So what has Scott Walker really done in Wisconsin?  Well, he has restricted, not ended, collective bargaining, which will protect taxpayers from way over the market benefit packages that have resulted from the past alliance of politicians and the unions who fund them. We have seen the damage these spiraling and uncontrollable pension and benefit liabilities can do to states many years after they are adapted. Prime examples include Illinois and California where huge unfunded liabilities have led to budgetary crises, threatened credit ratings, and increased interest rates on public debt.  Walker also has brought public employee benefit packages into line with the rest of Wisconsin workers, changing the benefit plans so that state workers will pay into their pensions and healthcare benefits.

While the left attempts to portray the removal of collective bargaining as un-American, the simple fact is that residents entrusted the state with making the right decisions with their tax dollars.  Yet for decades, these states opted to give public unions pensions that would eventually spiral out of control and cause major fiscal disruption to state governments.  For example, Ohio’s unfunded liability could be as high as $166 billion dollars or 35% of the Gross State Product.  

When these plans were awarded, politicians justified these deals because they were literally playing with someone else’s money, and they never contemplated the fiscal damage unfunded pensions could cause down the road.  Now states across the nation are facing fiscal ruin because of these well intended but fiscally reckless deals. Worse, some are calling for the federal government, facing its own ballooning deficit due to entitlement spending like Social Security and Medicare, to bailout these states.

Governor Walker has also taken away the Holy Grail for public employee unions – automatic union due deductions.  With the removal of the automatic deduction, now public employees can make their own decisions on whether or not to pay union dues. Walker is ultimately giving workers the ability to be pro-choice with their union dues and have a fair choice about their union. While this is great for public employees, this is terrible for union bosses.

Governor Scott Walker has shown leadership and courage through a rancorous time, having to deal with an ironic hijacking of the democratic progress by Wisconsin Democrats while fighting the union establishment, unsympathetic media and well-organized progressive groups.  Governor Walker could have followed many other politicians down the road of subservience towards the unions and raised taxes to balance the budget.  Instead, Scott Walker campaigned on fighting for Wisconsin residents who don’t have the luxury of a taxpayer-funded union machine.  And because of his fight, he won, and so did we.

On October 28^th, just days before the November general elections I wrote about four gubernatorial candidates to watch as unconventional politicians. Those included New Mexico’s Susana Martinez, Nevada’s Brian Sandoval, Oregon’s Chris Dudley and Wisconsin’s Scott Walker.  Dudley, a terrific man lost but hopefully will be back to fight again.  The other three won and are already showing results.  I wrote how Scott Walker “demonstrated how to balance a budget consistently without raising taxes.” And he is showing that right now as Governor of Wisconsin.

This nation is faced with frightening deficits and unfunded liabilities.  Federal spending is double what it was ten years ago, and this year’s deficit is projected at $1.6 trillion.  States add another $130 billion of shortfalls this year, and almost all states have large unfunded pension and health care liabilities.

I for one am thankful that governors like Scott Walker are showing how to deal with this looming crisis.

Wisconsin itself is facing a $3.6 billion budget shortfall over the next two years and Governor Walker has proposed real solutions that would decrease the state’s structural deficit by 90 percent. As part of Walker’s plan to tackle Wisconsin’s looming budget crisis, he has made the courageous and crucial decision – like Chris Christie in New Jersey – to bring public employees’ benefit packages down to a more comparable level with those in the private sector.

Robert Costrell writes in the Wall Street Journal that Milwaukee teachers receive 74.2 cents on the dollar in health and retirement benefits. An employee in the private sector receives just 24.3 cents on the dollar. In some cases, the benefits package is equal to half of the total employment package. Costrell found that “the average Milwaukee public-school teacher salary is $56,500, but with benefits the total package is $100,005, according to the manager of financial planning for Milwaukee public schools.”

The reason for these nice gold-plated benefits packages are that in the past politicians never had the courage to stand up to unions and insist that benefits be tied to market realities.  Quite simply it was too easy to kick that political can down the road and let the next Governor or the next generation of taxpayers deal with the mess.  That is not only radically irresponsible; it is a recipe for our country’s ruin.

Charles Krauthammer writes in the Washington Post that “in the public sector, the politicians who approve any deal have none of their own money at stake. On the contrary, the more favorably they dispose of union demands, the more likely they are to be the beneficiary of union largess in the next election. It’s the perfect cozy setup.”

In light of this, Scott Walker has decided to tackle his state’s budget deficit not by raising taxes on hard working Wisconsonites in the midst of an economic downturn but by making desperately needed changes to the state’s benefit and entitlement system. The rising cost of retirement packages and insurance has been identified as a threat to not only states like Wisconsin, but also the United States as a whole.

