Transcript: Face to Face with Gov. Branstad

John Dickerson: Welcome to Face to Face, I'm John Dickerson. I'm here in Des Moines, Iowa with the Governor of Iowa, Terry Branstad. Governor, welcome. Thank you.

Terry Branstad: Thank you, John. Good to be with you.

John Dickerson: It's great to be with you. A little warmer than when we were last with you here for the caucus. But the reason I'm back and where I want to start with you is that Iowa is a battleground state. The president's coming here, Mitt Romney's coming here. Talk a little bit about where Iowa fits in the presidential election.

Terry Branstad: It's kind of where it all began, and we're the state that launched Obama but I think in this election we're the state that's going to sink him. We're one of the key battleground states. Iowans are very disappointed in the lack of leadership from Washington, D.C. The president, when he campaigned here four years ago campaigned as a uniter, somebody that could bring the country together and really offered hope and change. But the only thing we've seen is more spending and debt and gridlock in Washington and we think the president was given a golden opportunity with the bipartisan commission that he appointed that he could have come forward with a plan to help address the debt situation and with Bowles-Simpson he had that golden opportunity with the State of the Union address in 2010, instead he chose to play partisan politics and spent his time attacking the wealthy, attacking bankers, attacking insurance companies, attacking everybody else -- the very people we need to invest and create jobs in this country. And the result is our country has really languished. The recovery has not been as robust as it could be. America's still saddled with the highest corporate income tax in the world. We have all kinds of regulatory burdens that scare investors who we're looking to create private sector jobs.

John Dickerson: Iowa though has a lower unemployment rate than the national average -

Terry Branstad: Yes we do -

John Dickerson: Things are going pretty well in Iowa. Wouldn't that be - it sounds like fertile territory for the president.

Terry Branstad: We've got a Republican governor. So does Indiana and Wisconsin. All you have to do is look to the president's own state of Illinois and see a basket case. State with the biggest debt and the most unfunded public employee retirement system and they're $4 billion behind in paying their bills. And what do they do in Illinois? They raise taxes. Driving companies and business out of the state. So we don't want to follow Illinois-brand of politics. We want to do what Indiana's been doing under Mitch Daniels, or what Wisconsin and Michigan and Iowa - all these states that elected Republican governors in 2010 are working hard to reduce the tax and regulatory burden and attract business and jobs. When I became governor, our state had a financial mess and we had a previous governor that had this big debt plan that we have to pay back to the tune of $55 million a year for the next 25 years. I said, we need to get the budget under control. We need to spend less than we take in. we need to have something that's sustainable for the long term and I'm proud to say we've done that, and now Iowa is in a very strong position. We're focused on jobs and we've reduced the unemployment rate from 6.1 to 5.1 percent. In sixteen months I've created more jobs than the previous Democratic governors did in 12 years. So I'm proud of what we've done. I've seen what Mitch Daniels has done in Indiana, and I've seen what other Republican governors have done. We need a president that's in tune with us, that's going to eliminate some of the federal tax and regulatory burdens, some of the uncertainty. Obamacare is one of the big uncertainties out there. It's unaffordable, unsustainable to add 150,000 people to Medicaid rolls. We can't afford that in Iowa and we're a small state.

John Dickerson: As a political matter, and you know the Iowa politics better than anybody, what do folks feel though? Unemployment's low except for some drought that's worrying people. The crop prices have been pretty good. Why -

Terry Branstad: Do you think the country's going in the right direction? And the state's going - they think the country's going in the wrong direction and the state of Iowa's going in the right direction. Now the truth is, in 2010 we had a great year for agriculture. 2011 wasn't quite as good but it was good. This year potential drought, may not be as good. But the truth is, we're working hard every day to diversify the economy to bring more business and jobs here and we're marketing our products in China and elsewhere. We're selling soybeans - and China's now buying, when Vice President Chu was here they bought $4.3 billion worth of soy beans. They're buying corn, they're buying pork, and those things are important to us. But that's, you know, and I am personally working to market and promote those things. We need the federal government to eliminate some of the burdens on Iowa companies and American companies so they can bring the money back and invest it here and create jobs.

John Dickerson: Let me ask you about one of your fellow Republican governors, Gov. Walker in Wisconsin survived a recall election. What do you think the message is for Iowa - to you, but also just more broadly?

