Related story: Romney: Gingrich will fade during long race

MARK TAPSCOTT: From the very beginning of this race you've drawn support from about 25 percent of Republican voters and there's been a succession of “not Romney” shooting stars, if you will, who shot up and then down. What do you think is the reason you've stayed in this 25 percent area of support?

MITT ROMNEY: I don't know the answer, in part because I am not a political scientist, a pundit who evaluates why people move in one direction or another. I am a conservative business guy with a message to the American people that I think is compelling. And if so I'll be the nominee and the president, and if not I'll go back to business. And so I have theories that I hear various people say different things. I hear some say, ‘look, you're well known,’ – I'm well known – ‘people know who you are, they saw you last time around, there’s an image of who you are, as other people come around they project on them a sense that they are exactly like who we are as voters, and we give them a lot of support, and then comes the agonizing reappraisal as we get to know them and their strengths and their weaknesses and their numbers may trail off. Some trail off more precipitously. Others will come off in a more gentle manner.’ But I stay about the same.

I hope that as we move into the final phase of the campaign, which is really the time for me to make my closing argument, that my support will build, that other folks see their numbers come down, and that I'll get the votes I need to get the nomination. But it’s not a process which will be over in a day. As you know this is a, we have Iowa, New Hampshire, but we also have South Carolina, Florida, Nevada, Colorado. I'd need to get about 1100-plus delegates. So I expect to keep on campaigning through this process through the ups and downs, and while someone may go up temporarily, my experience is that I can't guarantee that they will go down in a month, but I can guarantee that they will be down in three or four months. And I just need to make sure that I'm getting the delegates at the time they are being awarded.

MICHAEL BARONE: Governor, you called for a lower, flatter tax rate on a broad base. Would you agree to cap or eliminate deductions for home mortgage interest, state and local taxes, or charitable deductions.

ROMNEY: [Laughs] You want to know precisely what the plan looks like and I have not laid out that plan, and what I've described that what I will do immediately is bring down the corporate tax rate to 25 and eliminate the tax on interest dividends on capital gains for people earning $200,000 and year or less. And then you're right. I say that what I'd like to see is a setting where we have a flatter, lower, tax rate. I do get some inspiration from the Bowles-Simpson work where they did not eliminate those mortgage deductions and the like, but they eliminated them – excuse me, they limited them. And by virtue of the limits they put in place, they were able to bring down the rates and make the system flatter and simpler. That has some merit. But one of the things that I did not support in their plan was to raise the capital gains tax, as you may recall, they lowered taxes on ordinary income. They raised the tax on capital gains interest and dividends. That's not the direction I'd head, but the concept is saying, let’s limit deductions and deductibility of certain expenses, had merit in my view. But in my view the process of actually changing the tax code and going toward a system of that nature is going to take something more than a president saying this is what I want to do in my first 100 days.

BYRON YORK: Governor, on health care, you've often said that the health care plan that you've created in Massachusetts would be a good model for some other states. You said, “Maybe not every state, but most.”

ROMNEY: I don't think I said “most,” but --

YORK: On “Meet the Press” in 2007.

ROMNEY: Oh did I? Did I make that exaggeration? [Laughs].

YORK: So, what are some of the states that today would benefit by adopting the system that you created in Massachusetts?

ROMNEY: In its entirety? Not very many. Because it’s not even perfect for Massachusetts. At the time we created it, I vetoed several measures, and said these I think are mistakes, and I think that you and Massachusetts will find  you have to correct them over time. But that's the nature of a piece of legislation of this nature, you'll see what works, what doesn't, you make the changes, but they have not made those changes, in some cases they've made things worse. So I wouldn't encourage any state to adopt it in toto. However, there’s some principles that a lot of states could benefit from.

I do think, for instance, that the idea of an exchange where individuals are able to purchase insurance, not just through their company but also individually, by being able to access a wide range of options from different insurance firms, that makes sense. Could that be done entirely privately? Yeah. Ours was a public-private kind of partnership where the insurance firms in our state contribute personnel, and knowhow, to an agency that is set up that allows people to access those different insurance policies and then one other thing that was important. There was a, and I can't remember the code, specifically in the Department of Labor regulations: If people are paying a health care premium to a state-qualified entity, then they get the same tax treatment as if their corporation was buying their insurance for them. In other words, they’d pay in pre-tax dollars.