The response to Scott Walker’s budget from Wisconsin Democrats has been to flee the state and shut down the Senate, halting all floor debate and discussion – one of the hallmarks of our American democracy. In another courageous step, I am pleased to say the The Republican Governor’s Association has wisely decided to support Scott.  For years, the RGA has been a hot bed of ideas and action for practical, conservative governance.  While it has showcased some of the great laboratories of our American democracy, its main function was to get Republican governors elected – and it’s done that quite well over the years.  In an unprecedented step, after seeing millions of union dollars and thousands of outsiders pour into Wisconsin to fight Governor Walker’s good governance, The Republican Governors Association decided that is was time to show the country and the union bosses that we have Scott Walker’s back by launching a an advertising campaign in support of his efforts on TV and online.  This is one of the most important fights of our time and it will impact the lives for generations of Wisconsinites and American to come.  Our leaders must show courage and conviction to take on the tough fights and make the right decisions – and when they do, we must show them our strong and unwavering support.

With only days to go until Election Day, most Beltway reporters and bloggers are focusing on races that will affect what will go on inside the Beltway. Will Republicans come up just short in the House, or will there be a complete landslide? Is the Senate within reach for the GOP? What does a Republican Congress mean for President Obama’s chances in 2012?

All these questions are fine and good. But a lot of political analysts are missing where the real action is for Republicans: in the states with gubernatorial races.

For Republicans in these races, what are important to notice aren’t the usual cliches of using states as laboratories of conservative ideas or how this is laying the groundwork for potential presidential or vice-presidential candidates.

In fact, it’s simpler than that: It’s about the injection of new blood into the Republican Party with so many new faces in these gubernatorial races. And this new blood isn’t just about giving the Republican Party a different look; it’s also about playing in states that pundits only a couple of years ago thought were turning blue or were permanently blue.

There are four Republican candidates for governor who are making waves because all of them have something unconventional to offer:

• Susana Martinez, New Mexico: In June, she became the first Hispanic woman nominated by a major party for governor anywhere in America. One could have thought otherwise, but Mrs. Martinez has a very strong stance against illegal immigration, seeking to get rid of laws that provide driver’s licenses to illegal immigrants. It’s no surprise, though, when you look at her background: district attorney and New Mexico’s prosecutor of the year in 2010.
• Brian Sandoval, Nevada: Another crime fighter, he is running against Sen. Harry Reid’s son. He’s had political experience before as a chairman of the Nevada Gaming Commission and as Nevada’s attorney general earlier this decade. But he took a break from politics and was appointed a federal judge for the state of Nevada in 2005. When was the last time someone gave up a lifetime appointment for the prospect of a four-year term? And, oh yes, he’s also of Hispanic heritage. Isn’t it appropriate that the party of Lincoln would have two outstanding gubernatorial candidates of Hispanic heritage?
• Chris Dudley, Oregon: Mr. Dudley spent his career blocking shots and rebounding in the NBA, while his post-basketball career included the successful opening of a charity organization devoted to diabetic children as well as becoming a wealth-management adviser. With no political experience, he’s taking on a former governor in what should be a very close race.
• Scott Walker, Wisconsin: Unlike the previous three Republicans, Mr. Walker has plenty of political experience: He has been a member of the Wisconsin state Assembly for a decade and Milwaukee County executive for the past eight years. That’s right: a Republican county executive in a very Democratic county. And an executive who has demonstrated how to balance a budget consistently without raising taxes.

But notice the one thread that ties all of these gubernatorial candidates together: None of them is a current or former member of Congress. If there’s any reason to believe in the power of the Tea Party movement and the conservative shift that many independent voters have undergone, I believe this is the most stark. Conservatives and independents (and even some Democrats) aren’t interested in anybody with experience in Washington. Americans are interested in candidates who live, work and raise their families among themselves. Yes, this all comes from an anti-Washington sentiment, but it has produced a young, pro-conservative slate of candidates who can start to do great things within the states they plan on leading.

Democrats are facing the same political consequences as the Republicans in 2006: The loss of the valuable middle, and for precisely the same reasons.

This is dangerous territory for the majority. Voters have reason to be upset with Pelosi’s tricky maneuvering, and they have even more reason to be furious with what’s in the bill.  Unfortunately, while most of the pundits and news media are caught up in the legislative chess match and games of political chicken, almost everyone in official Washington has lost sight of the substance of the debate — the bill does nothing to truly reform health care. 

