Tim Pawlenty questions Aug 2 debt ceiling deadline, backs plan to pay China first

Former Minnesota Governor Tim Pawlenty on "The Early Show," Tuesday, June 14, 2011.

Former Minnesota Governor Tim Pawlenty on Monday questioned the Obama administration's assertion that the United States would face economic calamity if Congress does not raise a statutory debt ceiling by August 2.

"They keep moving the deadline back. So we don't know if the real deadline is August or not," Pawlenty said on CBS' "The Early Show."

Treasury Secretary Timothy Geithner has said the United States has until Aug. 2 to raise its statutory limit on how much money the United States can borrow, now at $14.3 trillion. The U.S. actually passed the deadline in May, but the Treasury Department is using accounting measures to run the government in the interim. Geithner had previously set an earlier final deadline.

The presidential hopeful, who placed a disappointing sixth in a weekend poll in Iowa, also said he backs a plan floated earlier this year to pay China and other creditors to the United States before paying other debts, the way a family might pay a mortgage before paying a cable bill to ensure they do not lose their house.

"There's a group of folks who say look, pay the outside creditors first. So there is no default. Take away that concern. Take away that fear. And then have the debate be about the rest of the domestic spending. That is something that I have advocated for many months," Pawlenty said.

Deficit spending "is going to take our country down from within. So we need people to stand strong and say enough, we've had it. Cut up the credit card. I hope Republicans stand strong in Washington and do just that," Pawlenty added.

Sen. Pat Toomey (R-Pa.) earlier this year proposed giving bondholders first dibs on the payments from the U.S. Treasury. Toomey's proposal is popular among the conservative Tea Party wing of the Republican party, but has not been endorsed by the Republican leadership on Capitol Hill.

The Obama administration has warned against Toomey's proposal, as has Federal Reserve Board Chairman Ben Bernanke. Earlier this month, Bernanke, who served as a top White House adviser to President George W. Bush before becoming Fed chief, said such a prioritization move would cause unnecessary concerns in the financial markets and would only buy a short amount of time.

"While debt-related payments might be met in this scenario, the fact that many other government payments would be delayed could still create serious concerns about the safety of Treasury securities among financial market participants," Bernanke said in a speech earlier this month.

Pawlenty dismissed his weak showing in the recent Iowa poll as too early to matter.

"Early polls almost never predict the winner," Pawlenty said, "Iowans are wise folks who make up their minds late in the process and there is a long road ahead."

In the Iowa Poll released Saturday night by The Des Moines Register, former Massachusetts Governor Mitt Romney finished first with 23 percent, a statistical dead heat to Rep. Michele Bachmann's 22 percent. Bachmann is set to formally launch her bid Monday.

Former pizza chain chief executive Herman Cain finished third with 10 percent, followed by former House Speaker Newt Gingrich and Texas Rep. Ron Paul, each with 7 percent. Pawlenty garnered just 6 percent.

Watch Tim Pawlenty discuss his social media strategy.

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    CBSNews.com Deputy Politics Editor Corbett B. Daly is based in Washington. He has worked at Reuters, Thomson Financial News and CBS MarketWatch.