So we found that if let’s say if a sole proprietor, of a convenience store, wanted to buy his or her own insurance, they would normally pay in after-tax dollars, but by going through this little “conduit” we called it -- we changed the name to “exchange” -- they actually got to pay in pre-tax dollars. So the exchange one, made it tax advantageous, and number two, it gave people access to insurance and insurance companies that they would not have had access to as individuals. We found that big insurers like Blue Cross and Blue Shield and others didn't have interest in sitting down and meeting with people one at a time. They were designed to market to big organizations. The exchange allowed people to be marketed to one at a time. I just happen to think that for the long term for the country it’s very wise for people to be able to own their own insurance as opposed to have it purchased for them by their employer.

Right now, no one thinks that they would want to have anyone but their employer buy their insurance. But if you think about it over time, they say 'wait a second,' it would be nice to have my own policy, to get it on a tax advantage basis and then carry it with me from job to job. If I get fired the policy stays with me, and the insurance company I choose will have an incentive to keep me healthy, because they know that I'm likely to keep this policy for years and years and years. Oh, and my favorite thing, I can fire them if I don't like them.

YORK: But you wouldn't recommend that any state adopt the plan that was adopted in Massachusetts in its entirety?

ROMNEY: In its entirety, no. But there are principles that I think that are helpful and instructive for the states to learn from and I think that there are other states that have picked up some portion of what we did.

PHILIP KLEIN: You’ve said that on day one of your presidency, you would grant Obamacare waivers to all 50 states, as you pursue full repeal. But under the language of the health care law, waivers are subject to a number of restrictions, and wouldn’t apply until the year 2017. So what immediate and specific relief would your executive order provide for individuals and businesses, assuming it’s issued on January 20, 2013?

ROMNEY: Well, I will certainly pursue repeal, and that’s something which will occur if we have a Republican House and a Republican Senate, my guess is it could be done pretty close to day one. If that’s not the case, and I have to go through the waiver process, we will do our best.

Our lawyers think that providing a state a waiver that we will be able to conform with the law and that the state would be able to opt out of the system, but if a lawsuit ensues, and it takes months to sort it out, well during that time hopefully we will have the bill repealed. I think people recognize that if I’m elected President of the United States, that we are not going to have Obamacare with its full panoply of benefits and costs. The American people don’t want it. I don’t want it. And we’ll repeal it. And if the waiver process is able to successfully stop it in its tracks, as we think it will, great. It doesn’t stop everything of course. Some elements go on. The tax being collected and so forth, that you can’t get out of that by waiver – it requires the ultimate repeal.

KLEIN: But what do your lawyers think as to why these waivers could take place, because I have the law here, and it says that it applies on January 1, 2017 – under the “waiver for state innovation.”

ROMNEY: When you say “it” -- “it applies”?

KLEIN: The “waiver for state innovation” -- under section 1332.

ROMNEY: The waiver for state innovation?

KLEIN: Yes, that’s the waiver that I believe that you’re talking about when you talk about state waivers. That’s what your campaign has said.

ROMNEY: Oh, they say it’s that in particular?

KLEIN: Yeah.

ROMNEY: Then I’d have to have Ben Ginsberg, our lawyer, sit down. If you really want to go into that and tell you what -- if that’s important to you, we’ll have Ben Ginsberg give you a call and talk about what provision of the law we would seek to employ.

DAVID FREDDOSO: Governor, in a recent debate you argued that Newt Gingrich had gotten behind amnesty because he talked about legal status for roughly 11 million people residing illegally in the United States. What is your alternative? Do you support deportation of all of them, all of those residing and working illegally in the United States? 

ROMNEY: What I support is focusing on securing the border and when we secure the border and have convinced the American people that we do not have a flow of illegal aliens coming into the country, then we can address what we're going to do with the 11 or 15 million that are here. I don't think that there is a call for rounding people up and taking them out of the country. I don't think that that’s the process that’s necessary to maintain our system.  I don't want to, however, during this process, say anything that encourages another wave of illegal immigration. And so by as Speaker Gingrich did, that he thinks at some point during this process anything that encourages another wave of illegal immigration. And so by saying, as Speaker Gingrich did, that he thinks at some point people should be entitled to stay here permanently, if you will, a form of amnesty, then I think that he encourages another wave of people coming in and saying, “Hey if you get there and if you hang on long enough, you get to stay.” 

