Pawlenty Econ Plan Rooted In Bullish 5% Growth

CHICAGO (AP) — Republican presidential candidate Tim Pawlenty pitched an economic plan Tuesday that includes deep cuts in personal and business taxes to spur the struggling U.S. economy but would add to deficits in the short term in the hope that badly needed jobs would follow.

The former Minnesota governor’s plan aims for a bullish 5 percent annual growth that would balance the federal budget while forgoing trillions of dollars in tax revenue. Pawlenty’s pitch assumes the benefits of his plan would kick in and eventually make up for its initial costs.

His own team acknowledged the assumptions were aggressive. One critic called it “patently ridiculous.”

“Growing at 5 percent a year rather than the current level of 1.8 percent would net us millions of new jobs, trillions of dollars in new wealth, put us on a path to saving our entitlement programs,” Pawlenty said in his first detailed speech on economic policy since he formally declared his White House ambitions a little over two weeks ago.

The economy averaged 4.9 percent growth between 1983 and 1987, and grew at a 4.7 percent rate between 1996 and 1999. A sustained annual growth of 5 percent for a decade would be unprecedented in modern times.

“It’s patently ridiculous,” said Michael Ettlinger of the liberal Center for American Progress. “It’s not worth serious discussion. … No one serious thinks that’s possible,”

The Washington-based think tank projected Pawlenty’s tax plan would cost $7.8 billion over a decade.

Pawlenty said his plan would translate to $3.8 trillion in new tax revenue that would reduce the deficit by 40 percent.

Pawlenty’s plan also would simplify individual tax rates to just three options and cut taxes on business by more than half. His cuts go further than House Republicans’ recent proposal, which the Tax Policy Center said would cost about $2.9 trillion over the next decade.

Obama adviser David Axelrod said he had not reviewed the details but said Pawlenty seems to be proposing new tax cuts for rich people and collectively would produce huge new deficits.

“He wants to replay the same formula that got us into the jam in the first place, and I don’t think the American people want to go back to that,” Axelrod said.

Pawlenty didn’t back down even though Democrats say the previous two rounds of tax cuts added trillions of dollars to the deficit.

“You’ve got to look at it in isolation,” Pawlenty told reporters after his speech at the University of Chicago. “Did the tax cuts have a positive effect under Kennedy, Reagan, Bush the second? The answer is yes.”

In a speech heavy on specifics, Pawlenty proposed a three-tier income tax system:

— The estimated 45 percent of U.S. households that did not pay income taxes in 2010 would see no change in their tax rates.

— Individuals would pay 10 percent tax on the first $50,000 of income. Couples earning $100,000 would also pay that rate.

— “Everything above that would be taxed at 25 percent,” Pawlenty said.

He said he wants to cut business taxes from the current rate from 35 percent to 15 percent, and he called for dismantling vast pieces of the government.

“We can start by applying what I call the Google Test,” he said. “If you can find a service or a good on Google or the Internet then the federal government probably doesn’t need to be doing that good or service. The post office, the government printing office, Amtrak, Fannie Mae and Freddie Mac were all built for a different time in our country and a different chapter in our economy when the private sector did not adequately provide those services. That’s no longer the case.”

Pawlenty’s economic speech also kept an eye on presidential politics: He blamed Obama for an anemic economy. He said Americans are ready to innovate and create jobs, but “they have been discouraged and weighed down by President Obama’s big government and heavy-handed regulations.”

“The president is satisfied with a second-rate American economy produced by his third-rate policies,” Pawlenty said. “I’m not.”

Pawlenty said he would require a vote in Congress to extend any regulation or he would cancel it. And he proposed that taxes on investments, bank interest, stock dividends and inheritances should all be zero — popular suggestions among fiscal conservatives.

Pawlenty has pitched himself as a tough talker since he formally joined the race. Within days of announcing his campaign, he went to Florida to promise an overhaul of Social Security and Medicare, programs sacrosanct to the state’s seniors. In New York, he told Wall Street a Pawlenty presidency would not bail out investors. And in Iowa he promised to phase out subsidies to corn-based ethanol, a deal breaker for many in a state that relies on those federal dollars for a way of life.

On Tuesday, Pawlenty reminded his audience of university students of his risk-taking rhetoric.

