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WASHINGTON – On the eve of her entry into the 2012 GOP presidential race, Rep. Michele Bachmann said "scare tactics" are being used by those warning of an economic calamity unless Congress raises the government's borrowing limit by an August deadline.
The three-term congresswoman from Minnesota said the U.S. could avoid a default by paying only the interest on U.S. obligations while lawmakers work on a deal to cut spending dramatically as part of a new debt ceiling.
Such an approach has been derided as unworkable by Treasury Secretary Timothy Geithner.
Bachmann, a tea party favorite, planned to kick off her campaign Monday in her Waterloo, Iowa, her birthplace. The Iowa Poll released Saturday night by The Des Moines Register showed her in a statistical tie with Republican rival Mitt Romney among likely caucus-goers.
In an appearance Sunday on CBS' "Face the Nation," Bachmann said she found the poll gratifying but noted that the race for the nomination was just beginning.
The poll showed Romney with 23 percent support and Bachmann with 22 percent among those who said they were likely to vote in the nation's first Republican nomination contest.
The top five included Georgia businessman Herman Cain, at 10 percent, and former House Speaker Newt Gingrich and Rep. Ron Paul of Texas, with 7 percent each.
President Barack Obama planned separate meetings Monday with Senate leaders as negotiations on trimming spending and raising the debt ceiling moved into a new stage. Talks among lawmakers of both parties ended last week when Democrats and Republicans reached an impasse over whether there should be any role for additional revenue in reducing the deficit.
Officials say the nation's borrowing will exceed its $14.3 trillion limit on Aug. 2 and that economic shockwaves around the world would result from the first financial default in U.S. history.
"It isn't true that the government would default on its debt," Bachmann said on CBS. She later added, "It is scare tactics."
Geithner, she said, "can very simply pay the interest on the debt first, then we're not in default."
Geithner has dismissed the idea that the U.S. could avoid a default by just paying the interest on the national debt and picking which bills to pay, contending that even trying to do so would roil financial markets and make it more expensive to finance what the government does owe.
"There is no responsible path that avoids default, avoids catastrophe to the economy, that has us decide as a country, we're going to stop paying all our obligations so we can pay interest," Geithner told the House Small Business Committee last week. "It doesn't work. It's not workable. And it will not relieve Congress of the obligation of raising the limit."
Bachmann said she wasn't willing to allow the government to keep borrowing money and putting the country into a worse state.
"One year from now, we'll be back, having this same conversation," she said. "That cycle has to stop."
Although she once suggested that ending the minimum wage would be a boon to employment, Bachmann declined to say she would advocate that position as president and instead would ask a group of economists to consider the idea.
"I think everything needs to be on the table right now, every part of government," she said.
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