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GOV. MITCH DANIELS, R-IND.: Good morning, Chris.
WALLACE: There have been several big developments this week, of course, in Wisconsin, Governor Walker beat back the recall effort. But also in California, two cities -- San Diego and San Jose, those voters passed an initiative to cut back on government worker pensions.
Governor, what's the message?
DANIELS: I think the message is that, first of all, voters are seeing the fundamental unfairness of government becoming its own special interest group, sitting on both sides of the table. And they are also noticing with sadness that when fundamental services -- education and health care and others are diminished because so much money is devoured by very high salaries and higher than those than the taxpayers are earning and more generous benefits, almost bullet-proof job protection and huge pension.
WALLACE: Is this some sort of a watershed what we are seeing right now. Are voters across the country giving state and local officials a green light to go after or at least curtail public unions?
DANIELS: I hope no one thinks of it that way. I hope it means a turning point in trying to re-address the balance. You know, there is a reason that defenders of labor from Franklin Roosevelt to George Meany to many others, always said that unionism had no place in the public sector and it is a necessary freedom in the private sector, but that it was a bad idea in government.
And I think we have seen through its excesses, the one I just mentioned, now visible to voters almost everywhere that it really needs to be brought under control and the interest of people who pay taxes and who would rather see those taxes, more of them, dollars go to vital services.
WALLACE: Are you saying that you would like to see no public worker unions?
DANIELS: I think really government works better without them. I really do. You know, in our state, we had a 16 year run with so- called collective bargaining. And we did end it.
And I want to say that although it led to the savings of large amount of tax dollars, it was not principally about that. We had 160 pages of shackles really on government's ability to deliver better. And seven years later we are delivering services. We could never made the reforms tied down to 160 pages of thou shalt not.
WALLACE: Well, give me an example how have services improve since you cut back on the unions.
DANIELS: If you deserve a tax refund, it comes twice as fast it used to. Our state parks are in a dramatically better shape than they were. And if you go to our Bureau of Motor Vehicles last month, you are out in less than 10 minutes and 97 percent of the time when we surveyed them, customers say they are satisfied.
WALLACE: Well, let's look at what you have done as governor of Indiana. It is a long list. Let's take a look.
In 2005, you ended collective bargaining rights for state workers on first day in office. In 2011, you restricted teachers bargaining rights. In 2012, this year, you signed a right to work law that said people don't have to join a union to get a job.
It sounds, Governor, like a pretty concerted effort to break public and private unions.
DANIELS: I don't see it that way at all. Now, I will say that on the government side, we felt if we were going to do right by taxpayers and if we were going to make government work effectively as it does in Indiana, there was a survey last year in which 77 percent of Hoosiers said they thought the state government was effective. It's the second highest number in the country. If we do those things we have to have freedom to move resources where they were need, move people where they were needed, pay people on the basis of their performance and not simply their seniority, and we are doing that in the state now, I think to a very positive affect.
Right to work in the private side is a different disagreement, Chris, and there, it is simply a matter of bringing more jobs to the state. Indiana has been winning two-thirds of the time to get a shot at new jobs. We have been rated as one of the best jobs climates in the country by everyone now.
But, there was a very large percentage of the time and a third of all of the opportunities, we didn't get a shot at because the businesses were their own reasons insisted on this freedom.
So, two separate questions as we saw them -- we're not going after anybody. We're just going after better government and more jobs for people in our state.
WALLACE: But to take a look at this and all the reforms as you would call it. Government workers in your state have taken a hit. Indiana ranks 46th in state worker gross salary. And public employees in Indiana must pay more for health care coverage than they used to. I mean, they have paid a price because of all of your actions.
DANIELS: I disagree completely. Particularly those who have been rated the best performers and the highest raises by far in state history, in fact, ever in state history. I think we have a fair system now. State workers praise them all of the time. I think the ones that I encounter are rightly proud of the job we are doing.
And as I just mentioned, their fellow citizens appreciate them here in a way that maybe is not the case elsewhere.
WALLACE: But how -- what about this figure I just gave you. Indiana ranking 46 in the 50 states in state worker gross salary.
DANIELS: I don't know where they come from and I've never seen them before. I can't comment on them.
WALLACE: I mean, have in fact -- you know, we have a lot of information in terms of gross salary and in terms of the cost to the state worker and health care benefits that those have gone up a lot?
