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Giannoulias: Being A 'Fiscal Hawk' May Be Kirk's Biggest 'Whopper'

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Kirk said that the biggest change Obama had brought to the country since taking office as president is "a tremendous amount of debt."

"I think that represents a long-term danger," Kirk said. "I've become very much of a fiscal hawk here." He added the stimulus has "largely failed" and that this Congress has been "very viciously anti-business." He said the country needs a "pro-growth" agenda instead.

Giannoulias countered by positioning himself as the outsider candidate in the race. He said that the economy needed more liquidity, and that the country needs to focus on things like green jobs for growth. "I think one of the problems, quite frankly, is we have typical Washington D.C. politicians who have forgotten what it's like on Main St," he argued. "If you're thrilled with out of control spending... Congressman Kirk is your man."

On tax cuts, Kirk argued that "they should not have new big tax increase on Dec. 31." He added, "The key danger here, is will our policies increase the chance of a double dip recession." He said his priority was the "deficit of jobs, and economic growth. And especially this perception that the United States could be falling behind. Especially Asian economies."

But Giannoulias said the country couldn't afford extensions to the Bush tax cuts for the wealthiest Americans, and that this is a "fundamental public policy difference" between him and Kirk. "He says he's a 'fiscal hawk.' Look, the Congressman has told some real whoppers during this campaign, but that may be the biggest one of all," Giannoulias stated. "My question for the Congressman is, which county do you plan on borrowing 700 billion dollars from? The Saudis? China?"

Kirk said he'd pay to maintain the tax cuts by "by spending reductions across the board. By cutting out whole programs. And making sure we have a new set of mechanisms" like a line item veto proposal. Kirk called it "ironic" for Giannoulias to question his record on fiscal conservatism. "In front of The Chicago Tribune, they asked him, name one spending bill that you would actually vote to cut. He couldn't name one," Kirk said.

When asked what spending cuts they'd each make, Giannoulias led off by saying that he's waiting for the advice of Obama's deficit commission.

"What the deficit commission says in December's going to be important to answer your question," he said. "I would have voted against the omnibus spending bill, which included thousands of earmarks, a lot of pork. And quite frankly, this is where the President made a mistake."

Kirk said he did not back Rep. Paul Ryan's (R) proposed cuts to Medicare and Social Security. "I have my own cuts, which I want to put forward," he said, like selling off parts of the Tennessee Valley Authority. "I very much worry right now that if we're embracing an European-style, very high debt, very high tax environment, we will suffer all of the slow-growth problems that they've had," Kirk said.

Both candidate said they had problems with the the new health care law. Kirk pushed the alternative proposals he had previously drafted, while Giannoulias called the law "far from a perfect vehicle," but defended coverage for pre-existing conditions, for example, of things the bill did right.

Then came the inevitable questions about trust and character that have dominated this race for months. Giannoulias has had to deal with the fall-out from failure of his family bank, Broadway Bank, where he was once a loan officer, and the revelation that the bank gave loans to crime figures while he worked there. Kirk has had to answer for a series of embellishments he's made about his military record.

Giannoulias answered first about his role and history at his family's bank. He even tried giving the story a populist spin: "You know what, while I'm very fortunate, and my family's very fortunate, I know what it's like to lose a family business, because of this recession," he said.

But host David Gregory pressed him to say if he knew that his bank was giving loans to criminal figures. "As I continue to say, if knew then what I know now," Giannoulias replied. But did he know there were crime figures getting loans? "As I've said, we didn't know the extent of that activity."

Kirk took the opportunity to provide a counterargument to Giannoulias' charge that the Congressman is out of touch with the private sector. "I was in the private sector, I did work," Kirk said "But I'll tell you the private sector experience that I don't have: I don't have experience in loaning money to mob figures. I don't have experience in reckless loans to commercial real estate."

The discussion then turned to Kirk's misstatements about his military record, and he took a apologetic tone. "I made mistakes with regard to my military misstatements. I was careless. And I learned a very painful and humbling lesson," Kirk said. "The level of scrutiny here is completely appropriate, because this is a very high office."

The TPM Poll Average for this race shows Kirk leading Giannoulias 41.3%-40.0%.