I didn't think this was for real when I first saw reference to it, but here's the clip. According to the Huffington Post, his staff today, as Sandy raged, reaffirmed this position.
"Absolutely," Romney said in this primary debate. "Every time you have an occasion to take something from the federal government and send it back to the states, that's the right direction. And if you can go even further, and send it back to the private sector, that's even better. Instead of thinking, in the federal budget, what we should cut, we should ask the opposite question, what should we keep?"