DANIELS: Well, Chris, all I can tell you that we believe that the most effective state government in America. We have very low turnover, lower than before, among our state employees. Maybe that says something.
We think we have the best health care plan anywhere. It is one which is leading to much lower increases in costs. By the way, 93 percent of Indiana state workers have a health savings account. They are accumulating tens of millions of dollars that they control on those accounts and they are renewing in a high rate -- satisfaction rate every year. So, we're not really believing that we have done anything but improve the lot of Indiana public employees.
WALLACE: Let's take a look, Governor, at the big picture, and it's almost a philosophical question. Don't unions have a place in this country and even in the case of state workers, public workers, and with government, to make sure that management, in this case, government, doesn't run roughshod over them?
DANIELS: Once again, we differentiate between the two sectors. Absolutely, there is a place in the private sector and I think there are some issues here. Their problems didn't start with Scott Walker there.
There is a 40 or 50-year decline in union membership. The world of work has changed. Workers have changed and unions I don't think haven't changed sufficiently to go with them.
So, as you know, private sector membership is under 7 percent now and that can't be blamed on Scott Walker or frankly anyone else in public life. Again, on the government side, honest people can differ. But I think there is a fundamental problem with government becoming its own special interest groups, force dues, recycle in politics to elect compliant and friendly politicians in an unending circle.
And ultimately, there is not really bargaining in those situations, because government sits on both sides of the table.
WALLACE: Looking ahead to November, is there a danger for the Republicans? The Obama campaign is just out with a new ad that we put up in a second that, in effect, says that Mitt Romney has become the enemy of working men and women. Let's take a look at the clip.
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MITT ROMNEY, REPUBLICAN PRESIDENTIAL CANDIDATE: It is time for us to cut back on government and help the American people.
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WALLACE: Governor, is there a danger of a backlash?
DANIELS: You know that ad could be read cynically as simply playing to the core constituency of the president, which is government itself and people who profit from it.
But honestly I conclude over the years, it's not that. That it's just sadly symptomatic of indirectly blind spot he has. He doesn't understand where wealth and jobs come from. It comes from a successful private sector or not at all.
You know, we've got the biggest government and the weakest recovery on record. I think honestly, the president -- this week he said, if I read correctly and to my amazement, he said the private sector is doing just fine. It's government that needs more money.
Well, government doesn't create wealth or income. It just shuffles it around and charges a price and cost for that service or disservice.
WALLACE: Let me interrupt for a second because in that news conference on Friday, the president said one way to boost the recovery is for Congress to pass his jobs act. And specifically he asked for $35 billion to save or create 300,000 jobs for teacher and first responders.
I take that you don't think that's a good idea.
DANIELS: I don't, been there and tried that, to the tune of $800 billion in the so-called stimulus bill, which is overwhelming not the new bridges and roads and infrastructure that some of us thought might be the idea. It was overwhelmingly just more money shoveled into government.
Now, this is tire and discredited theory. But I do think that the president sincerely believes it. And there I guess a fundamental disagreement that the American people will have to settle this fall.
WALLACE: Finally, we have less than a minute left. After his victory this week, Governor Walker of Wisconsin said that he had some advice for Mitt Romney. He said it is not enough for him to run simply as anti-Obama this fall. That he has to run as a reformer.
And he went on to say this -- "He," meaning Romney, "has to offer a plan. He has to show a willingness to take on the big challenges facing the country. I think he can win if he does that."
Is Walker right? And does Romney need to offer a bold, affirmative agenda?
DANIELS: Yes, absolutely for two reasons. One, that's the most successful campaign strategy for him. The American people I think will rightly demand to know something more than he's not President Obama.
But secondly, he's got to use this fall as an opportunity to build a consensus across, I hope, a broad spectrum of Americans to make the big changes we need, to restore a vibrant private sector. And all the good things that come with it, including more dollars for government.
So, that's exactly the right advice. It would be I think a huge mistake for Republicans to misread Wisconsin as some kind of great harbinger. I don't see it that way at all. I mean, there was clearly a threat of "enough already" vote there that said it is an abuse of the process with all of the recalls. Not even clear that Governor Romney will be that strong in Wisconsin.
So, he better have an affirmative and constructive message and one of hope. I think that he will, and that's why I think ultimately he'll prevail.
WALLACE: Governor Daniels, we want to thank you so much for coming in today. Always a pleasure to talk with you, sir.
DANIELS: Thanks, Chris.
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