on this issue?
NANCY COOK: Certainly. And Scott Brown also, you know, the senator from Massachusetts against Elizabeth Warren, also very quickly distanced himself from that this afternoon.
NANCY COOK: And in the Senate races, the Democrats have been really using Representative Paul Ryan, the vice presidential nominee's budget plan as a way to, you know, really hit Mitt Romney and Paul Ryan, saying that they will dismantle Medicare.
And so I could see this comment also really coming into play as they're -- them using them to say that they want to tax low-income people.
GWEN IFILL: Does Paul Ryan's tough budget, does that make it difficult for Mitt Romney to back too far away from an argument like this?
NANCY COOK: Well, it certainly does because a lot of the spending cuts that Representative Ryan has proposed would fall on low-income people. He wants to block-grant Medicaid. He wants to block-grant food stamps.
And these are things that would turn the funding over to the states and ultimately completely change the scope of it from an entitlement program to something with limited funding. And that in turn would mean that fewer people could take advantage of it.
GWEN IFILL: It's going to be a very interesting argument to watch play out.
Nancy Cook from "National Journal," Roberton Williams from the Tax Policy Center, thank you both very much.
ROBERTON WILLIAMS: You're welcome.
NANCY COOK: Thank you.