JUDY WOODRUFF: In statehouses across the country, governors and legislators are struggling to balance their budgets in a tough economic climate. Those budget woes played out this week in Wisconsin. The deadlock continued there, as one legislative chamber moved ahead with the governor's proposal to curb labor's power.
Democratic legislators jeered at their Republican colleagues after the Wisconsin state assembly voted to pass an anti-union bill in the early hours of the morning. The measure, which saw three straight days of debate, would strip most public employees of most of their collective bargaining rights.
But it still has to go through the state Senate. And a quick vote is unlikely there. Fourteen Democrats skipped town last week, freezing action in the upper chamber. It's not known when they will return from their suspected hideout in Illinois.
Republican Gov. Scott Walker continued to prod his opposition.
GOV. SCOTT WALKER (R-Wis.): We'd certainly welcome them home. There's plenty of other things we can work on in the future that will bridge the gap that is obviously there now. But again, they were elected to do this job.
JUDY WOODRUFF: Democratic lawmakers from Indiana have also fled to Illinois, camping out at this hotel to dodge votes on their state's pending legislation on labor and education reforms.
WOMAN: I think they thought that we were going to bend and break and come back.
JUDY WOODRUFF: Earlier this week, Republican Gov. Mitch Daniels withdrew his support for a bill that would have severely weakened private sector unions. Even so, the Democratic side of the state legislature still remained empty. After Daniels received criticism from some Republicans for caving, he amped up his rhetoric.
GOV. MITCH DANIELS (R-Ind.): You don't walk off the job, take your public paycheck with you, and attempt to bring the whole process to a screeching halt.
JUDY WOODRUFF: In Washington today, President Obama sat down with a number of Democratic governors, who later commented on the government-versus-union battles across the nation.
GOV. MARTIN O'MALLEY (D-Md.): Whatever Wisconsin or these other states can do to get back into the game of creating jobs, instead of fighting or belittling their public employees, I think is a positive step.
JUDY WOODRUFF: The governors will remain in Washington through the weekend.
And joining us now to discuss the current disputes over public employees and fiscal challenges sweeping the states, Republican Gov. Mitch Daniels of Indiana -- we just saw them in that report -- and Democratic Gov. Brian Schweitzer of Montana.
Gentlemen, thank you both for being with us.
And I just want to point out the sling, Gov. Daniels, is not because you've been in a tussle with Democrats. You had shoulder surgery recently.
GOV. MITCH DANIELS: It's a sympathy ploy. I thought you might take it easy on me.
JUDY WOODRUFF: So, Governor, let me begin with you on the showdown that we have seen in Wisconsin and in your state of Indiana.
You have been very critical of public workers. You used the term privileged elite. You have said that, while others' jobs and salaries in the private sector have gone down, they have seen their jobs and salaries go up.
Are you talking about public workers just in Indiana or around the country, or what?
GOV. MITCH DANIELS: No. It's a national phenomenon. I'm not being critical as much as just stating facts that I think it's important to notice that these folks demonstrating in Madison are not the dispossessed of society.
The average government worker in America earns a lot more than the average private sector person who pays the -- his or her salary. You put the much more generous benefits on top of that, and the gap widens, almost total job security in many, many cases.
And so I think the idea of bringing some balance back to the system is not a bad one. And it's probably a necessary one. Our state happens to be solvent. And Brian does a great job in Montana. But there are a lot of states that are flat broke, and this has got to be part of the solution.
JUDY WOODRUFF: So, are they one of the main causes of the fiscal crisis facing the states?
GOV. MITCH DANIELS: Yes, without question, and particularly those states that have huge pension problems. This is all pretty well-documented.
You know, Judy, by far, the most powerful special interest in America today are the government unions. Their PACs are the largest. The money they donate is by far the most. They provide muscle, as well as dollars. And they are enormously effective. And that's what put a lot of these other -- our sister states in the hole.
JUDY WOODRUFF: Gove. Schweitzer, how do you see these public workers who work in your state and other states?
GOV. BRIAN SCHWEITZER (D-Mont.): Well, two-and-a-half years ago, before the great recession took hold, we were concerned in Montana that we might have a downturn.
So, I went to the public unions and I said to them, look, we're in this together. We can't accomplish the things that we want to do in Montana if we are not able to pay for it. So, I got them to agree. We negotiated no increase in salaries for the next two years, no increase in benefits, no increase in their insurance benefits. They agreed.
And here was the deal. I praised them for doing the work that matters in Montana. I praised them for going first. I cut my own salary by $11,000. And then we started cutting the rest of government.
I guess I'm concerned that a chief executive, like a governor or CEO of a corporation, if you demagogue the people that work for you, if you say you're overpaid and underworked, what does that mean for the morale? I mean, I don't think there is a CEO in America that would start their first day on the job by saying, our people are overpaid. They would challenge them to do more with less.
But you have to work together in order to make a partnership work.
