June 12 (Bloomberg) -- Republican presidential candidate and former Minnesota Governor Tim Pawlenty said his proposal to stoke the U.S. economy to grow at 5 percent each year is an “aspiration” that goes hand-in-hand with his plan to slash taxes and curb government expenditures.
Pawlenty, 50, told “Fox News Sunday” that he would “dramatically reduce spending” on federal programs to pay for tax cuts that may lower revenue by as much as $11.6 trillion over a decade. Achieving 5 percent economic growth each year is a “stretch goal,” he said.
“This is an aspiration. It’s a big goal,” Pawlenty said of his 5 percent annual growth target for the economy. His proposal also would reduce taxes and make cuts to mandatory and discretionary government programs, he said. Taken together, the policies would “unleash economic growth,” he said.
President Barack Obama is “leading from behind” when it comes to addressing the economy, Pawlenty said on the Fox program. “He has run out of ideas,” he said. “We have tried it his way, and it doesn’t work.”
Pawlenty last week unveiled a plan to cut individual and corporate taxes, reduce loopholes and cut spending, in a move that he said would help the economy reach his growth target. The economy hasn’t grown at that rate for a full year since 1984.
Pawlenty’s tax plan would reduce revenue going into the U.S. Treasury by $11.6 trillion over 10 years compared with current law, according to an analysis by the Tax Policy Center, a joint venture of the Washington-based Urban Institute and Brookings Institution.
25% Top Rate
In his June 7 speech at the University of Chicago, Pawlenty called for cutting the top individual tax rate to 25 percent from 35 percent and reducing the top corporate rate to 15 percent from 25 percent. He proposed eliminating taxes on capital gains, dividends, interest and estates and allowing “small businesses” that currently pay taxes at individual rates to pay at the corporate rate.
Pawlenty’s plan would eliminate corporate tax breaks and retain all individual tax breaks. Pawlenty would expand the 10 percent income tax bracket to cover the first $50,000 of income for individuals and the first $100,000 for married couples.
U.S. Representative Debbie Wasserman Schultz of Florida, chairwoman the Democratic National Committee, said in a statement after the speech that Pawlenty’s proposal is “a prescription for economic disaster that would fall squarely on the backs of seniors and working families.” It would cut taxes for 63.6 percent of households and save top 0.1 percent of U.S. taxpayers an average of $1.4 million a year, according to the Tax Policy Center.
The proposed tax cuts in Pawlenty’s plan are much larger than those proposed by House Budget Committee Chairman Paul Ryan of Wisconsin and House Ways and Means Committee Chairman Dave Camp of Michigan, both Republicans.
Former Massachusetts Governor Mitt Romney’s decision to skip an August straw poll in the early voting state of Iowa could create an opening for Pawlenty, who is focusing heavily on the state and must make a strong showing there to have a shot at the Republican nomination.
“If you’re going to be a leading candidate for President of the United States, you’ve got to compete in these early states,” Pawlenty said today. A New Hampshire debate between the Republican candidates is scheduled for tomorrow.
Republicans seeking the nomination to challenge President Barack Obama include Pawlenty, Romney, former House Speaker Newt Gingrich, Representative Ron Paul of Texas and former U.S. Senator Rick Santorum of Pennsylvania.
Herman Cain, former chief executive officer of Omaha, Nebraska-based Godfather’s Pizza Inc., and former New Mexico Governor Gary Johnson also declared their candidacies.
Other potential candidates include Minnesota Representative Michele Bachmann, former Alaska Governor Sarah Palin and former U.S. ambassador to China and Utah governor Jon Huntsman.
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