* Paul buoyed after strong New Hampshire, Iowa showing
* Third party run could divide Republicans
* DeMint urges party to adopt some libertarian views
By Deborah Charles
COLUMBIA, S.C., Jan 12 (Reuters) - The Republican
Party is faced with a dilemma: how to handle a popular,
unorthodox presidential candidate who wants to do away with the
Federal Reserve and end U.S. military presence overseas.
Ron Paul's libertarian philosophy is resonating with voters
and senior Republicans say the party needs to show respect for
him and grant some concessions to make sure he does not run as a
third party candidate, and take his supporters along with him.
With a tough battle ahead to prevent Democratic President
Barack Obama's re-election in November, Republican politicians
and strategists say Texas Congressman Paul - who has spouted his
anti-establishment views for decades without much success - must
now be listened to, at least in part.
"In this election you can't afford to lose any voters," said
Tony Fratto, a Republican consultant and former deputy spokesman
for President George W. Bush.
Paul pulled in about a quarter of the vote in the New
Hampshire Republican primary Tuesday after winning about 21
percent of the vote in Iowa.
While this was not enough to win, it proved the strength of
his loyal following, much of it made up of young people.
"It's really important for whomever the Republican nominee
is ... to treat the Ron Paul constituency with respect, to not
be dismissive, to appreciate their energy and enthusiasm," said
Paul will not likely have as strong a showing in South
Carolina on Jan. 21 compared to Iowa and New Hamsphire, where
voters relate more to Paul's libertarian, anti-establishment
views. He is given a low chance of winning the nomination and
many of his supporters may not transfer their votes to another
Republican if Paul drops out.
What the party does not want is for Paul to decide to run as
a third party candidate. That would divide some Republicans and
attract independents wanting a change, making it tougher to
defeat Obama in the Nov. 6 election.
A THIRD PARTY RUN BY PAUL COULD 'CREATE HAVOC'
Ed Rollins, a veteran Republician strategist who ran Mike
Huckabee's 2008 presidential campaign and Michele Bachmann's for
awhile in 2011, said Paul needs to know he is being heard.
"If for some reason he's not treated well and chooses to run
as a third party candidate he would create havoc," said Rollins,
who suggested the party have an establishment representative
consult and liaise with Paul.
Senator Jim DeMint of South Carolina, a favorite of the
conservative anti-Washington Tea Party movement, said he thinks
the Republican Party should embrace more libertarian ideas.
"I think one of the things that have hurt the so-called
conservative alternative is saying derogatory things about Ron
Paul," DeMint said on Wednesday in an interview with
conservative radio talk show host Laura Ingraham.
"I don't agree with him on everything, but he is right about
the out-of-control and unaccountable Federal Reserve," said
"If the other candidates miss the wisdom in what he's saying
on monetary policy and limited government, then I think we will
see it's to their detriment because the 20 percent or 25 percent
or so who are supporting him are people that we need in the
Some of Paul's proposals on monetary policy could
be included in the Republican platform, suggested some
strategists who all agreed no other Republican would adopt the
radical foreign policy views Paul espouses like practically
doing away with U.S. involvement overseas and massive military
Paul may already be impacting some candidates' policies.
Mitt Romney, the front-runner who has won in Iowa and New
Hamsphire, has promised deep spending cuts, smaller government
and a new Federal Reserve chairman - proposals that seem
designed to appeal to the radicalized conservative base of the
party enamored of the gold-standard ideas promoted by Paul.
Paul, who is running for president for the third time, and
his supporters insist he is a viable threat to the nomination
but in the end the former obstetrician may just want to be taken
seriously. Perhaps even win a coveted speaking role at the
Republican National Convention.
Rollins said the 76-year-old Paul, who is not likely to pull
out of the race any time soon, could end up a second place
finisher to Romney in the race for the Republican nomination.
"If he's second then you have to give him a speaking role at
the convention," Rollins said, though the Republican
establishment might cringe at the thought of what Paul could say
in a prime-time televised speech.
"I think he will be a force in the convention that the
nominee has to go to and ask 'What do you need not to be a
problem?'" said Cal Jillson, a political analyst at the Southern
Methodist Univeristy in Texas.
If Paul is looking for concessions as a carrot to not launch
a third-party bid, the eventual nominee could include him in
studying the Federal Reserve or give him a role in choosing a
new chairman, suggested Republican consultant Matt Mackowiak.
(Additional reporting by Steve Holland in Greenville and Stella
Dawson in Washington; Editing by Alistair Bell and Jackie Frank)
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