FREDDOSO: Have you not said enough to encourage that just now, simply by saying, "Well, once we've secured the border, we can do something?" Is that… 

ROMNEY: I don't think so. I think, in fact, that virtually every Republican I know that's spoken about illegal immigration says the same thing. I listened to Lindsey Graham the other day and he said, "secure the border, stop the flow of illegal aliens into the country, and then we can address the issue of what to do with the people who are here illegally today."  I do have my own thoughts on that. I actually have a plan in mind, I haven't unveiled it. There are other people I'd like to sit down with and review it with me. 

I went down to Florida and met with Jeb Bush six, seven months ago, laid out what I thought would be a complete plan to deal with permanent immigration policies with regards to our legal system to simplify it. Number two, how to deal with those who are here illegally today. And then number three, how to secure the border.  And every piece of advice I've received from people who talk about this topic say get the first job done first, because if you talk about the other jobs you get highly confused with whether you are going to create incentives for people to come here illegally to take advantage of whatever program you might describe.

MICHAEL BARONE: Governor, you said you could support the use of force to prevent Iran from getting a nuclear weapon. What would you do if about the chance that the Iranian people would rally to the present government if the U.S. mounted a military operation? What's the endgame?

ROMNEY: The endgame begins with thoroughly understanding the options that we have. That's not something that I've been briefed upon. I have not sat down with U.S. military and said, all right, lets look at the widest arra yof military options that we have.

One of the reasons that we do that is so that Iran realizes that we're doing that, that we're thinking through those options to consider what they are. If we have plenty of effective options, why, that would be a very fortuitous circumstance. If we have very limited options, that would be more challenging.

Every now and then I hear people say, "Why don't we have Israel go and do it?" I say, well, can Israel go and do it? Do they have the capacity to do it? And of course, part of any discussion of military options is what the military response will be from Iran. So, there are many options that we have but those options that do not result in our being hurt as badly or even worse than what we've carried out, obviously that's not an option that we'd consider.

So I can't tell you Michael what the options would be that would have the most promise for stopping nuclear Iran and at the same time, not resulting in severe retribution on our friends or on ourselves. And so the options range from those that are the most modest, to things like like a blockade of gasoline, to those which are most extreme.

And I meet with a number of former military officers, and they describe their views, but those do not necessarily conform with the realities that I hear from military experts today. But some of those that I have spoken say, Mitt, if you were to think you could go in and surgically take out a few sites, recognize that in doing so you would engender enmity from the people of Iran and a very severe military response. And they describe the kinds of responses that might occur. And their point is therefore if you were actually planning on attacking and taking out certain sites, you'd probably need to think about something far more expansive than just those sites, including decapitating the regime, including an onslaught of attack on the military capabilities of Iran, and so forth.

Well, are those things real or not real? That's something which I could only assess in being able to have a full military analysis, which I don't know if that's been done or not. The interesting thing to me is, I think in order to get Iran to be dissuaded from their nuclear folly, that they need to see crippling sanctions, they need to see efforts behind the scenes at regime change. They need to be treated as pariah throughout the world, I'd indict Ahmadinejad under the genocide convention. I think you go after him in every possible way and they have to see that there is a very high probability that someone's going to go after them militarily if they pursue their course. And that combination has the best prospects in my view of dissuading them from their nuclear ambition.

KLEIN: Your Medicare proposal calls for transitioning to a system which Seniors would be given subsidies towards purchase of health insurance, commonly known as premium support.

ROMNEY: By our friends premium support, by our enemies as "vouchers." [Laughter.]

KLEIN: Exactly. You know now, obviously a key question that's going to determine whether this plan puts Medicare in a sustainable fiscal trajectory is the rate of growth of those support payments. Would the value -- under your plan would the value of those subsidies grow at the standard measure of consumer inflation, or the rate of medical inflation?

ROMNEY: Well it couldn't do the latter or it would have no particular impact on reining in the excessive cost of our entitlement program. It would instead have to be limited in some way and there are a number of possible limits. One is Congressional action -- deciding as Hoover, Heritage and Brooking said a few years ago, we just have a budget. And every year don't call this an entitlement. Every year pass a budget for how much the total subsidy is going to be. And that would then set the limit of how much each person is going to receive. Obviously, I've mentioned that people of lower income would get a higher subsidy than people of higher income.

I also believe that in setting that amount, you would look to see what competition is providing. You will have private health care plans that offer the care of individuals for a certain cost. That will tell you something about the level of subsidy that's necessary. And that competition that exists in the private sector will also inform your thoughts about the subsidy that would be applied to people receiving Medicare. My inclination is that the subsidy opportunity is the same whether you are purchasing a private plan or traditional Medicare. When I say traditional Medicare, Medicare provided by government.