“I’ve proposed capping and block-granting Medicaid to the states entirely, raising the Social Security retirement age for the next generation and I’ve proposed slowing the rate of growth in defense spending,” he said. “We can’t really trust Congress to do it. There’s no historical record.”

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

  • G Dog

    If anyone knows “third rate”, it’s Timmy Tempertantrum”.

    • GOP 4 Life

      Yes, let’s talk about Tempertantrum. Seems Mr Dayton has been pulling that a lot lately when he doesn’t get his way with the budget.
      Or let’s look at those brave Democratic senators in WI and the act they pulled when they didn’t get their way.

      Get a clue G Dog. At least the GOP doesn’t run and hide from the real issues

      • Jim

        I don’t see Dayton pulling temper tantrums. I see a governor willing to compromise and the GOP unwilling to stray from their platform of tax dollars for rich stadium owners and banning consensual same-sex adults from getting married. (That’s really helping the economy, by the way. Thanks, GOP!)

        I’m not sure what the situation in Wisconsin has to do with a story about a Tim Pawlenty speech, but I understand that Republicans want to distract Minnesota voters from the issues in front of them at all costs. “Look over there!” should be the GOP slogan for 2012.

        • Mr. M

          TOTALLY AGREED to Jim’s statement!!!

      • Robb

        Then why did Timmy shift budget decisions from his administration to the next one?

      • GOP is a Cult

        Yea Pawlenty was so good on the budget he lost our AAA bond rating

      • kieron

        Your username should be GOP 4 Lie.

  • Brian

    Exactly. I love how he thinks his ideas to balance the budget are so grand, yet in 8 years here he couldn’t get it done. I can hardly wait until the Republican party drops him (and Bachman) like a hot rock, once they realize voters think they’re lunatics.

    • Mr. M

      True and fully agreed. What a bunch of JOKES… or as others have called them “Throw Aways”.

  • Lord Love a donkey

    Ask yourselves….WHERE was pawlenty-the-pinhead during MOST of his last term???? NOT IN MINNESOTA
    WHERE was pawlenty-the-pinhead when the tornado went thru North Mpls, or even afterward???? NOT IN MINNESOTA!
    Ya really want to vote for a man who apparently doesn’t care for his HOME STATE?
    He didn’t/couldn’t be bothered to make a statement during his all important announcement, about what was going on back here.
    Pack it in pawlenty ya self absorbed jerk!
    I’d say worse, but I was raised better.

  • WHAT?????

    I agree Brian but I would go even further. Not only could he not balance the books here but he blew through all the money that MN got from the tobacco lawsuit and through the rest of the surplus. The GOPers that say he is responsible with money do not look too hard into his past as he was not a “save for a rainy day” kind of Gov like they want to remember. His economic mentality is that of a high school student where he spent thinking that everything was disposable income and then some. I await the people that say otherwise and then I ask that they look into it instead of just saying “that is a lib talking point” as this seems to be all that they can come back with because reading the truth will make them cry.

  • GOP

    I love it when people tell the truth about our President. It’s really hard for those libs to stomach the truth! Whether he is capable of running this country (he probably isn’t), at least he is speaking the truth!

    • Paul

      Pawlenty wouldn’t know the truth if his tongue came notarized

    • WHAT?????

      Thank you GOP for doing exactly what I post. Nothing to add to the conversation except the “lib” comment that we have all come to know and love since there is no real info that you can share that makes this sound any better for your party. Therefore you need to pass blame and outrageous claims that have no backing or base. I just didn’t think you would respond so fast to prove my point.

    • Teapublicus Moronus

      You watch Fox…listen to Palin..Beck…Limbaugh……you know nothing of the TRUTH!!!

  • wtdbuck

    that wasn’t truth GOP that was an opinion.

  • Common Man

    T Paw, did a great job by putting the breaks on the runaway liberal spending train. He is correct on Obama’s admin as Obama has done nothing right in three years. It will be fun to watch all the liberals crying in 2012.

    Go T Paw, Go Conseratives. Cut spending, cut business taxes and fire Dayton and Minnesota will have prosperity.

    • Matt

      Common, I’m a fellow conservative but I can’t stand Tpaw. He won’t even address the cuts that NEED to happen, just cut taxes and take on dept. He’s a hack and needs to go, he couldn’t do it as govener and won’t do it as president.

  • Liz

    I’m still trying to figure out how the president (or any individual government official) is solely responsible for the economy… Why can’t anyone tell me specifically using examples?

