Mitt Romney in First Obama-Romney 2012 Presidential debate

On Budget & Economy: Economy Tax: Middle-income families have lost $4,300

At the same time, gasoline prices have doubled under the president. Electric rates are up. Food prices are up. Health care costs have gone up by $2,500 a family. Middle-income families are being crushed.

And so the question is how to get them going again. And I've described it. It's energy and trade, the right kind of training programs, balancing our budget and helping small business. Those are the cornerstones of my plan.

And finally, with regards to that tax cut, look, I'm not looking to cut massive taxes and to reduce the revenues going to the government.

On Corporations: You raise taxes on business and you kill jobs

ROMNEY: Why is it that I don't want to raise taxes? And actually, you said it back in 2010. You said, "When we're in recession, you shouldn't raise taxes on anyone." Well, the economy is still growing slow. And so if you believe the same thing, you just don't want to raise taxes on people. And the reality is it's not just wealthy people--you mentioned Donald Trump. It's not just Donald Trump you're taxing. It's all those businesses that employ one-quarter of the workers in America; these small businesses that are taxed as individuals. You raise taxes and you kill jobs.

On Corporations: There is no tax break for shipping jobs overseas

ROMNEY: Look, I've been in business for 25 years. I have no idea what you're talking about. I maybe need to get a new accountant. The idea that you get a break for shipping jobs overseas is simply not the case. What we do have right now is a setting where I'd like to bring money from overseas back to this country.

On Corporations: Replace Dodd-Frank; it helps big banks & hurts small ones

Q: Do you want to repeal Dodd-Frank?

ROMNEY: Well, I would repeal and replace it. We're not going to get rid of all regulation. You need transparency, you need to have leverage limits.

OBAMA: The reason we have been in such an enormous economic crisis was prompted by reckless behavior across the board. It wasn't just on Wall Street. Gov. Romney wants to repeal Dodd-Frank. Does anybody think that there was too much oversight and regulation of Wall Street? Because if you do, then Gov. Romney is your candidate. But that's not what I believe.

On Education: Let IDEA and Title I funds follow disabled child

ROMNEY: Well, the primary responsibility for education is, of course, at the state and local level. But the federal government also can play a very important role. I agree with [the principles of] Race to the Top, not all of them, but some of them I agree with. My own view is, I've added to that. I want the kids that are getting federal dollars from IDEA or Title I--these are disabled kids or lower-income kids--I want them to be able to go to the school of their choice. So all federal funds, instead of going to the state or to the school district, I'd have go, if you will, follow the child and let the parent and the child decide where to send their student.

On Education: No cuts to college funding

OBAMA: This is an example of where our priorities make a difference. I genuinely believe Governor Romney cares about education, but when he tells a student that, "you should borrow money from your parents to go to college," that indicates the degree to which there may not be as much of a focus on the fact that folks just don't have that option.

ROMNEY: Mr. President, you're entitled as the president to your own airplane, but not to your own facts. I'm not going to cut education funding. I don't have any plan to cut education funding and grants that go to people going to college. I don't want to cut our commitment to education. I wanted to make it more effective and efficient. And I don't just talk about it. Massachusetts schools are ranked #1 in the nation. This is not because I didn't have commitment to education. It's because I care about education for all of our kids.

On Energy & Oil: $2.8B oil subsidy better than $90B green energy for losers

ROMNEY: First of all, the tax break for oil companies is $2.8 billion a year. And it's actually an accounting treatment, as you know, that's been in place for a hundred years.

OBAMA: It's time to end it.

ROMNEY: In one year, you provided $90 billion in breaks to the green energy world. Now, I like green energy as well, but that's about 50 years' worth of what oil and gas receives. And you say Exxon and Mobil. Actually, this $2.8 billion goes largely to small companies, to drilling operators and so forth. But, you know, if we get that tax rate from 35% down to 25%, why that $2.8 billion is on the table. That's probably not going to survive you get that rate down to 25%. But you put $90 billion, like 50 years' worth of breaks, into solar and wind, to Solyndra and Fisker and Tester. I had a friend who said you don't just pick the winners and losers, you pick the losers.

On Government Reform: Trickle-down government is not the answer

Now, I'm concerned that the path that we're on has just been unsuccessful. The president has a view very similar to the view he had when he ran four years, that a bigger government, spending more, taxing more, regulating more--if you will, trickle-down government--would work. That's not the right answer for America. I'll restore the vitality that gets America working again.