I think it's unlikely that Medicare will remain an open-ended fee-for-service-type product that it is today but I think its more likely to take on a capitated rate or more extensive managed care provisions than you're seeing currently employed.

So my view is your going to limit the growth -- as a principle you're going to limit the growth in the subsidy that goes to this retirement healthcare system based upon the competition that exists in the market and a determination by Congress of the budget amount that can be applied to subsidy.

KLEIN: So you are saying, just to clarify, you would leave it up to Congress to determine it each year or that's one idea that --

ROMNEY: That's one, that's one principle. I think the key principle is this: It's not going to grow at an open-ended rate driven only by medical inflation.

TIM CARNEY: The European Union might be on the verge of an economic meltdown and the U.S. is already getting involved at least indirectly. They opened the Fed window. The IMF, which we heavily fund, is sending money their way. Do you support this Fed and these IMF measures and, if this were still going on when you were inaugurated, what steps -- what US aid -- would you be willing to provide to Europe?

ROMNEY: Not much, because Europe is capable of solving Europe's problems. I actually think that -- I mean, I'm not an economist by training, but what limited understanding of the economy I have suggests it's very difficult to cobble together Greece, Ireland, Italy and Germany with the same monetary policy and highly disparate fiscal policies. I don’t know how they hold it together.

They can probably paper it over through the re-elections in France, and maybe through the election here in the U.S. I think there will be a heroic effort on the part of some just to paper this over, push it down the field as long as possible, but I don’t see how that happens. I think there has to be dramatic structural reform. And whether that is a restructuring of the Euro -- meaning taking it apart, or whether it is instead a restructuring of the fiscal policies of the various nations, something has to give.

So, what to do in the interim? The IMF has been formed to provide international monetary system stability, and I would let it participate in that effort, but would not look for heroic contributions or a massive new level of infusion from the IMF beyond that which is normally required. We provide, I believe, 17 percent of the IMF funds, and I would not prohibit the IMF from fulfilling its normal role. I just don’t think the IMF begins to have the resources to solve the problem in Europe. That’s going to take a sovereign of the nature of Greece. I also don’t believe that we as a nation should step in and try to save various sovereign debt instruments or foreign banks.

If the contagion of sovereign debt default reaches our shores by virtue of banks here, holding, let’s say, Italian debt, I would not bail out those banks. I would let them go through the restructuring process that has long existed in this country, and hopefully let them recover. The only time I see us having to act to – I can’t use the word bailout, that’s an awful word – to support, preserve, that’s the word I’m looking for; I don’t look to preserve individual institutions. But if I thought that all the institutions were going to go under, that there would be a cascade of all the financial system in this country collapsing, then that would be a candidate for action to prevent our currency and our financial system from disappearing.

I don’t think we will face that again as a nation, but I think we did face that at the end of President Bush’s term. I think there was a very real risk that the entire financial system in this country would collapse, implode. And that that action was necessary. Was it identical to what I would have hoped for? No. But was it essential to keep the entire financial system from imploding? I think so.

CARNEY: What role should government have in promoting certain industries or economic activities such as homeownership, or manufacturing, renewable energy or fossil fuel energy, exports, or just advanced technology? What sort of subsidies and incentives do you favor? You had some of these in Massachusetts, I know.

ROMNEY: Very limited -- my answer to your first question. I’m not an advocate of industrial policy being formed by a government. I do believe in the power of free markets, and when the government removes the extraordinary burdens that it puts on markets, why I think markets are more effective at guiding a prosperous economy than is the government.

So for instance, I would not be investing massive dollars in electric car companies in California. I think Tesla and Fisker are delightful-looking vehicles, but I somehow imagine that Toyota, Nissan, and even General Motors will produce a more cost-effective electric car than either Tesla or Fisker. I think it is bad policy for us to be investing hundreds of millions of dollars in specific companies and specific technologies, and developing those technologies.

I do believe in basic science. I believe in participating in space. I believe in analysis of new sources of energy. I believe in laboratories, looking at ways to conduct electricity with -- with cold fusion, if we can come up with it. It was the University of Utah that solved that. We somehow can’t figure out how to duplicate it.

But basic science, in my view, is a way that research can encourage our entire economy. And so, for instance, in Michigan, some years ago -- I think it was in 2007 -- I spoke there and said, you know, I think we ought to embark upon an effort to do analysis on energy research, transportation research, materials research. But again, basic research which could then be either purchased by or licensed by companies foreign and domestic.

