Since last summer, the budget deficit has worsened and the outlook for jobs and manufacturing looks grim, Pawlenty said Tuesday during a speech at the University of Chicago in which he outlined his economic policy.
"If that was a recovery -- then our President needs to enter economic rehab," he said. "And the American people need to stop his policies. Cold turkey."
Obama's "addiction to spending" must end, Pawlenty said. America needs a president with a growth agenda and his policies make him the man.
"The president wrongly thought the stimulus, the bailouts and the takeovers were the solution. He says they worked. They did not," the former Minnesota governor said. "The president is satisfied with a second-rate American economy produced by his third-rate policies. I'm not."
Pawlenty, who consistently lags behind his better known Republican rivals in the polls, said he wants to grow the economy by 5 percent "instead of the anemic 2 percent currently envisioned."
He said he'd achieve the rate by "creating more economic freedom," starting with overhauling the tax code.
"It's currently an anti-growth … monstrosity [that's] chock full of special deals for special interests," Pawlenty said. "Its main goal seems to be to generate campaign contributions. Not jobs."
He also proposed cutting the business tax rate by more than half, reducing the current rate from 35 percent to 15 percent.
He also recommended eliminating "special interest handouts, carve-outs, subsidies and loopholes" from the code.
For individuals, Pawlenty said he would initiate a "simpler, fairer and flatter tax system overall. I propose just two rates -- 10 percent and 25 percent."
Under his plan, he said, those who now pay no income tax would stay at a zero rate. The first $50,000 for individuals or $100,000 for married couples would be taxed at 10 percent, he said.
"Everything above that would be taxed at 25 percent," the former governor said. "That's it."
In addition, he advocated eliminating taxes on capital gains, interest income and dividends and the so-called death tax.
"Government has no moral or economic basis to claim a second share of the same income," he said.
Turning to spending, Pawlenty said he supported a constitutional amendment that would require a balanced federal budget and would cap federal spending as a percentage of the U.S. economy.
As president, Pawlenty said he would seek temporary authority to freeze government spending and to impound as much as 5 percent of the federal budget until the nation's budget is balanced. He said he would battle against regulations that are "suffocating America's entrepreneurial spirit" and would cut programs that could be handled by private companies.
"We can start by applying what I call the 'Google test,'" he said. "If you can find a good or service on the Internet, then the federal government probably doesn't need to be doing it."
The strength of the country lies in its people, not its government, Pawlenty said.
"Americans believe our country is exceptional and they deserve a president who does, too," he said. "We can fix our economy. Our people are ready to get back to work. We just need to give them to tools to get there -- and get the government out of the way."