DNC - Fact Checking Tim Pawlenty's Washington Post Op-ED on the Debt Limit

Today in his Washington Post op-ed, Tim Pawlenty railed against raising the debt limit, claiming his own record in Minnesota provides a better way forward. While he mentions the “historic” $4.56 billion budget deficit” Minnesota faced in 2002, he fails to mention the $6.2 billion deficit he left the state with just a few weeks ago. Pawlenty also fails to mention the “unusual” $600 million line of credit he requested so that Minnesota could pay its bills.  And while Pawlenty does mention the government shutdown that occurred on his watch, he forgets to note that it occurred due to his desire to raise taxes, not cut spending. 


 Minnesota Faces A $6.2 Billion Deficit In The Upcoming 2012-2013 Biennium. “Minnesota is facing a $6.2 billion deficit in the upcoming biennium, up from earlier projections of $5.8 billion. The shortfall represents about 16 percent of the state's two-year budget.” [Minnesota Public Radio, 12/2/10]

  • ·         Star Tribune’s Lori Sturdevant: Pawlenty Is The First Governor In Minnesota’s History To Hand His Successor A $6.2 Billion Deficit Forecast. “No other governor in Minnesota's 152-year history has handed his successor a $6.2 billion deficit forecast along with the keys to the Capitol's executive suite. But if Pawlenty has any remorse or regrets about passing that much trouble along to the next occupant, he didn't display them.” [Lori Sturdevant op-ed, Star Tribune, 12/4/10]

Pawlenty “Wrestled With Budget Problems Since He First Took Office” Partly “Due To The Failure To Enact Permanent Spending Cuts Or Tax Increases That Would Have Balanced The Budget Over The Long-Term” Which Resulted In A “Budget Roller Coaster That Went Mostly Downhill Over The Past Eight Years.” “Pawlenty has wrestled with budget problems since he first took office. It's partly due to a sputtering economy, but it's also due to the failure to enact permanent spending cuts or tax increases that would have balanced the budget over the long-term. That failure meant a budget roller coaster that went mostly downhill over the past eight years. Pawlenty and the Legislature would see a surplus in 2006, when the governor said, ‘We've completed the biggest financial turnaround in Minnesota history.’ But just two years later, the state faced a growing deficit. Pawlenty's main governing principle was not to raise state taxes. With the exception of a fee on cigarettes of 75 cent per pack that he pushed in 2005, Pawlenty did not call for higher taxes during his eight years in office.” [Minnesota Public Radio, 12/22/10]


Pawlenty’s Administration Announced A $1.2 Billion Borrowing And Deferral Plan, Including An “Unusual” $600 Million Short Term Line Of Credit From The U.S. Bank.  “State Management and Budget Commissioner Tom Hanson today confirmed a $1.2 billion state borrowing and deferral plan — one that Senate Majority Leader Larry Pogemiller characterized as the current governor leaving the next governor with unpaid ‘IOUs.’ Hanson told a joint House-Senate committee that the Pawlenty administration needs to borrow about $700 million from various state funds — including Minnesota State Colleges and Universities — and defer another $500 million or so in payments to K-12 schools, the University of Minnesota and corporate refunds to keep the state's budget cash flowing… Commissioner Hanson also told the Legislative Commission on Planning and Fiscal Policy today that the state has arranged for a $600 million line of credit from U.S. Bank for any short-term borrowing that may be needed next year ... when a new governor is in office. Hanson told the committee that New York bond houses are aware of the unusual short-term borrowing mechanism, and he doesn't believe it will adversely affect the state's bond rating. The payment deferrals are known as ‘administrative actions.’ Many were previewed in hearings in July. They have been common mechanisms to aid budget shortfalls. Short-term borrowing is less common… Come spring, according to projections presented to the commission, the state will likely need to borrow money short-term to meet its obligations.” [MinnPost.com, 9/7/10]

 ·         Pawlenty Planned To Delay $141 Million In Payments To Schools, $89 Million In Aid To The University Of Minnesota, And $221 Million In Tax Refunds To Businesses In Order To Ensure Minnesota Can Pay Its Monthly Bills. “Republican Gov. Tim Pawlenty informed state and federal leaders Tuesday that Minnesota will accept about $250 million in federal medical assistance, relieving health care providers and Democrats who feared he would turn it down… Pawlenty's office disclosed that he was taking the money as a panel of senior Minnesota lawmakers convened to hear that his administration would delay hundreds of millions of dollars more in payments to schools and tax refunds to businesses. Without the actions, the state would lack the money it needs to pay monthly bills. Leading Pawlenty budget adviser Tom Hanson told lawmakers that the state might have to borrow money from a bank as soon as December. He guided lawmakers through a chart that showed available cash dipping to $100 million by then. The state strives to keep a minimum $400 million on hand… While the state technically has a balanced budget, money going in and out the door doesn't always match up. In the coming months, Minnesota's cash balance will sink to troublesome lows. The administration is diverting money that normally goes into dedicated accounts, putting off $141 million in payments to 134 school districts, deferring $89 million of aid to the University of Minnesota and delaying $221 million worth of tax refunds to Minnesota businesses until January.” [Associated Press, 9/7/10]

 ·         Pawlenty Claimed The Cash Flow Situation Is “Not Ideal But It's Not That Big A Deal.” “Gov. Tim Pawlenty downplayed the likelihood that Minnesota would need to borrow money to pay its bills, even as his administration prepares to do just that. Pawlenty, a likely Republican presidential candidate, told The Associated Press today that he doesn't think the state will need to tap a line of credit officials are setting up to deal with a cash crunch. Projections show cash levels dipping below a minimum $400 million cushion as soon as December — and that's after his administration juggles business tax refunds and payments to schools and the University of Minnesota to cover state obligations. ‘The cash flow situation, while not insignificant, is simply a temporary cash flow issue,’ Pawlenty said from the Minneapolis-St. Paul International Airport before departing on a trade mission to China and Japan. ‘It's not ideal but it's not that big a deal and it's manageable,’ he said.” [Associated Press, 9/9/10]


 Minnesota Public Radio Fact Check: Pawlenty “Leaves The Impression” That The 2005 Government Shutdown Was A Result Of His Desire To Cut Spending, But “What He Doesn't Say, However, Is That To The Extent The Shutdown Continued As Long As It Did, It Was Because The Former Governor Was Holding Out For A Tax Increase On Cigarettes And An Expansion Of State Gambling.” Minnesota Public Radio’s Bob Collins fact-checked Pawlenty’s recollection of the 2005 government shutdown and wrote, “With his new book out, former Minnesota governor Tim Pawlenty is making the national media circuit, and providing ample opportunity for the people back home to fact check him. In an interview on FoxNews, for example, the former governor discusses the state government shutdown in 2005, saying it should've been longer to further his agenda: The former governor leaves the impression that the governor was primarily interested in cutting spending, and to a degree that's certainly true. What he doesn't say, however, is that to the extent the shutdown continued as long as it did, it was because the former governor was holding out for a tax increase on cigarettes and an expansion of state gambling.” [Minnesota Public Radio, Bob Collins’ News Cut, 1/12/11]