Humbled Romney Vows to Release Tax Returns

(Reuters) - Humbled by a stunning loss in South Carolina, Mitt Romney said on Sunday he would release this week the tax returns demanded by rivals as he bids to regain the upper hand in the volatile Republican presidential race.

Romney, the longtime front-runner in the Republican race and one of the wealthiest presidential candidates in history, lost to a resurgent Newt Gingrich in the conservative Southern state on Saturday after stumbling badly in debates with clumsy responses to demands that he disclose his tax history.

Trying to recapture his footing as the contest heads to more populous and more moderate Florida, Romney said he would release his 2010 returns and an estimate for 2011 on Tuesday.

We made a mistake holding off as long as we did and it just was a distraction, Romney said on Fox News Sunday.

Romney said the returns would be on the Internet and emphasized he was releasing two years of returns after Gingrich posted 2010 taxes on Thursday.

He slammed Gingrich as a Washington insider, a line of attack he is expected to use going forward, and called on his rival to release details of his contract with the government-sponsored mortgage finance giant Freddie Mac.

Gingrich's work for Freddie Mac could raise concerns for some voters in Florida, a state that has been hit hard by the downturn in the U.S. real estate market.

He talks about great, bold movements and ideas, well what's he been doing for 15 years? He's been working as a lobbyist ... that's selling influence around Washington, Romney told about 300 supporters in a campaign stop later on Sunday outside Daytona Beach, Florida.

Romney's tax announcement was meant to draw a line under a bad week punctuated by his own missteps, a surprising turn in an otherwise tightly scripted campaign.

In the midst of a halting response to the tax return controversy, Romney said he paid a rate of about 15 percent, low compared with many U.S. wage earners but in line with what wealthy individuals pay on income from investments.

Gingrich, a former speaker of the House of Representatives with a sharp tongue that played well in debates, pounced on Romney's weak flank and walloped the former Massachusetts governor by 40 percent to 28 percent in South Carolina.

The Gingrich win reshaped the Republican race and reflected a party sharply divided over how to beat Democratic President Barack Obama in the November 6 election.

There have been three nominating contests so far and Gingrich, Romney and former Senator Rick Santorum have each won one.

A victory in Florida's primary on January 31 would restore Romney's luster after South Carolina, and a Gingrich win would solidify him as a serious challenger to the former business executive. A protracted and poisonous Republican battle, in turn, could be a boon to Obama's re-election bid.

It's hard to see it ending soon. It could drag on to April, said Al Cardenas, the chairman of the American Conservative Union. Cardenas headed Romney's campaign in Florida in 2008, but has remained neutral this time.

When this is over, we are going to have a presidential candidate showing all his warts. We are going to enter into a national election with a candidate whose chinks in the armor are visibly seen, he said.

With 19 million people, Florida presents logistical and financial challenges that may give an advantage to Romney's well-funded campaign machine.

In Florida, he leads Gingrich by 40.5 percent to 22 percent, according to polls cited by RealClearPolitics.com, conducted before Romney's battering in South Carolina. Santorum, a social conservative who won the Iowa contest but has struggled to gain traction since then, is third with 15 percent.

Texas Congressman Ron Paul, who is not campaigning in Florida, is fourth at about 9 percent.

ROMNEY FLOODS FLORIDA

Some Florida voters were delighted by Gingrich's rise.

Eugenio Perez, 58, a Miami property manager, said Gingrich's experience would help him in the White House.

We live in a very complex world and we can't put a novice in such a high place, as we did in 2008, he said.

The more moderate electorate in Florida may help Romney, who has failed to consolidate conservative support despite his longtime front-runner status and had hoped to wrap up the nomination after Texas Governor Rick Perry and former Utah Governor Jon Huntsman bowed out last week.

Facing a real estate crisis and an unemployment rate of 9.9 percent, above the national average, Floridians are also expected to be more open to Romney's argument that he is the type of CEO president the country needs.

I like the fact that Romney is a businessman who has been successful. Some people criticize that but I think that's commendable, said Mike Sullivan, 57, a professional golfer who attended the Romney rally.

Right now, we need a chief executive who can run America like a business and not like the Salvation Army.

The tax release shift and financial advantage could help Romney regain his momentum after Gingrich's win.

A political action committee formed by Romney backers, Restore Our Future, has spent $5 million in Florida for Romney since mid-December, 20 times the amount spent there so far by any other group supporting a Republican candidate, according to Federal Election Commission filings analyzed by Reuters.

Romney could get some help from Santorum, who is competing with Gingrich to be the conservative alternative to Romney.

It's a choice between a moderate and an erratic conservative - someone who on a lot of the major issues has been just wrong, Santorum told ABC's This Week program, saying Gingrich was out of step with many Republicans on Wall Street bailouts, health policy, immigration and global warming. I think he's a very high-risk candidate.

Gingrich has see-sawed in national polls but has shown an uncanny ability to hang on, especially after an exodus of his staff last summer. Now he must prove he is the most electable choice despite hefty political and personal baggage.

Gingrich, who refers to Romney as a Massachusetts moderate, said having his rival's taxes on the table would at least put an end to that part of the campaign narrative.

As far as I'm concerned, that particular issue is now set aside and we can go on and talk about other bigger and more important things, Gingrich said on NBC's Meet the Press.

But the tax issue will almost certainly not go away.

Income inequality has become a leading topic in the presidential race, and Obama has signaled he will talk about an economy that works for everyone, not just a wealthy few in his State of the Union address on Tuesday, the day of Romney's tax return release.

(Additional reporting by Ros Krasny in Coral Springs, Florida, Patricia Zengerle and David Adams in Miami, Terry Wade in Daytona Beach and David Morgan and Andrea Shalal-Esa in Washington. Writing by Jeff Mason and Patricia Zengerle; Editing by Mary Milliken and Peter Cooney)