The Wall Street Journal-20080131-Campaign -08- McCain- Romney Clash Over Economy- Iraq War

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Campaign '08: McCain, Romney Clash Over Economy, Iraq War

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SIMI VALLEY, Calif. -- John McCain, newly crowned front-runner for the Republican presidential nomination, and his chief rival, Mitt Romney, sparred over the economy and the war in Iraq at a debate here last night.

Mr. McCain will be endorsed by California Gov. Arnold Schwarzenegger today, according to senior members of the governor's administration and a McCain campaign official.

At the debate, the senator from Arizona and former prisoner of war repeated his assertion that Mr. Romney had set a timetable for withdrawal for the troops in Iraq. The remarks, which Mr. McCain extrapolated from an interview the former governor of Massachusetts gave nine months ago, visibly angered Mr. Romney, who adamantly denied the charge.

"It's an attempt to do the Washington-style old politics, which is lay a charge out there, regardless of whether it's true or not. Don't check it, don't talk to the other candidate," he said. "Just throw it out there, get it in the media and the stream."

"Your negative ads, my friend, have set the tone, unfortunately, in this campaign," Mr. McCain responded.

In Florida, Mr. McCain successfully shifted the focus from the economy to the war in Iraq to win the battleground primary state Tuesday, and he moved the focus from the economy to Iraq again last night. Last night's debate was the last meeting of the candidates before this Tuesday, known as Super Tuesday, when 21 Republican contests take place, including in California.

With the candidate field whittled down from nearly a dozen to just four -- Mike Huckabee and Ron Paul joined Messrs. McCain and Romney on stage at the Ronald Reagan Presidential Library -- the debate became less of a sound-bite festival, as past meetings had been, and more of an extended conversation between the opponents. Remarkably, neither Sen. Hillary Clinton nor Sen. Barack Obama, the Democratic contenders, were mentioned.

All eyes were on Mr. McCain, who after winning three contests in the pivotal states of New Hampshire, South Carolina and Florida, is now considered the front-runner. He took his time in the spotlight to blast Wall Street. "There's some greedy people on Wall Street that perhaps need to be punished," Mr. McCain said in response to a question about how to help people keep their homes and avoid foreclosure.

Mr. McCain is on top in the national polls by nearly seven points, according to an average compiled by Real Clear Politics, a nonpartisan political-news Web site. In California, Mr. McCain has an almost nine- point lead, garnering 31% support to Mr. Romney's 22%.

During the debate, news spread that Mr. McCain will receive the endorsement of the popular Gov. Schwarzenegger. The nod likely will further strengthen Mr. McCain's front-runner status and mirrors the endorsement from Florida Gov. Charlie Crist three days before the Florida primary. Exit polls show Mr. Crist's support played an important role in Mr. McCain's Florida victory.

Mr. Romney remains his biggest threat, having won contests in the comparatively little-watched states of Wyoming, Michigan and Nevada. Mr. Huckabee had an early lead with a win in Iowa but has yet to carry another state. Mr. Paul hasn't won a contest.

The troubled economy opened the 90-minute debate, with a focus on the impending recession and the housing downturn and foreclosure crisis, which has hit California hard.

"I think the efforts that have been made so far are laudable. We may have to go further," Mr. McCain said. He also called for changes to regulations that govern disclosure on consumer-mortgage documents and suggested adding "big letters at the bottom that say, 'I understand this document.'"

Mr. Romney, the millionaire founder of Bain Capital, touted his time as an investor to combat Mr. McCain's accusation that he is a "manager" not a "leader." "You gotta have somebody that's actually done some work in the private economy," Mr. Romney said.

China was also an economic punching bag. Messrs. McCain, Huckabee and Paul all decried the fact that Chinese investment arms have bought billions of dollars of U.S. government bonds that finance government spending. "I'm tired of borrowing money from China," Mr. McCain said.

Mr. Huckabee decried the current proposed economic-stimulus package because the money would be financed with bonds bought by China and the proceeds used by taxpayers to "buy shoes they probably don't need" that were made in China.

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Jim Carlton contributed to this report.