Tim Pawlenty Quits: Former Governor Drops Out Of Presidential Race (VIDEO)

ST. PAUL, Minn. -- Former Minnesota Gov. Tim Pawlenty dropped out of the race for the GOP presidential nomination on Sunday, hours after finishing a disappointing third in the Iowa straw poll.

"I wish it would have been different. But obviously the pathway forward for me doesn't really exist so we are going to end the campaign," Pawlenty said on ABC's "This Week" from Iowa shortly after disclosing his plans in a private conference call with supporters.

Pawlenty senior adviser Phil Musser told The Huffington Post that the Minnesota Republican "just wasn't willing to risk debt to soldier on -- part of why he would have been a good president."

The low-key Midwesterner and two-term governor had struggled to gain traction in a state he had said he must win and never caught fire nationally with a Republican electorate seemingly craving a charismatic, nonestablishment, rabble-rouser to go up against President Barack Obama .

Pawlenty tried to turn up the heat on Obama and his GOP rivals. But it often came across unnatural and he never was able stoked the passions of voters.

"What I brought forward, I thought, was a rational, established, credible, strong record of results, based on experience governing - a two-term governor of a blue state. But I think the audience, so to speak, was looking for something different," he said.

In recent weeks, he withered under the rise of tea party favorite Michele Bachmann, whose rallying cry is a sure-fire applause line about making Obama a one-term president, and libertarian-leaning Ron Paul, as well as the promise of Texas Gov. Rick Perry, the sharp-tongued Texan who entered the race Saturday.

"I thought I would have made a great president," Pawlenty said. "I do believe we're going to have a very good candidate who is going to beat Barack Obama."

He didn't immediately endorse a candidate.

Bachmann was quick to praise him, perhaps mindful of the need to broaden her appeal and reach his backers, who span the ideological spectrum.

"I wish him well," Bachmann said. "He brought a really important voice into the race and I am grateful that he was in. He was really a very good competitor."

The two-term ex-governor of a Democratic-leaning state was on Arizona Sen. John McCain's short list for the vice presidential spot in 2008. He had spent roughly two years laying the groundwork for his 2012 campaign and had hoped to become the alternative to the national front-runner, former Massachusetts Gov. Mitt Romney.

But this summer he unexpectedly found himself in a grudge match with Bachmann, the Minnesota congresswoman who shot to the top of polls in Iowa after getting into the race. Pawlenty struggled to raise money and connect with voters. He poured most of his cash and time into Iowa in the run up to Saturday's straw poll, a test of organizational strength and popularity in the state whose caucuses lead off the GOP nomination fight.

Pawlenty had acknowledged that he needed a strong finish in the straw poll to show momentum and quiet concerns that his campaign was faltering. He put it all on the line, spending the bulk of his campaign account on TV ads ahead of the contest and on a statewide tour of Iowa.

But Bachmann won and got two times as many votes as Pawlenty, who came in well behind the second-place finisher, Texas Rep. Paul.

Pawlenty said his message "didn't get the kind of traction or lift that we needed and hoped for coming into the and out of the Ames straw poll. We needed to get some lift to continue on and to have a pathway forward. That didn't happen."

Even after the poll, Pawlenty suggested to supporters late Saturday night that he wasn't dropping out. He called the test vote here "an important first step on the road to the Republican nomination and, ultimately, the White House.

"This is a long process to restore America - we are just beginning, and I'm eager for the campaign."

Still, he said in a statement after the results were announced: "We have a lot more work to do."

Hours later, he reversed course in the face of a daunting challenge: convincing donors who were slow to give in the months leading up to the straw poll that he was still a viable candidate. Had he stayed in the race, he would have been competing for money in an expanded field as Perry, a prolific fundraiser with deep ties to the party's biggest donors, entered the race.

Said Pawlenty: "We weren't going to have the fuel to keep the car going down the road."

In Iowa, Pawlenty's exit means there's now an available contingent of top GOP staff and consultants, including former state party chairman, former advisers to President George W. Bush and senior advisers to Mike Huckabee's winning 2008 caucus campaign, including Sarah Huckabee, the former Arkansas governor's daughter. Top legislators who had signed on to Pawlenty's camp also now are free to rally behind other candidates.

It's not yet clear the size of the electorate Pawlenty frees up. GOP activists commonly praised his skill and background, but many were holding out until they met other candidates. This was an especially common reaction among a class of pro-business Republicans in Iowa.

On paper, Pawlenty, 50, seemed to have all the right ingredients as a candidate.

His blue-collar upbringing offered him a natural rapport with middle-class America. He governed as a fiscal hard-liner in a left-leaning state, winning his second term in a year when Republicans elsewhere got drubbed. He made inroads with the right crowds and assembled an all-star cast of advisers with loads of presidential campaign experience.

Pawlenty ran a traditional operation. In the lead-up to his campaign, he spread checks around to local politicians in key states through a political action committee while putting a heavy focus on small-scale events in places such as Iowa and New Hampshire.

But Pawlenty struggled to connect. He came off as bland and rehearsed next to more dynamic contenders. He languished in the polls. Perry's candidacy shoved Pawlenty further to the side.

His inability to stoke the passions of voters the way other candidates and even noncandidates have was evident.

"He said the right things, that we're going to limit the size of government and hold down spending," Sam Buck, a retired veteran from Winterset, said last week after hearing Pawlenty speak. "I like him ... but let's see what Perry of Texas does."

Pawlenty had been building momentum after a May campaign launch in which he framed himself as the one in the race willing to deliver the hard truths and confront public policy sacred cows. The climb screeched to a halt in a New Hampshire debate in early June, when he shied away from the chance to back up prior tough talk about Romney when they were face to face. It reinforced worries among some Republicans that he wouldn't be willing to take the fight to Obama as the nominee.

In that same debate, Bachmann declared herself a candidate and immediately cast a long shadow Pawlenty had trouble escaping.

Pawlenty tried for weeks to reel in Bachmann, questioning her accomplishments in office and framing her as a perpetual naysayer. In Thursday's debate, Pawlenty went even harder at her and said all of the major policies she proudly fought came to pass anyway.

"If that's your view of effective leadership with results, please stop because you're killing us," Pawlenty said to her.

That caused some Republicans to question whether he came on too strong.