Our country is torn apart for a bill that covers only 4% of total health care expenditures — it raises costs, taxes and balloons the deficit, all while lowering the quality of care.

What is the real goal of this health care package — to control health care costs or control the market space?  The proof is in the legislation. The Senate-passed bill increases costs and taxes by putting a policy in place that ultimately leads to a government takeover: the regulations are structured in a way that makes it nearly impossible for free enterprise to flourish.

For example, if the goal of this bill was to control costs, why would the legislation penalize younger, healthy workers with a tax when they are precisely the group that diversifies the insurance risk pool for insurance providers, which concretely lowers everyday insurance premiums?    

Not all new proposals and regulations are bad. A good litmus test for any new government initiative is this — regulations should not punish an individual or family because they (or their employer or labor union) choose to pay for premium services. Nor should an individual be punished for choosing nothing. They should be forced to face the consequences of their risky decisions.

At a time when distrust in government is at an all-time high, it is no wonder why there’s such passionate resistance to the heavy hand of government being so involved in such a critically important and personal industry. But with all the focus on process (which the president and Democrats have already lost on), let’s focus on what really matters: lower health care costs for Americans. This bill is not the solution.

The United States is a center-right country. Under most circumstances, few would argue otherwise. If there was any time when this was in question, it was late 2008 when President Obama was elected and the left wing of the Democratic Party had the wind at their backs. The President himself seemed to believe the country had moved substantially to the left. And now his decision to bail out failed companies, try terrorists in civilian courts, and support a government takeover of health care is backfiring. This shouldn’t be a surprise. This is a center-right country.

Those of us who believe in American ingenuity and our ability to compete need to take advantage of this moment. We can’t expect that we will be successful in governing just because the Left has screwed it up so badly. Yes, center-right candidates can and will win elective office again. Maybe soon. But winning office without forging a clear path forward did not serve Obama or his party very well and we should not expect that the American people will forgive us either.

That’s why I am proud to have founded a new organization to make sure we do this right: the American Action Network. We formally launched on Monday, with a kick-off press conference at the National Press Club (watch it here) and on our first full day in existence, we held a symposium called “How to Create Jobs”. John Feehery wrote about in a blog post for The Hill (read it here). Both were very successful and gave me great confidence that we’ve started something very interesting here.

As it happens, I spent three days this month at the Winter session of the Republican Governors Association. This is where sitting governors and candidates for the 2010 races can get together and plan for the coming year. It may not have the grand quality of a packed ballroom, but it is a very exciting thing to be part of, and I have the honor of chairing the Executive Roundtable meetings.

My main takeaway is that we have recruited superb candidates this cycle and I do believe we will enjoy some major victories this year, particularly across the middle of the country. It is not my intent here to comment on all races, but I would like to focus on the Midwest, plus Pennsylvania and Colorado.

For example, I believe Republicans will hold big states like Florida with Bill McCollum. I think we will also hold on to California, likely with Meg Whitman. California has a long history of Republican leadership, of course including Ronald Reagan. And in the Midwest I think we are in very good position to win some back: Right now we are on track to take over governorships in Kansas with Sam Brownback and Oklahoma with Mary Fallin.

But the big news, in my view, is that we will elect Republican governors in six large states that will be pivotal both to the 2011 re-districting and to winning these states in the 2012 Presidential election. These states are Michigan, Ohio, Pennsylvania, Wisconsin, Colorado and Iowa.

The reasons Republicans will win are due partly to public resentment of the Obama Administration’s lurch to the left, highlighted by big government, mounting deficits, and spiraling debt burdens with increasing interest. However, the cause of victories will be mostly due to the quality of candidates. Having spent parts of four decades in and out of politics, I am more convinced than ever that candidate quality really matters, and boy are we loaded. I predict victory in all six of the following:

• Ohio: John Kasich is a proven deficit hawk and a charismatic leader. Ohio is always tough, but John (a fellow Czech-American) will prevail. He will also be helped by a strong and winning Senate candidate, Rob Portman.
• Wisconsin: I have written before about my enthusiasm for Milwaukee County Executive Scott Walker. He has reduced spending, kept a balanced budget, and at age 40 still won re-election in 2008 by a large margin in a very blue county. He is a proven leader who will control spending, and he’ll get to do so at the statewide level next.
• Pennsylvania: Tom Corbett has been an enormously effective as Attorney General, and in his last election received more votes than any Republican in Pennsylvania history. He too will be helped by a winning Senate candidate, Pat Toomey.
• Iowa: Terry Branstad is a proven leader as a former Iowa Governor, and it is fortunate he has decided to run again. His great capacity combined with current Gov. Chet Culver’s unpopularity gives me great confidence in an Iowa victory.
• Colorado: Former Sheriff and Congressman Scott McInnis is the real deal, especially when it comes to creating jobs and controlling spending. Here is a guy who slept in his office during his early time in Congress and who has an unmatched worth ethic, along with a contagious optimism. He will win and also be aided by winning Senate candidate, Jane Norton.
• Michigan: We have a contested primary in Michigan but have truly outstanding candidates battling for the nomination. Whoever emerges as the winner of the primary will win the general election in this most battered and mismanaged of states.

