Obama, Romney clash over taxes, outsourcing jobs

UPDATE — Clashing over the economy, President Barack Obama challenged Mitt Romney to join him in allowing tax hikes for rich Americans like them, needling his Republican rival to "compromise to help the middle class." Romney dismissed the idea and returned fire on a tender topic, calling Obama the real "outsourcer-in-chief."

From Iowa and Colorado, two of the competitive states drawing nearly all of this year's campaign attention, Obama and Romney fought for stronger footing Tuesday. While Obama was back in his feel-good Iowa ground to talk taxes, Romney responded to charges that he sent jobs overseas when he worked in private equity.

"It is interesting that when it comes to outsourcing that this president has been outsourcing a good deal of American jobs himself, by putting money into energy companies that end up making their products outside the United States," Romney told a supportive audience. For days, the former Bain Capital executive has been under heat from conservatives from what critics view as a failure to respond to the Obama team's attacks that Romney moved jobs out of America as he made a fortune.

"If there's an outsourcer-in-chief, it's the president of the United States, not the guy who's running to replace him," Romney said in Grand Junction, Colo. His team sought to make clear Romney had weighed in, even loading up press seats on the campaign plane with a newspaper story critical of Obama's outsourcing record.

*This is an update to previous AP coverage below.*

WASHINGTON (AP) — Seeking an election-year fight over taxes, President Barack Obama is hitting the road to press Congress to extend tax cuts for low- and middle-income earners, framing a debate with Mitt Romney and congressional Republicans over tax fairness.

Obama was making his pitch Tuesday in Iowa, the state that launched his presidential bid in 2008. He faces a tough contest there against Romney this fall.

The president wants Congress to pass a one-year extension of the Bush-era tax cuts for households earning less than $250,000 before they expire at the end of the year. Romney has pushed for an extension of cuts for all earners.

"This nation runs on economic freedom and we have to restore it," Romney told radio host Michael Medved on Monday. "And to restore economic freedom we have to have taxes that are competitive with other nations."

Obama sought to elevate the tax debate as one of the defining issues of the campaign, saying the outcome in the November election would determine the fate of the tax cuts for higher income earners. The White House and Obama's campaign want to use the tax debate to portray congressional Republicans as obstructionists and Romney as a defender of the wealthy who is willing to push an across-the-board extension of the tax breaks at the expense of those earning more modest incomes.

"Let's not hold the vast majority of Americans and our entire economy hostage while we debate the merits of another tax cut for the wealthy," Obama said Monday at the White House.

Obama threatened to veto a full extension of the Bush tax cuts, saying in an interview with WWL-TV in New Orleans on Monday that a tax cut for the wealthiest 2 percent of Americans would cost $1 trillion over the next decade at a time when the nation needs to reduce the federal deficit.

On Tuesday, the Obama campaign reiterated calls for Romney to release more of his tax returns. In a video posted on YouTube, the campaign asks: "How long can Romney keep information on his investments in overseas tax havens secret? And why did he do it in the first place?"

Emphasizing the consequences to families, Obama was meeting Tuesday with an Iowa couple that the White House said would benefit from his tax plan. He was then holding a campaign event at a Cedar Rapids community college where he planned to make the case for the extension for those earning $250,000 or less.

Obama was making another visit to a battleground state with a more positive economic outlook than other parts of the nation. Iowa's strong farm economy has pushed the state's unemployment rate down to 5.1 percent, well below the national average of 8.2 percent. Obama took a bus tour through parts of Ohio and Pennsylvania last week — both states have more positive jobless rates than the rest of the nation — and was campaigning in Virginia on Friday and Saturday. Virginia's unemployment rate is 5.5 percent.

Yet polls in Iowa have shown Obama locked in a tight race with Romney for the state's six electoral votes, a potential warning sign after Obama triumphed in Iowa's leadoff caucuses in 2008 and then captured the state in the general election.

Senior campaign adviser David Plouffe said Tuesday the Obama campaign wants to focus its appeal on battleground states "to educate voters about what the choice is" in 2012.

Plouffe said in an interview on ABC's "Good Morning America" that the Obama camp is concerned about the role of super PACs in bankrolling Romney's challenge, charging that they want to