As debt ceiling negotiations race towards their thrilling conclusion, Tim Pawlenty is calling on Republicans to avoid tax increases at all costs, even it means default.
At a Bloomberg lunch with reporters, Pawlenty compared the debt standoff to his time as governor of Minnesota, in which he shut down the government when negotiations with the Democratic legislature broke down. Asked whether he would be willing to “blow it up” in the debt negotiations with Congress and risk a default, he said “I did blow it up, in Minnesota.”TPM asked Pawlenty whether Republicans should raise the debt ceiling if their only two options are default or a deal that includes higher taxes. He replied that the party cannot and will not offer any concessions on revenue and that America may need a “dramatic moment” to effect the “quantum change” the country needs. Pawlenty isn’t a fan of Mitch McConnell’s proposal to raise the debt ceiling with no cuts or new taxes by ceding Congressional authority to President Obama, which he labeled “unhelpful.”
He suggested that President Obama’s threat to scuttle a smaller, short term deal indicates that President Obama is also willing to accept default if he doesn’t get what he wants.
“Don’t say this is the crazy man in the basement,” he told reporters.
Part of Pawlenty’s willingness to blow up debt talks is his belief that a default crisis might not be so bad and could be mitigated by the Treasury Department prioritizing their payments, a notion that’s gained traction among Republicans in recent months. It is largely rejected by economists, investors, and ratings agencies across the political spectrum, who warn a failure to raise the debt ceiling in time could plunge the economy into a second recession.
Pawlenty also defended his economic proposal, which included a call for 5% economic growth a year, from widespread criticism that it was overly optimistic and vague. He said the 5% number was a “stretch goal” and noted some observers, including CNBC’s Larry Kudlow, were supportive.