CARNEY: For instance, nuclear power right now is getting loan guarantees under both Bush and Obama policies to help develop nuclear power more rapidly. Is that the sort of thing that you would support?

ROMNEY: My inclination would be to do this: It would be to say that – if we went to the nuclear people and they say that, you know, if you could give us our permits in three years, then we wouldn’t need any help. And so what I might be willing to do is say we will either give you your permits in three years or refund the money to you we’ve invested to build the facility or to reach this point. We will, in effect, give a guarantee that you will not be prevented from developing nuclear power by virtue of government's malfeasance and ineffectiveness. And so rather than saying, here, we’ll give you a bunch of money to build a nuclear facility, we would instead guarantee certain government action.

In an area, sometimes it’s hard to find the line between research and development. In the area of nuclear research, for instance, there is discussion of an entirely different technology for building very small nuclear plants that use a pebble-type technology, as opposed to the rods that – you’re familiar with this – there’s a discussion about building a model facility to see if that technology actually works. I actually consider that research. It would be owned by the government; perhaps we’d hire companies to build it; and we’d see if it works. And if so, then that technology could be licensed to any number of companies, again, foreign or domestic, to build facilities here and around the world.

That, again, is if we don’t think that there is going to be sufficient interest in that part of industry to carry out research which has a very high-risk of failure and requires a great deal of resources.

CONN CARROL: are you in favor of phasing out Fannie Mae and Freddie Mac by successively lowering their conforming loan requirements?

ROMNEY: I do favor phasing out Freddie Mac and Fannie Mae. And yet that is easy to say, as I’ve just proved, [laughter] but how to prevent there being an absent mortgage market is something which is going to take some study and work, which I haven’t done yet.

CARROLL: But you’re aware that other country’s have mortgage markets, that people buy and sell homes, without [government-backed] securitization?

ROMNEY: What percent is it now? The vast majority of mortgages being offered today are being guaranteed by Fannie Mae and Freddie Mac.

CARROLL: I think it is 98%.

ROMNEY: That’s troubling to me. The unusual and the most unfortunate aspect of Fannie Mae and Freddie Mac is this idea that they are private enterprises with shareholders who can make money when they are profitable, and executives who get bonuses based on their profit, and they are guaranteed by the government. This doesn’t make sense to me.

It’s like -- one way or the other. You want to be a private enterprise? That is just fine, take the risks associated with being a private enterprise. You want to be a government guaranteed entity? Why, that has a certain logic as well. But the combination of the two does not make sense to me. I don’t see why we need to have government participation in the mortgage market for mortgages to be available to the American homeowner.

CARROLL: Just recently, the Democrats included in their last funding bill a provision which increased loan limits for Fannie and Freddie. Would you veto such a provision? Do you think that's going in the wrong direction?

ROMNEY: To what percentage of the home value?

CARROLL: No, no it was the legal limit so right now it think it was like $629,000 and they upped it to $750,000 something like that.

BARONE: Yeah, many Republicans supported that.

CARROLL: Too many.

ROMNEY: I am not inclined to continue to expand Fannie Mae and Freddie Mac further and further into the market. I would be inclined to pull them back further and further from the market and ultimately to see them replaced by banks and institutions.

I, by the way, have no problem with securitization. That is not, to me, the perilous path that caused our implosion. It was that we had people originating mortgages that had little prospect of being repaid. We had banks cobbling them together without a recognition of the degree of risk involved. We had agencies rating this as AAA paper when it was far from that...It does suggest that the absence of thoughtfulness on the part of rating agencies also contributed enormously to this. We also say that greed contributed to it. I’m sure that’s true as well, but greed is part of our economy. It didn’t just grow up in the last few years.

And of course, the collapse also was in part due to failure in Washington, failure of the Fed to see what was coming. Failure on the part of Barney Frank and Chris Dodd, responsible for committees overseeing these things. Failure on the part of presidents, Republican and Democrat, encouraging more and more people to own homes, and taking great pride in the percentage of homeownership, even when the people had put in virtually no down-payment, were in interest-only loans, and had liar loans. I mean, it just made no sense at all.

I don’t think homeownership is the be-all and end-all of the American dream. I think it’s a wonderful thing to own a home. But in some cases, particularly for people who may be moving frequently, or people who are unable to gather a down-payment, that renting may be a better economic choice for them.