On Government Reform: Regulation is essential; but it's excessive and outdated

ROMNEY: Regulation is essential. You can't have a free market work if you don't have regulation. As a businessperson, I need to know the regulations. You couldn't have people opening up banks in their garage and making loans. Every free economy has good regulation. At the same time, regulation can become excessive.

Q: Is it excessive now, do you think?

ROMNEY: In some places, yes. Other places, no.

Q: Like where?

ROMNEY: It can become out of date. And what's happened with some of the legislation that's been passed during the president's term, you've seen regulation become excessive, and it's hurt the economy. Let me give you an example. Dodd-Frank includes within it a number of provisions that I think has some unintended consequences that are harmful to the economy. One is it designates a number of banks as too big to fail, and they're effectively guaranteed by the federal government.

On Health Care: Shift Medicaid to states, plus inflation, plus 1%

ROMNEY: I would like to take the Medicaid dollars that go to states and say, you're going to get what you got last year, plus inflation, plus 1%, and then you're going to manage your care for your poor in the way you think best. One of the magnificent things about this country is the whole idea that states are the laboratories of democracy. Don't have the federal government tell everybody what kind of training programs they have to have and what kind of Medicaid they have to have. Let states do this.

OBAMA: Governors are creative. But they're not creative enough to make up for 30% of revenue on something like Medicaid. What ends up happening is some people end up not getting help.

ROMNEY: If a state gets in trouble, well, we can step in and see if we can find a way to help them. The right approach is one which relies on the brilliance of our people and states, not the federal government.

On Health Care: Restore $716B in Medicare cuts

ROMNEY: That's $1 for every $15 you've cut. They're smart enough to know that's not a good trade. I want to take that $716 billion you've cut and put it back into Medicare. By the way, we can include a prescription program if we need to improve it. But the idea of cutting $716 billion from Medicare to be able to balance the additional cost of ObamaCare is, in my opinion, a mistake.

On Health Care: No change to near-retirees; Medicare vouchers for young

OBAMA: I don't.

ROMNEY: Again, that's for future people, not for current retirees.

OBAMA: In fairness, what Gov. Romney has now said is he'll maintain traditional Medicare alongside it. But those insurance companies are pretty clever at figuring out who are the younger and healthier seniors. They recruit them, leaving the older, sicker seniors in Medicare. And the traditional Medicare system will collapse.

ROMNEY: What I support is no change for current retirees and near-retirees to Medicare. And the president supports taking $716 billion out of that program.

Q: And what about the vouchers?

ROMNEY: For people coming along that are young, what I do to make sure that we can keep Medicare in place for them is to allow them either to choose the current Medicare program or a private plan. Their choice.

On Health Care: Give young people a choice of Medicare or private insurer

ROMNEY: For people coming along that are young, allow them either to choose the current Medicare program or a private plan. Their choice. They get to choose--and they'll have at least two plans that will be entirely at no cost to them. So they don't have to pay additional money, no additional $6,000. That's not going to happen. And if the government can be as efficient as the private sector and offer premiums that are as low, people will be happy to get traditional Medicare or they'll be able to get a private plan. I know my own view is I'd rather have a private plan. I'd just as soon not have the government telling me what kind of health care I get. I'd rather be able to have an insurance company. If I don't like them, I can get rid of them.

OBAMA: Medicare has lower administrative costs than private insurance; private insurers have to make a profit.

On Health Care: ObamaCare has unelected board making health decisions

OBAMA: The irony is that we've seen this model work really well in Massachusetts, because Gov. Romney set up what is essentially the identical model.

ROMNEY: We didn't put in place a board that can tell people ultimately what treatments they're going to receive.

OBAMA: This "unelected" board is a group of health care experts to figure out, How can we reduce the cost of care in the system overall?

ROMNEY: To bring the cost of health care down, we don't need to have a board of 15 people telling us what kinds of treatments we should have. We instead need to put insurers, hospitals, doctors on target such that they have an incentive: performance pay, for doing an excellent job, for keeping costs down.

OBAMA: This board that we're talking about can't make decisions about what treatments are given. That's explicitly prohibited in the law.

On Health Care: ObamaCare is too expensive, and it has killed jobs

ROMNEY: I sure do. It comes from my experience. The number of small businesses I've gone to that are saying they're dropping insurance because they can't afford it, the cost of health care is just prohibitive. So it's expensive. Second reason, it cuts $716 billion from Medicare to pay for it. I want to put that money back in Medicare for our seniors. Number three, it puts in place an unelected board that's going to tell people ultimately what kind of treatments they can have. Fourth, small businesses were asked, what's been the effect of Obamacare on your hiring plans? And 3/4 of them said it makes us less likely to hire people. I just don't know how the president could have come into office, facing 23 million people out of work, rising unemployment, an economic crisis, and spend his energy and passion for two years fighting for ObamaCare instead of fighting for jobs for the American people. It has killed jobs.

