By Will Dunham
WASHINGTON (Reuters) - Former Minnesota Governor Tim Pawlenty became the first major casualty in the marathon presidential campaign on Sunday while fellow Republicans Michelle Bachmann and Rick Perry built momentum in the race.
Pawlenty, once seen as a strong contender for the Republican nomination to face Democratic President Barack Obama in the November 2012 election, dropped out a day after a disappointing showing in Iowa's straw poll, a key early test of strength among his party's candidates.
Former Massachusetts governor Mitt Romney is the early front-runner in the Republican race, but he must fend off a surging Bachmann -- who won the poll -- and Perry, the governor of Texas who announced his candidacy on Saturday in South Carolina.
Some experts felt Romney might benefit most from the departure of Pawlenty -- neither of whom are favorites of the conservative Tea Party movement that likes Bachmann and Perry.
Pawlenty touted a record of balancing the budget, cutting spending and down-sizing government in Minnesota, but his "nice guy" image failed to gain traction after entering the race in May, particularly among Republican conservatives.
"I wish it would have been different. But, obviously, the pathway forward for me doesn't really exist. And so we're going to end the campaign," Pawlenty told the ABC program "This Week" after his distant third-place finish in the Iowa straw poll.
"You know, I'm from a small state. I don't have a big national financial network or political network," he said.
Bachmann won the Iowa straw poll on Saturday with 29 percent of the vote. Ron Paul, a congressman from Texas, was second with 28 percent and Pawlenty at 14 percent. Romney was on the straw ballot but did not participate.
The straw poll is a non-binding mock election that serves as an early gauge of strength in the state that holds the first 2012 Republican nominating contest -- the Iowa caucuses scheduled for next February.
Bachmann and Perry both appeared at the same Republican dinner in Waterloo, Iowa, on Sunday evening, in a preview of a possible matchup between two candidates who appeal to the same conservative base of the Republican party.
"We need to be focused on jobs in this country. We need to focus on getting our economy working again and I (have) got a track record on doing that," Perry said, raising a main theme of his campaign -- his job creation record in Texas.
Following Perry at the podium, Bachmann, a U.S. congresswoman from Minnesota, said she had to come back to her hometown to thank supporters for helping launch her campaign in Waterloo 50 days ago.
Obama's approval rating fell below 40 percent for the first time in Gallup's daily tracking poll. Thirty-nine percent of Americans approve of the job Obama is doing as president while 54 percent disapprove, according to the poll published Sunday.
Obama departs on Monday on a campaign-style swing through Iowa, Minnesota and Illinois -- three states seen as vital to his 2012 re-election campaign.
The trip followed a brutal period of bad news that dented confidence in Obama's leadership, particularly after a bitter partisan debate over raising the U.S. debt limit and a downgrade of the U.S. credit rating.
In a round of appearances on the Sunday morning U.S. political news programs, Bachmann defended her credentials to be president and called herself a leader in Congress fighting against Obama's agenda.
Critics question her accomplishments in Congress.
"So being a governor and having governor-level experience isn't the number-one requirement. It's really, who is the person? What is their character?" Bachmann said on ABC.
"What I've demonstrated is that I have a core set of principles that I believe in. I'll fight for them. That's what we need in a president of the United States because a president is more than just a manager," Bachmann added.
Pawlenty said that what he had brought as a candidate was "a rational, established, credible, strong record of results" as a two-term governor in Minnesota. "But I think the audience, so to speak, was looking for something different," he added.
University of Minnesota political scientist Larry Jacobs said Pawlenty's departure "shows the Republican voter is angry and has moved in a pretty conservative direction."
On NBC's "Meet the Press," Bachmann sidestepped a question on whether she would seek the endorsement of fellow Minnesotan Pawlenty. "I'll be calling him today to wish him well. And he brought a very important voice to the race. I have a lot of respect for the governor," Bachmann said.
Perry's candidacy could steal support from Bachmann, replacing her as Romney's top rival and potentially bridging the gap between the party's establishment center and right-wing activists.
Pawlenty had been seen as a candidate who could attract vital support from independent voters wary of more conservative candidates in a general election against Obama.
He raised $4.3 million in the most recent quarter, on par with other Republicans jockeying to run against Obama but lagging well behind the $18 million brought in by Romney.
(Additional reporting by Lisa Lambert and Eric Beech in Washington and Todd Melby in Iowa; Editing by Todd Eastham)