01/19/2012 02:05 pm ET Updated Mar 20, 2012

Here Comes Newt!

On the eve of the South Carolina primary the Republican race has been turned on its head by two developments that may have a profound impact on the campaign. The question now is can frontrunner Mitt Romney beat off the surging Newt Gingrich to win his party's nomination?

Texas Governor Rick Perry withdrew from the presidential race because he was not getting any traction with South Carolina voters and he didn't want to help split the conservative vote and hand Romney a sizable win Saturday. Instead, he threw his support to Gingrich saying, "I believe Newt is a conservative visionary who can transform our country."

Perry acknowledged that he and Gingrich have "had our differences," but he went on to say, "I have no question that Newt has the heart of a conservative... with the ability to rally and captivate the conservative movement." This was a clear message to voters that he believes Romney is not a true conservative.

Gingrich's record as Speaker of the House has been under assault by negative Super PAC ads in support of Romney. And questions have been raised about Gingrich's personal life, including a claim by his second wife the he asked for an "open marriage." Perry seemed to address these criticisms in his remarks. "Newt is not perfect, but who among us is," Perry said. "There is forgiveness for those who seek God, and I believe in the power of redemption for it is a central tenant of my Christian faith."

Propelled by his recent debate performance, Gingrich has been closing the gap in recent polls taken among South Carolina voters. On the other hand, Romney has been seeing his lead erode over the past few days. To make matters worse for the former Massachusetts Governor, on Thursday the Iowa Republican Party revised their final caucus totals giving Rick Santorum a 34 vote lead over Romney. No longer can Romney claim he won an unprecedented victory in both Iowa and New Hampshire. Game on!

Gingrich wasted no time in embracing Perry's endorsement and in enlisting Perry to lead a "10th Amendment Enforcement Project" that, if successful, would ultimately restore more power to the states while curtailing the role of the federal government. The 10th Amendment says that, "Powers not granted to the federal government nor prohibited to the States by the Constitution are reserved to the States." This is a key issue for many conservatives who may see this as bold and imaginative leadership. But taking power away from the federal government and giving it back to the states is a most controversial and complex issue.

While Gingrich and Santorum both received a big boost to their campaigns on Thursday, Romney has suffered largely self-inflicted wounds over the past few weeks. For example, he fumbled his handling of when and if he will release his tax returns. Under immense pressure he finally admitted on Wednesday that his income tax rate was about 15%, or the rate paid on capital gains that is largely the source of his income from his Bain Capital investments. But are any of those investments parked offshore?

Romney supporters, such as New Jersey Governor Chris Christie, have urged the former Massachusetts Governor to release his tax returns as soon as possible. But the always-opportunistic Newt Gingrich seized the moment by releasing his tax returns on Thursday.

Republican voters in South Carolina now find themselves with a horse race. Will Romney be able to hold on? Will Gingrich be able to rally enough support to pull out a victory? Will Santorum be helped by is narrow victory in Iowa? Will Representative Ron Paul be able to capitalize on the chaos?

There is no question that Romney is now feeling intense pressure and he is on the defensive. In a heated exchange with a protestor on Thursday in South Carolina he called for unity and emphatically denounced those who were dividing the nation. Perhaps he should take a closer look at himself.