On Health Care: RomneyCare was bipartisan; ObamaCare was pushed through

ROMNEY: I like the way we did it in Massachusetts. In my state, we had Republicans and Democrats work together. What you did instead was to push through a plan without a single Republican vote. As a matter of fact, when Massachusetts did something quite extraordinary--elected a Republican senator to stop ObamaCare, you pushed it through anyway. So entirely on a partisan basis, instead of bringing America together and having a discussion on this important topic, you pushed through something that you and Nancy Pelosi and Harry Reid thought was the best answer and drove it through. What we did in a legislature 87% Democrat, we worked together; 200 legislators in my legislature, only two voted against the plan by the time we were finished. What were some differences? We didn't raise taxes. You've raised them by $1 trillion under ObamaCare.

On Health Care: RomneyCare is national model, but only state by state

OBAMA: Governor Romney said this has to be done on a bipartisan basis. [ObamaCare] was a bipartisan idea. In fact, it was a Republican idea. And Governor Romney said "what we did in Massachusetts could be a model for the nation." I agree that the Democratic legislators in Massachusetts might have given some advice to Republicans in Congress about how to cooperate, but the fact of the matter is, we used the same advisers, and they say it's the same plan.

ROMNEY: The right answer is not to have the federal government take over health care and start mandating to the providers across America. That's the wrong way to go. The federal government taking over health care for the entire nation and whisking aside the 10th Amendment, which gives states the rights for these kinds of things, is not the course for America to have a stronger, more vibrant economy.

On Homeland Security: Protecting life & liberty means a military second to none

OBAMA: The first role of the federal government is to keep the American people safe. That's its most basic function.

ROMNEY: The role of government is to promote and protect the principles of the Constitution and the Declaration of Independence. First, life and liberty. We have a responsibility to protect the lives and liberties of our people, and that means a military second to none. I do not believe in cutting our military. I believe in maintaining the strength of America's military. Second, in that line that says we are endowed by our creator with our rights, I believe we must maintain our commitment to religious tolerance and freedom in this country. That statement also says that we are endowed by our creator with the right to pursue happiness as we choose. I interpret that as, one, making sure that those people who are less fortunate and can't care for themselves are cared by one another.

On Jobs: My priority is jobs: small businesses employ 1/4 of workers

ROMNEY: The small businesses we're talking about, with regards to 97% of the businesses are not taxed at the 35% tax rate, they're taxed at a lower rate. But those businesses that are in the last 3% of businesses happen to employ half of all the people who work in small business. Those are the businesses that employ one quarter of all the workers in America. And your plan is to take their tax rate from 35% to 40%. The National Federation of Independent Businesses has said that will cost 700,000 jobs. I don't want to cost jobs. My priority is jobs.

On Tax Reform: I am not proposing a $5T tax cut for the rich

ROMNEY: First of all, I don't have a $5 trillion tax cut. I don't have a tax cut of a scale that you're talking about. My view is that we ought to provide tax relief to people in the middle class. But I'm not going to reduce the share of taxes paid by high-income people. High-income people are doing just fine in this economy. The people who are having the hard time right now are middle-income Americans. My #1 principle is, there will be no tax cut that adds to the deficit. But I do want to reduce the burden being paid by middle-income Americans. That also means I cannot reduce the burden paid by high-income Americans. So any language to the contrary is simply not accurate.

On Tax Reform: To close loopholes: Perhaps allow any deductions up to $25K

ROMNEY: What I do is the same way that Tip O'Neill and Ronald Reagan worked together some years ago. Reagan laid out the principles that he was going to foster. My principles: I want to bring down the tax burden on middle-income families. I'm going to work together with Congress to say, OK, what are the various ways we could bring down deductions? One way, for instance, would be to make up a number, $25,000, $50,000. Anybody can have deductions up to that amount. That's one way one could do it. One could follow Bowles-Simpson as a model and take deduction by deduction and make differences that way. There are alternatives to accomplish the objective, which is to bring down rates, broaden the base, simplify the code, and create incentives for growth.

On Technology: Stop the subsidies to PBS, even though I like Big Bird