Pawlenty Says Foreign Investors Should Take Priority Over Military if U.S. Defaults

Former Minnesota Gov. Tim Pawlenty raised some eyebrows this past weekend with a comment on the debt ceiling during an appearance on “Political Capital With Al Hunt,” which aired on Bloomberg Television.

Incredibly, the Minnesotan said that foreign investors should be paid before U.S. military personnel if a deal on the debt ceiling can’t be reached before the August 2 deadline.

As of January, foreign investors, including the central banks of China, Japan and the U.K., owned a staggering $4.5 trillion, or about 32 percent, of the country’s $14.1 trillion debt.

As of June, the U.S. debt climbed to $14.4 trillion.  With the August 2 deadline looming, little headway has been made between President Barack Obama and congressional leaders in negotiating a long-term deficit reduction plan that would pave the way for nervous House Republicans — influenced by unrealistic Tea Party-driven standards — to support an increase in the federal debt ceiling, which has already reached the maximum $14.3 trillion legally permitted.

“You have to take away the false choice between a default to outside creditors and raising the debt ceiling or doing it incorrectly or unwisely,” Pawlenty said. “Of course the outside creditors [should be paid first]…Then the military, and then the rest,” he said.

Pawlenty is on record opposing an increase in the debt ceiling and believes the government can avoid default without raising it by making necessary “structural changes.”

Pawlenty, who never served in the military — in fact, he’s never lived outside the same twenty-mile radius of South St. Paul — didn’t explain why foreign investors should take priority over the military in the event that the U.S. reaches its debt limit.

Pawlenty’s controversial comment stands in stark contrast to that of fellow Minnesotan Michele Bachmann, who co-sponsored legislation in the U.S. House last week prioritizing payments to members of the Armed Forces in the event the U.S. reaches the debt limit.

H.R. 2496 specifies that salaries and other allowances to both active and reserve members of the Armed Forces should be prioritized if the debt limit is reached, requiring special appropriation of funds to make those payments.