Pawlenty: Fiscal cliff already weighing on economy


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While the expiring tax cuts and automatic spending cuts that make up the cliff do not take effect until the beginning of 2013, Pawlenty said he is hearing from financial firms that businesses are already halting business activity because they are not sure what will happen.

For example, 61 percent of JPMorgan's U.S. clients are altering their hiring plans because of the cliff, and 42 percent of fund managers for Bank of America identify it as their greatest investment risk.

As a result, Pawlenty urged Congress to quickly adopt policy that disarms the threat of the cliff, giving policymakers time to craft a deficit-reduction proposal in early 2013.

Like other business groups issuing warnings on the cliff and the deficit, Pawlenty steered clear of weighing in on the most contentious policy matters, such as how to address tax rates on the nation's top earners and entitlement programs.

"The federal debt needs to be addressed in a comprehensive and bipartisan manner that supports, not undermines, economic growth. We need spending reform, including entitlement reform," he wrote. "We also need tax reform that encourages growth and investment. It will not be easy. But it needs to get done."