Mike Pence's troubles mixing biz with social issues

Last Updated Jul 15, 2016 8:39 PM EDT

Donald Trump's newly selected running mate, Indiana Gov. Mike Pence, is virtually unknown to most voters nationwide. The latest CBS News poll found 86 percent of likely voters said they're undecided or don't know enough about him to even have an opinion.

So what does his record in Indiana suggest a Vice President Pence might mean for voters and their No. 1 concern, the state of the U.S. economy?

As Indiana's governor, Pence cultivated pro-business and low-tax credibility by placing a moratorium on business regulations on his first day, cutting business taxes each of his three years in office, and maintaining a large budget surplus. He recently announced a $1 billion investment in state programs to encourage innovation and entrepreneurship. When he inherited the mantle of his popular two-term predecessor, Mitch Daniels, business leaders hoped he would follow Daniels' lead in steering clear of divisive social issues.

But Pence drew the ire of business leaders--including many who had supported his election--for doing the opposite, including support for a bill widely seen as providing legal cover for discrimination against gay people, and an anti-abortion measure that's considered one of the most extreme in the nation. Several female Republican legislators spoke out against the latter bill, which bans abortion in the case of disability including Down syndrome and requires fetal remains from a miscarriage be cremated or buried. (A federal judge in June blocked the law from taking effect, saying it would likely be ruled unconstitutional.)

Pence's focus on social issues hurt him in Indiana: His approval rating in recent polls hovered around 40 percent, and he was facing a serious reelection challenge in a solidly red state. One of his top donors, former Angie's List CEO Bill Oesterle, even flirted with the idea of fielding a primary challenger to Pence over his support of the Religious Freedom Restoration Act, which also drew strong denunciations from major Indiana employers including Eli Lilly, Salesforce and the NCAA.

"He has stubbed his toe on social issues to the point where it overshadows any reasonable positive evaluation of his administration," said Mickey Maurer, a businessman with stakes in the National Bank of Indianapolis and the Indianapolis Business Journal who served as Indiana's Secretary of Commerce under Daniels, also a Republican. "He's toxic on these social issues, and that's his legacy."

By contrast, Pence's social-conservative stances drew raves from religious conservatives across the country -- and likely helped seal his selection as Donald Trump's running mate. Pence brings credibility among religious conservatives to the ticket led by Trump, a candidate without religious credentials who has a reputation instead (perhaps not entirely earned) for business acumen. Pence may be pro-business, but it's not his first priority. The former radio talk show host, who one opposition researcher described as "pretty boring," has described himself as Christian, conservative and Republican -- in that order.

Pence's record steering Indiana's economy is mixed. During his three years as governor, the state has continued its post-recession recovery along with the rest of the U.S. But Indiana's GDP growth also lagged well behind the national average in 2012, 2014 and 2015 and only narrowly beat the average in 2013.

Industries in the state, which makes everything from aircraft and auto parts to pharmaceuticals, medical instruments and agricultural products, have been hurt by slowing global demand. Although Indiana's two biggest export markets are Canada and Mexico, it also ships a range of goods to China and Brazil, where the pace of growth has declined.

Indiana also ranked only 38th in the U.S. for per capita income, at $40,998, while the state's unemployment rate stood at 5 percent in May, above the national average of 4.7 percent. Indiana's labor-force participation hit 65.4 percent, its highest point since 2009, and well ahead of the national average.

More positively, the state's balance sheet is strong compared to its neighbors, particularly Illinois, with overall debt and unfunded liabilities among the lowest in the U.S.

Before moving into Indiana's governor's mansion, Pence spent 12 years in Congress without introducing a single bill that became law. The Tea Party supporter and crusader for defunding Planned Parenthood nonetheless attained the respect of his colleagues, who elected him chairman of the House Republican Conference.

Pence brings to the Trump ticket a knack as governor for getting things done in the state legislature, and ties to major Republican donors who have snubbed Trump, including the Koch brothers, said John Ketzenberger, president of the Indiana Fiscal Policy Institute.

After stumbling with business supporters on the Religious Freedom Restoration Act, Pence helped craft a legislative "fix" to the controversial law, calming an uproar and ending threats of headquarters relocations by major employers. But his ham-handed defense of the original bill, and eventual changes, alienated some of his religious supporters and gave him a reputation as a flip-flopper.

Ketzenberger described Pence's support of the bill as "a breach of trust" with the business community--one the governor had been working hard to mend until Donald Trump's campaign came knocking.

Investors wary of Trump's anti-globalization rhetoric may be more encouraged by Pence's record. He's been a strong supporter of free trade, from his time as a radio host through his Congressional service and stint as governor. That contrasts to Trump's populist condemnations of trade deals as terrible for American workers.

"Trade means jobs, but trade also means security," Pence wrote in a tweet in 2014, announcing his support for the Trans-Pacific Partnership, which Trump opposes.

When air conditioner maker Carrier Corp. in February announced plans to close its Indiana operations and ship 2,100 Indiana jobs to Mexico, Pence's "measured response" slammed federal regulations seen as burdens to business, Ketzenberger noted, but it was a far cry from the protectionist rallying cry from Trump.

Pence also has been a staunch opponent of the Dodd-Frank financial reform legislation, though Brian Gardner, a research analyst with investment bank KBW, cautioned that Pence is unlikely to have much influence on a potential rollback of the legislation, which is unpopular with banks.

"If Trump chooses Pence, it really means that Pence is signing on to the Trump agenda more than Trump is signing on to Pence's agenda," Gardner wrote in a note to clients released on Friday.

Pence, who endorsed Ted Cruz in the Republican primary, also broke with Trump on immigration, strongly condemning a proposed ban on Muslim immigrants as "offensive and unconstitutional." But at the same time, Pence went to court in an unsuccessful bid to stop a Syrian immigrant family from settling in Indiana, citing security concerns.