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October 7th, 2013
05:56 PM ET

Pawlenty on the debt ceiling: The U.S. can't 'dine and dash'

Congress has just 10 days to raise the nation's $16.7 trillion debt ceiling, at which point the government would run out of cash to pay its bills, an outcome that former Minnesota Governor Tim Pawlenty said could have serious consequences.

"Congress has become a Congress that only acts in a crisis, so now we have a real deadline with potentially cataclysmic consequences if they don't act," Pawlenty said in an interview with "The Lead with Jake Tapper."

"But they are so dug in, there's a chance they could stumble into default. We don't want that," said Pawlenty.

A number of conservatives say the debt ceiling is a manufactured crisis, that the government will continue to take in money from revenue and taxes, even after the deadline. Pawlenty said that is a flawed way of thinking.

"They're arguing about sequencing payments ... we don't have the system set up to do it that way," said Pawlenty. "In some cases, we don't have the legal authority to do it that way."

Conservatives are also saying if the U.S. sequences payments to pay down the debt, the U.S. would not default on everything all at once, that is, it could pay the most important bills first.

"But eventually there isn't enough money to pay all the bills, and the United States of America shouldn't dine and dash," said Pawlenty. "These are commitments that were made in the past. The bills are now due, and you got to pay them."

But when Pawlenty ran for president in 2011, he said, "I hope and pray and believe Congress should not raise the debt ceiling."

At the time, "the so-called extraordinary measures hadn't yet been taken," said Pawlenty.

In other words, said Pawlenty, there was a number of things the Treasury Department could do administratively in advance of a default, such as buy time for further negotiations and discussions.

"(Treasury Secretary Jack Lew) is now saying all of those measures, those extraordinary measures have been exhausted, and the day of reckoning is now here," said Pawlenty.

For our full interview with Tim Pawlenty, watch the video above.

Filed under: Money Lead
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