So there you have it – six out of six, and well positioned to create jobs, control spending, and help win these states for the 2012 Presidential candidate. Too optimistic or euphoric? Nope – good candidates really do matter, and we have the best.

P.S. Lastly, I want to say that Gov. Haley Barbour, the RGA’s chairman, and Nick Ayers, the executive director, continue to inspire. They are providing excellent leadership and Republicans will have them and their hard work to thank for the victories ahead. Meanwhile, this was the first time we had newly-elected Virginia Gov. Bob McDonnell. Both led panels at this year’s session and both showed why they are effective leaders. I don’t think the governor’s office is the last stop for either of them.

I came to know Sarah and Todd Palin during 2008 in my role as Finance Chair for the McCain campaign. I felt she performed extremely well under some pretty tough circumstances for anyone running with an “R” by their name. Additionally, I believe Sarah Palin was largely responsible for our lead in the polls in early September. Sure, the Couric interview wasn’t her finest performance – as Sarah herself admits publicly, but I’ve been around the block for a long time and its been years since I’ve seen a national candidate burst on the scene and electrify a party and in some cases a nation as she did last Fall.

As the election came to a close, leaks emerged from our campaign unfairly criticizing Sarah, some in a highly personal way. These leaks were not only false but offensive, and lacking in chivalry and loyalty. Most of all, they reflected poorly on the man we all served, John McCain.

John reinforced my instincts to defend and befriend a fine person who was being unfairly attacked when he called me Friday, November 6, to thank me for my role in the campaign. I was at campaign headquarters counseling our able young finance team on finding jobs and asked John to talk to the group. He thanked them but also commented on how much he disliked the criticisms of Sarah making the rounds in the media.

The Sarah Palin of these criticisms did not, and does not, reflect the person I know. I invited her to be my guest at the Alfalfa Club dinner in late January, and to my delight she accepted. Sarah was a total hit at the dinner, and it was gratifying to see the high regard shown to her by many of Washington’s leading lights. Over the coming months, we stayed in touch, and we remained friends. It has been a pleasure telling people about the real Sarah Palin – a first rate Governor; a gracious, genuine and down to earth woman; and a caring and loving mother, wife, and grandmother.

Now to 2012 – will Sarah run? I have no earthly idea. She doesn’t seem to be making any preparations and is focused on the 2010 runs, but it is smart for her to keep her options open. Her charisma and plain speaking conservative and populist approach have great appeal. That said, if this really were a campaign in waiting, I would think her book release would be in November 2010, vs. November 2009, but what do I know about these things? The bottom line is that we as a party have an embarrassment of riches with a number of extremely capable and well-qualified potential candidates. Mitt Romney has excelled in everything he has done from private equity to the Olympics to governing; and he has huge name recognition and a lot of goodwill built up in the party after coming so close to capturing the nomination in 2008. Tim Pawlenty has an extremely effective record as a two term Governor, he has assembled a first rate team for his political action committee, and he has an appealing, fresh faced demeanor. If he decided to make a run, Governor Haley Barbour would be incredibly formidable. His role as party chair in 1993 when Republicans took back the House and Senate, his proven leadership in the aftermath of Hurricane Katrina, and his effectiveness as chair of the Republican Governor’s Association all evidence his capacity. Governor Mitch Daniels could also be a first tier contender should he decide to run and of course former Governor Mike Huckabee would be in a leading position should he give up his successful television career and run for President.

Please note, all of these contenders, including Sarah Palin, are sitting or former Governors. My view is that the executive experience and decision making authority is important preparation for a successful President. The Presidency, after all, is not just about setting tone and true leadership is not proven by delivering a flawless speech or coining a campaign rally cry. Leadership is tough stuff and these are dangerous and troubled times. All of these potential candidates have a proven record of making tough decisions under duress and achieving success in leading their states. Impossible to say who will run, but it’s great to have so many excellent choices.