    Why didn’t I save my college econ notes?

    • Sick of liberal talking points

      You might as well save that question Liz because I have asked it many times and never got an answer. Everyone is quick to spew the garbage but not back it up with facts or by answering questions that might be to tough for them to figure out.

      • llp

        Is’n that what you are doing right now

    • Jack

      You create an environment of stability for one. Busniness must know what future cost are going to be such as energy, healthcare, wages, taxes, etc. so they know how to budget. Obama has done the opposite with unknowns in healthcare (Obamacare), energy (cap and trade, drilling, anti-coal), wages (union policy), and taxes.

    • Citizen

      @Liz. From all the summer reading I’m doing, it’s becoming obvious to me that a lot of economic woes in the U.S. are directly attributable to tweaking the U.S. tax laws over the last 50 years. Neither party is innocent. Many laws were enacted with the proverbial “good intentions” and many were enacted to reward certain political contributors and industries. No matter the reasons. The end result of the cobbled together U.S. tax code is the present economic mess. I suppose the only real fix is to take a hard look at the tax code. But, after what I’ve read, that scares me, too!

  • Steve

    He pitched himself as a truth teller but was unwilling to offer specifics. Instead, he promised a series of policy announcements that would leave voters convinced he was a policy heavyweight. So says this liar. He left Minnesota in debt. While here as governor he promised no new taxes and yet put in place Fee’s that would (tax) mostly low income people. He is the classic double talking politician. He was not liked by Democrats, Republicans or Independents by the time he fled the state to Iowa to announce a run for higher office. A bad governor would not make a good President. A vote for Pawlenty would insure Obama’s re-election.

  • WHAT?????

    You could have stopped at “He pitched himself as a truth teller but was unwilling to offer specifics.” as he is a republican and if you look at any of them (and some in all parties as well as this is class 101 for carrier politicians, but does seem to be the motive for most GOP). You can also say that for most posters here on all the stories. “Libs libs libs” is all you hear. No ideas, solutions, or conversation, just “libs are wrong, no GOP is wrong” nothing more nothing less. It is kind of sad that people do not feel the need to back up a statement and just expect everyone to believe it and spread the word.

  • Stillwater resident

    I give up …. the only Repub I may have voted for and he goes and does a Bachmann. How do we spell moron?

    T-Paw – don’t be so damn dumb. We got Bachmann already. The GOP has a HTG fistful of idiots, as does the DFL.

  • Common Sense

    Tim ‘The Tool’ Pawlenty. What a putz. We ran this state into the ground for 8 years while building a resume to run for president on our dime and now he knows more than a 100’s of economists predicting 1-3% growth for the next century. Go back to being “Vice President of Looking Out the Window” in private industry. Those who can’t do, run for president.

  • Bryson Powers

    I can’t believe Pawlenty has the nerve to even run with the way he messed up Minnesota. There are two kinds of Republican:Rich and Stupid.

  • Big John

    T-Paw is so funny.

  • Penny

    T-Paw should run as the village idiot.

  • tim

    This, from a man who brags that he didn’t raise taxes, yet we now all pay higher property taxes and user fees. We won’t miss the smug grin, Tim.

  • Zed

    The headline was almost right on ex Gov. Pothole..but they mixed up a letter and forgot the “T”

  • G Dog

    Delusional as usual.

  • Joe

    What I want to know is who’s pulling his strings? Who’s pushing him in our faces day in and day out?

    • GOPSUX

      The answer is Koch Bros. Just like every other gop pos.

  • Incredulous1

    Wow! Am I glad George W. Pawlenty has left Minnesota. Let’s hope he stays away permanently.

  • Richard in Minneapolis

    “You’ve got to look at it in isolation,”

    Nothing exists in isolation. That’s just a fact of life. Get used to it.

  • Traciew

    Two can play the internet game. How about we all google moderate politicians and see who can get things done.

    Everything in moderation….

  • Reasonable

    Herbert Hoover – “A chicken in every pot”
    Tim Pawlenty – “A Unicorn in every yard!”

  • Murph

    Like the tax reductions would go to EVERYONE?… from Tim PAWLENTY??.My legs are long enough already! I don’t need Pawlenty pulling them! You never did anything for everyday people before Tim.You obviously don’t have what it takes to be POTUS!

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