JUDY WOODRUFF: Is that what you're saying Gov. Daniels has done, is demagogue these people?
GOV. BRIAN SCHWEITZER: No, I'm not suggesting that.
I'm saying that, when we negotiate with public unions, we negotiate very tough. Then, when we walk out of that room, we say thank you for continuing to do this work. In Montana, over half of our public employees make less than $40,000 a year. So...
JUDY WOODRUFF: That doesn't sound like the same picture that we just heard Gov. Daniels paint, where he said they are paid very well, they do quite well.
GOV. BRIAN SCHWEITZER: Well, in Montana, over half of our employees, state employees, make less than $40,000.
They teach our children. They take care of our disabled people, and they keep our streets and highways safe. That's what they do.
GOV. MITCH DANIELS: Judy, if I may, I was really talking about a national phenomenon and commenting on the Wisconsin issue that you mentioned to us.
Indiana is in a very, very different place. Now, I have to make it plain, six years ago, when I was elected, I struck down collective bargaining. And we have saved bushels of money doing this. But part of my motive was really not financial. It was to try to make government work better, including paying the best workers a lot more.
The old industrial system, we found on arrival, the biggest, best performer in a group was treated no differently than the worst -- very unfair. And we have delivered very big raises to those who really have performed well.
JUDY WOODRUFF: But to get to your -- you know, the core of one of your arguments is that public workers don't need the kind of union protection that private sector workers may need. Why is that? What's different about them?
GOV. MITCH DANIELS: Because -- because, in this case, in a private sector negotiation, somebody is playing with their own money. In a government negotiation, nobody is.
In fact, the government's representative is playing with your money and our children's money. And that's why they give away too much of it. So, you know, don't take it from me. Some of the heroes that we rightfully celebrate of labor rights in American, Samuel Gompers, Franklin Delano Roosevelt, were unequivocal that government -- that unions had no business in government.
Now, they have gotten there, and in a very successful way.
JUDY WOODRUFF: And, Gov. Schweitzer, how do you see that?
GOV. BRIAN SCHWEITZER: Well, I think, if you eliminate the ability to collectively bargain for our public employees, then they are effectively negotiating one person at a time. And that's why we created collective bargaining in this country.
It is true that some states don't have collective bargaining for their public employees, and some do. It's working very well in Montana. And part of the reason it works in Montana is I say that it is a shared responsibility. And when we get into tough times, I ask them to share the responsibility.
And, in Montana's case, it's worked. We're running balanced budgets. We have a budget surplus. In fact, we have $328,474,612 in the bank today, partly because our state employees are doing more with less.
JUDY WOODRUFF: But just quickly to Gov. Daniels' point that they don't need this kind of union protection.
GOV. BRIAN SCHWEITZER: Well, nobody needs union protection. Every individual worker can go to their boss and negotiate any kind of deal that they want. That's what collective bargaining is all about, so that a group of people collectively have some clout. Otherwise, one by one, you could send people down the road. If they say to you, well, I'm looking for a little bit more benefit, they say, well, then you can hit the -- hit the road, Jack.
JUDY WOODRUFF: Gov. Daniels, let's talk about your budget. You said yourself a minute ago you're doing -- you have cut, what, the debt in the state of Indiana 40 percent from what it was when you came in. You have cut employees. You have put a cap on the local property taxes in the state of Indiana.
At the same time, you have had to raise -- or you did raise the state sales tax. And there was separately a hike in the cigarette tax. Is that example -- does that suggest that, when you do these other things, somehow, still, there has to be some kind of tax increase as part of a package?
GOV. MITCH DANIELS: No.
The sales tax increase was offset about 2-1 by the property tax decrease. It was the biggest tax cut in the history of the state of Indiana. Let me just say that there's another aspect of this that I think has been obscured by the financial crisis in a lot of states.
Actually, my main purpose in moving away from collective bargaining was to have the flexibility to make government work better. You couldn't move a Xerox machine from one room to the next under the agreement that was in place when we got there without the unions' permission. You couldn't reorganize departments. You couldn't outsource any services. You couldn't move to merit pay for the best workers that I mentioned earlier, nothing.
And we have made thousands of reforms that have led to a much better -- I can prove it to you -- service delivery by Indiana state government. If you are owed a tax refund, it comes back twice as fast. If you go to our license branch, you're out in nine minutes. And it was as much trying to serve the public better as it was to save money.
JUDY WOODRUFF: Well, to pick up on that, Gov. Schweitzer, would things move a whole lot more efficiently in Montana if you did the kind of thing that Gov. Daniels did, getting rid of collective bargaining?
GOV. BRIAN SCHWEITZER: Well, we're actually able to do -- we're actually able to do all those things that Mitch just described within our collective bargaining.
We have made our government more efficient. As people retired, we didn't replace them. We found ways of decreasing the delivery of government. We decreased the number of cars and cell phones that people have. We have decreased the amount of travel within state. We don't have out-of-state travel anymore.
