Pawlenty Wants ‘Structural’ Debt Change, Opposes McConnell Plan

Republican presidential candidate Tim Pawlenty criticized Senate Republican leader Mitch McConnell’s last-choice plan to raise the U.S. debt limit as a “Band-Aid on a broken bone.”

The former Minnesota governor said President Barack Obama is “spinning” the public on the debt-limit debate and called on him to “stop lecturing everybody every 24 hours and get the deal done.”

“I wish they didn’t raise the debt ceiling,” Pawlenty said in an interview on “Political Capital With Al Hunt” airing on Bloomberg Television this weekend. He said that if Congress does so, “we need to get something structural that’s meaningful and measurable” to cut spending.

Pawlenty said he doesn’t believe the U.S. will default on its obligations. Treasury Secretary Timothy Geithner has projected the country will exhaust its $14.3 trillion borrowing authority by Aug. 2 without a vote of Congress to raise it. Pawlenty said that if that occurs, he would favor reimbursing foreign creditors before sending military personnel or Social Security recipients their checks.

“Of course the outside creditors” should be paid first, followed by the military, he said.

McConnell’s plan “doesn’t solve the problem,” Pawlenty, 50, said. It would allow Obama to raise the debt ceiling unilaterally if he suggested an equal amount of spending cuts, with no requirement that they be enacted.

‘Top Few’ in Iowa

Pawlenty, who has been focused on Iowa, home to the nation’s first presidential caucuses scheduled for next February, said he must finish in the “top few” of the Aug. 13 straw poll in Ames to be viable as a candidate.

He said late entrants to the Republican presidential field might help determine his viability.

“We’ve just got to show significant improvement,” Pawlenty said. “And part of it is also who else is in that mix.”

Pawlenty defended his proposal to slash individual and corporate taxes, which a Bloomberg analysis found would be the biggest tax cut ever, handing the 0.1 percent of highest earners an average tax cut of $1.4 million a year.

“If you’re into wealth redistribution, vote for President Obama,” he said. “If you’re into growing the economy so the other 97 percent of us can have jobs and pay our mortgages and put gas in our car and get our kids to college, then vote for me.”

Social Security

Pressed on whether his economic plans would require any sacrifice by the wealthiest Americans, Pawlenty noted he is proposing to limit the annual increase in Social Security benefits for higher-income beneficiaries.

Wealthier people are “paying a bucket-load already” in taxes, he said.

Pawlenty also favorably compared his record on job creation with that of two other potential rivals for the Republican presidential nomination, former Utah Governor Jon Huntsman Jr., who is running, and Texas Governor Rick Perry, who is weighing a bid.

“I operated in a blue state, so we’re taking it from way over to the left to something more mainstream,” Pawlenty said. “It’s one thing to rubber-stamp a conservative legislature’s work. It’s another thing to move the needle” in a state like Minnesota.

Asked whether he could envision including gay or lesbian people in his Cabinet, Pawlenty said he could. He said he has had “several appointees” who were gay, even though he is opposed to gay marriage.

“I don’t view that as a reason why you would or wouldn’t pick somebody for a position in office,” said Pawlenty.

To contact the reporter on this story: Julie Hirschfeld Davis in Washington at jdavis159@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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