Former Minnesota Gov. Tim Pawlenty says it is worth considering letting states declare bankruptcy to avoid costly pension liabilities.

Pawlenty, a potential presidential candidate, on Monday said cities already can declare bankruptcy. He spoke at a county GOP dinner in New Hampshire.

Pawlenty said he would prefer that voters keep pressure on lawmakers to curb spending and obligations that lead to bankruptcy.

Several states, such as California, are in financial messes in part because of pension liabilities. If bankruptcy were an option, they might work with courts to restructure obligations.

New Hampshire holds the nation's first presidential primary, and potential candidates are starting to visit. Pawlenty says he hasn't decided to run for the White House.