When former White House chief of staff and current Mayor of Chicago Rahm Emanuel was asked about the 2012 election in a recent CNN interview, he replied, “It’s going to be a close election. I think it’s going to come down to a handful of states. It’s five states, 500 precincts.”
With every passing election, fewer and fewer states are continuing to swing back and forth. But it’s those critical few that determine who wins elections. If the conventional wisdom holds true, this election will ultimately come down to the economy and unemployment – particularly in those swing states.
Voters should be noticing which states are seeing their unemployment rate go down and economic numbers going into the black and which states are drowning in red ink and jobless claims. States with Republican administrations that are passing pro-business reforms, including most of the swing states, are seeing their numbers improve. The blue states are a different story, yet supporters of President Barack Obama are feebly trying to give him credit for all the progress these states have made to their economies and job markets. That myth won’t fly.
Let’s take a look at five critical states up for grabs this November and see what their local governments have been doing:
Governor: Rick Scott (R)
House: 42 seat Republican majority
Senate: 16 seat Republican majority
Unemployment rate: May 2011 – 10.6%, May 2012 – 8.7%
Polling: Romney 46%, Obama 45%
Florida is a no income tax, right-to-work state. Since taking office, Gov. Rick Scott has signed critical reforms into law such as cutting down on car insurance fraud as well as submitting welfare recipients to drug screenings. The Florida state legislature also passed a series of corporate tax cuts into law totaling $1 billion worth of tax breaks for businesses over 3 years. Hello lower unemployment rate.
Governor: John Kasich (R)
House: 19 seat Republican majority
Senate: 13 seat Republican majority
Unemployment rate: May 2011 – 8.8%, May 2012 – 7.4%
Polling: Romney 46%, Obama 44%
Here’s a crazy concept: after taking office, Gov. John Kasich and the Republican legislature balanced Ohio’s budget and eliminated a record $8 billion deficit by passing $800 million in tax breaks, cutting spending, and passing collective bargaining reform. It also privatized public infrastructure, overhauled their Medicaid system, and tied teacher’s pay more closely with student achievement. Sure enough, that caused S&P to upgrade Ohio’s credit rating. Shockingly, business owners and job creators seemed to like that positive outlook.
Governor: Bob McDonnell (R)
House: 35 seat Republican majority
Senate: 1 seat Republican majority
Unemployment rate: May 2011 – 6.2%, May 2012 – 5.6%
Polling: Romney 47%, Obama 47%
The Republican administration of Virginia has passed legislation that cut spending, balanced its budget, and developed domestic energy infrastructure leading to a $544.8 million budget surplus and incentivizing businesses like Hilton, Volkswagen, and Northrop Grumman to relocate their corporate headquarters to right-to-work state Virginia – bringing all their jobs with them. Noticing a trend here?
Governor: Terry Branstad (R)
House: 20 seat Republican majority
Senate: 2 seat Democrat majority
Unemployment rate: May 2011 – 6%, May 2012 – 5.1%
Polling: Romney 47%, Obama 46%
After retaking the Governor’s office in Iowa, Terry Branstad passed $300 million with of property tax relief, sunseted outdated rules and regulations, and cracked down on Medicaid fraud. While he hasn’t gotten everything on his reform agenda passed through the Democratic Senate, Iowa has nonetheless maintained the highest credit rating possible and seen a $483.2 million budget surplus.
Governor: Scott Walker (R)
House: 20 seat Republican majority
Unemployment rate: May 2011 – 7.6%, May 2012 – 6.7%
Polling: Romney 47%, Obama 44%
Gov. Scott Walker and his Republican colleagues have completely revamped Wisconsin’s economy. His “Repair the Budget” bill restructured the state debt, lowered the state’s interest rate, and reformed collective bargaining rights so that public sector employees contribute more for their own benefits (specifically 5.8% toward their pensions and 12% toward their health care coverage – about HALF the private sector national average). The results have seen Wisconsin turn a $3.6 billion budget deficit into a $154 million surplus, balancing its budget for the first time in 30 years. Before Walker took office, a survey of business owners and employers by the state’s Chamber of Commerce found that only 10% thought Wisconsin was heading in the right direction. Now 94% say it is.
Have you figured out the common themes yet? Balancing budgets, keeping spending under control, maintaining low tax rates, cutting back red tape and bureaucracy, and collective bargaining reform. In fact, the Chief Executive’s eighth annual survey of CEO opinion of Best and Worst States in which to do business ranks all the right-to-work states in the top half of the list. No income tax states Texas and Florida top the list, followed by North Carolina, Tennessee, Indiana, and Virginia. At the bottom of the list as the worst states for entrepreneurship and job creation are the solid blue states where spending and debt is ballooning, tax burdens are high, and the workforce is heavily unionized: Massachusetts, Illinois, New York, and California, leaving them with stubbornly high unemployment rates.
Now compare what the local governments in these swing states have done with our federal government in Washington, D.C.’s, record. Out-of-control spending has racked up a $15.8 trillion debt and record trillion dollar deficits, eclipsing our entire GDP and leading to a first ever credit rating downgrade. The labor force participation rate is at a record low, inflation is rising, and average household net worth has fallen by 40%. This administration won’t even touch entitlement reform; those programs of which are now eating up 65.1% of tax dollars and going completely broke within 20 years. Uncertainty over federal tax rates, health care liability, and the future of our economy is not incentivizing global businesses to expand, invest, and hire here at home.
Yet I’m supposed to believe it’s these policies that are causing the lower unemployment rates in swing states instead of the actions of their local governments?
Back to the drawing board Team Obama 2012.