STEPHEN SMITH: Governor, returning to Mark’s first question, some of the pundits that you referred to are now urging that you run a less controlled, edgier campaign, taking on your rivals – specifically, Speaker Gingrich – being more available on the campaign trail to reporters. And I see that you’re going on FOX News Sunday with Chris Wallace. Is that an indication that you’re planning to campaign in a slightly different way in the future, as we go forward here?

ROMNEY: No, actually, it’s an indication that the primaries are upon us. And so we are beginning to advertise, which we had not done before. I think we began a week ago with advertising. We will stay up on the air right through the caucus and primary in Iowa and New Hampshire. We may have a vacation day or two in there, but pretty much on the air.

I will be much more visible. It had been our strategy that, as someone who was among the frontrunners, that if I spent all my time on TV, people would tire of me. I would not be a new and interesting voice, and it was wise to hold back and then come forward at the time when people are focused on the election.

So you’ll see me a lot more than in the past. More on FOX than on the others for obvious reasons. If I become the nominee, you’ll see me less on FOX and more on some of the other networks. That’s just -- it’s not a change of strategy, it’s just a recognition of the audience you’re trying to attract. You know, I’ve been respectful of other candidates through the process, but hardly a shrinking violet. As you know, when Governor Perry came in, I was pretty tough on his positions on Social Security and on immigration, and I think the intensity of that effort generated a retreat from his support.

And so you should expect me to be likewise forthcoming in my criticisms of whoever is leading in the polls, or whoever else I think is standing between me and getting the nomination. And so you know, I will be happy to talk about Speaker Gingrich. I like him, we get along fine. He and I and our wives have been together on a couple of occasions, and I wish him well. I think we are about as different as two people you can find when it comes to the qualities of leading the country. And I think I have, by far, better prospects of being elected and getting the country on track.

I am very concerned that this president is putting America on a path toward appeasement internationally and entitlement domestically. That we go from being a merit-opportunity society to an entitlement society. And it’s going to require a dramatic change in Washington by someone who knows how to lead. And transforming, turning around and leading major enterprises is what I have done throughout my life. And I have only been able to do that by bringing people together and engendering consensus.

And that’s a characteristic of my past. Speaker Gingrich has a very different past, in terms of his leadership style and in terms of his life experience. I spent my life leading enterprises, as head of two different businesses, head of an Olympics, and the governor of a state. The Speaker has a different background.…

CARNEY: I have a bank question.

ROMNEY: A bank question?

CARNEY: Well, a bailout question. You get more money from – your campaign has gotten more money from Wall Street than even Obama’s campaign, as long as you don’t count the DNC money. But you get a lot of bank money. And the banks want there to be a bailout in case they fail. You say you don’t want there to be a bailout.

Do you have provisions, plans to prevent there from being a push for a bailout? Jon Huntsman, for instance, wants to cap the size of banks because he thinks that if they’re big enough, the only advantage they get is an implicit bailout. What do you have as far as bailout prevention measures?

ROMNEY: I can only tell you that I think it’s an enormous mistake for us to bail out individual institutions. And even large institutions can go through a reorganization. It’s been the history of this country that that is the case. What we have assumed as a nation is the risk of a run on the banks, collectively. That is the risk which has been assumed by government in the past. Because no banking institution or group of institutions is large enough to say, “If there’s a run on the banks, we can protect you all.”

That’s why we have the FDIC. And we thought, well, we insure deposits up to $100,000. Yes, but virtually every corporation in America has millions of dollars in banks. And if they all lose their money – if they think they’re going to lose their money – and they all rush to the banks to take out their millions to make payroll, and so forth, and pay their suppliers, why then all of the banks will go out of business. And then the entire financial system collapses.

So our effort has been, and appropriately so, has been to protect the system from a run on the banks. But it is not to protect individual institutions from failure.

CARNEY: And you think that was true of TARP?

ROMNEY: I think the purpose of TARP was to prevent a run on all of the banks. And I mean all of them.

As you know, I spent my life in business. I met and spoke with major enterprises. I was on the board of at least one. We were all taking about getting our money out and where to put it – I’m talking about these institutions that had -- most corporations have tens of millions of dollars in institutions. Goldman Sachs, Morgan Guaranty, J.P. Morgan. And if they think these institutions are going to pull a Lehman, then they’ve got to get their money out so that they can keep paying their people. And when that kind of fear begins to enter into a system, and you have the potential of a complete panic withdrawal, that is when the government stepped in in the 1930’s, and that’s when the government stepped in, in, what was it, 2007?