So, we have made these efficiencies within collective bargaining. And we have also had the opportunity to find a way of rewarding those that do the best job. So, I don't think it's necessarily just collective bargaining. It might have been the deals that have been made by previous governors before Mitch got there.
GOV. MITCH DANIELS: Do you mind my saying Brian is one of the best governors in America? And he has really had a terrific record. I think he probably would have under any arrangement.
I will say that the unions, the government unions, are very much part and parcel of his party. And there's destined to be, I think, a more cordial relationship when they are negotiating with Brian than perhaps with a governor like Scott Walker.
And so -- but I do want to testify, and I have studied what he does, and he is a terrific governor, and would be regardless of the arrangement.
GOV. BRIAN SCHWEITZER: I'm going to give him five bucks for that.
JUDY WOODRUFF: Well, this is going to turn into -- this is going to turn into a lovefest.
GOV. BRIAN SCHWEITZER: I would hold hands with him, but he doesn't have two right now.
JUDY WOODRUFF: Just quickly, in the time we have left, you're - Gov. Schweitzer, you're going to be meeting with President Obama while you're here. You met with him today. You're going to meet with him again.
How -- is it -- do you look to Washington in some way to help your state's fiscal problems?
GOV. BRIAN SCHWEITZER: If a state looks to Washington, D.C., for your help, you're in big trouble. You will be disappointed every time.
You know, this is a city that oftentimes confuses motion with action. There's a whole lot of talking about things here in Washington, D.C., but not very much action.
JUDY WOODRUFF: So, do you look for Washington to stay away from Montana? And...
GOV. BRIAN SCHWEITZER: It's usually better when they're not helping you.
JUDY WOODRUFF: And if there's a government shutdown because Congress can't reach agreement over a budget, does that affect the state of Montana?
GOV. BRIAN SCHWEITZER: About 25 percent of the land in Montana is owned by the federal government. We have a major Air Force base. We have got thousands of federal employees.
Could we go a week without the federal government running? Yes, it would be tough, but we'd get through.
JUDY WOODRUFF: What about the state of Indiana if there's a government shutdown?
GOV. MITCH DANIELS: Government shutdown would be a bad thing for us all. It would be very disruptive. And I hope they can avoid it.
But I agree with Brian. Indiana stayed solvent throughout this difficult period, without any tax increases, one of the few states that didn't. And we're prepared to do that moving forward.
Honestly, in the interest of our economy and jobs, I want Washington to spend a lot less money. And we would treat it as a net plus if they would do that, even if some of it was in money they have been transferring to states.
JUDY WOODRUFF: So, if I ask you what you want to hear President Obama say, what would it be?
GOV. BRIAN SCHWEITZER: Give us some plans on creating higher-paying jobs. Give us -- Montana is an energy state. We can produce the energy that we need for this country, whether it be wind or coal or oil or gas.
What we need is a federal government working with state governments so that we can develop domestic energy delivered to markets with transmission lines and pipelines and break our addiction to those dictators in the Middle East. If we can get that done, we can fundamentally change this country for a generation to come.
JUDY WOODRUFF: All right, Gov. Daniels, I can't leave without asking you a question that you're getting a lot these days.
But, specifically, our NewsHour analyst David Brooks wrote a column today in The New York Times. He will be here with Jim Lehrer in just a minute. He urges you to run for president. He said you would be the strongest candidate for the Republicans. He said -- quote -- "You couldn't match President Obama in grace and elegance" -- his words -- "but you could on substance."
GOV. MITCH DANIELS: Right on that...
JUDY WOODRUFF: "But you could on substance."
I assume you read it. What do you think of what he had to say?
GOV. MITCH DANIELS: I think that David Brooks is right most of the time, but even his good judgment deserts him now and then. And maybe this was one of those occasions that -- there's nobody whose regard I would rather have, honestly, than his. And I was gratified, of course.
JUDY WOODRUFF: Well, you've said you are considering it. What more do you need to know before -- to make a decision to go?
GOV. MITCH DANIELS: It's a long subject, but there are a lot of concerns that are very, very personal and family-oriented.
And I really do want to see our party step up to its responsibilities, as the loyal opposition, on the biggest questions of the day. And I think the single biggest question is the debt, which threatens to ruin the economy -- not just the economy, but the position of this nation in the world.
And I would like to help do that, but there are ways to help other than throw yourself off that cliff.
GOV. BRIAN SCHWEITZER: I think he's both...
JUDY WOODRUFF: Interesting language.
GOV. BRIAN SCHWEITZER: I think he's both graceful and elegant, personally.
JUDY WOODRUFF: OK.
GOV. MITCH DANIELS: By Montana standards, maybe.
JUDY WOODRUFF: All right.
Gov. Brian Schweitzer of Montana, Governor - Gov. Mitch Daniels of Indiana, thank you both.
GOV. MITCH DANIELS: Thank you.