Terry Branstad: Well first of all, I have a lot of respect for Gov. Walker. He did exactly what he promised to do. He inherited a terrible financial mess and he could see that what the state of Wisconsin was doing was unsustainable and that they had to get out from under some of the oppressive contracts the unions had imposed on them. The teachers union, frankly, was in charge of the insurance for the schools and there was no competition and the cost was horrendous. He changed all of that and the result was they didn't have to lay off a lot of teachers and even though the unions from all over the country came in and attacked him and threatened him, occupied the capital, and put this recall on the ballot. At the end of the day he won by a bigger margin than he did in 2010. I did a fundraiser for him in Dubuque, Iowa. I thought we could raise $50,000 from Iowans. We raised $150,000. So people understand and get it and they recognize that state after state has been hampered by these unbelievable costs. In California, on the ballot in both San Jose and in San Diego they voted to curtail some of the excessive retirement benefit programs on the communities in that state. So I think people get it, I think they understand that governors have a responsibility to balance the budget and to attract business and jobs. And if you hamper the state with unbelievable - and by the way, the federal employees don't have these rights. The president can impose a two-year freeze on public employee salaries and they do have to pay towards their health insurance. So it doesn't make any sense for these public employee unions to be able to impose these kinds of things on the states. I'm proud that Gov. Walker and other governors are doing what needs to be done.

John Dickerson: Is there a message for Gov. Romney in this? In the victory in Wisconsin for Gov. Walker?

Terry Branstad: Yeah. I think it is a message that Wisconsin's in play. Wisconsin is a state that's only gone Republican in one election, I think 1984 is the last time it went Republican and that's when Reagan carried every state but Minnesota. This time I think Minnesota, I think Wisconsin could be won. Who knows? Maybe even Minnesota. But I definitely feel good about Iowa. I think Michigan, Ohio, Pennsylvania. All these states that elected Republican governors in 2010 - cause all you have to do is contrast that with the president's home state of Illinois with a democratic governor raising taxes, can't pay their bills on time. They've got the biggest public debt, I think, per capita of any state in the country and they have the most unfunded liability on their pension system. That tells you we don't want to follow Illinois's example. We want to look to what Indiana and Iowa and Wisconsin and Michigan and Pennsylvania where Republican governors are leading the way, making the tough decisions and putting their states on track for growth.

John Dickerson: Let me ask you a question about something you're trying to do here in Iowa. Everybody's trying to get a handle on how to improve this economy. You've just launched something here in Iowa to help the unemployed get skills. Tell us briefly about that.

Terry Branstad: Right. This is a public-private partnership called Skilled Iowa. And we did this in conjunction with Bill Knapp who's been the biggest contributor to the Democrats in our state and Bill and I were working together on trying to do something about reducing the commercial property tax and we talked about this and he said he was willing to raise some private sector money to help people get training so they could become certified that they had the skills for jobs that are available that aren't being filled today because they can't find people with the right skill-set. And so we're doing that. Our workforce development department is working with the private sector who's contributing to this. We're very excited about that. ACT has a program to certify people, and ACT is an Iowa company. So we're very excited about this. We think it's going to make a big difference and it's a win-win for everybody. A win for the unemployed that can get the training and still get their unemployment benefits while they're getting the training, and then can have the skill-set to be employable and have a good working wage and at the same time help businesses find people to fill those jobs that haven't been filled.

John Dickerson: I want to ask you finally here about the relationship between the states and Washington. There's been some discussion about - from Gov. Romney, about picking winners and losers with respect to the president. Solyndra the most well-known example of that. The wind industry in Iowa has benefited from some federal help and I guess what I'm interested is your take on what role the federal government has in helping industries, ethanol's another one. Give me your sense of that.

Terry Branstad: Well first of all I think when you're trying to reduce our dependency on foreign oil it makes sense to encourage and assist renewable fuels. I was an early advocate for that back in the 1970's. Iowa was one of the first states to do something. I'm proud to say we lead the nation in ethanol production. We lead the nation in bio-diesel production and we're second only to Texas in wind, however Texas is a much bigger state. Per capita 20 percent of our electricity is generated by wind, and per capita we're number one. So this has been very good. We did receive some help through tax credits. The ones on ethanol have expired. The wind energy tax credit, unfortunately, has expired many times and is about to expire again. I think it needs to be extended for about 2 or 3 more years while that industry continues to grow. I'm proud to say that when I was governor the first time, back in 1983, we passed a renewable energy standard that made it possible to grow the wind energy business. And 24 states have copied our law. So that makes sense. There's done, some things we've done on the state level. We think the federal government should also provide some incentives. They shouldn't last forever, but those things make sense and that's a lot better than having the government go out and try to pick winners and losers. Provide this for everybody that's going to be doing that, and we've found that it's been a wonderful thing for our state and we're very proud that we lead the nation in renewable fuels and that today we produce more ethanol than we consume in gasoline in Iowa.

John Dickerson: Finally, in Washington we, the approval ratings for Congress are terrible. For the president they're not so great. People look to Washington and they say it isn't working. When you talk about places that it is, where things do seem to be working, people talk about the statehouses. What kind of lessons can they learn in Washington from what you're doing here?

Terry Branstad: Well I looked at what Mitch Daniels did in Indiana. While other states were spending too much money, he reduced the size and cost of government, focused on bringing more business and jobs to his state, and we saw Indiana do well. Then I watched the 2009 election and I saw what happened in Virginia and in New Jersey. And McDonnell and Chris Christie came in doing the same thing. And a whole bunch of us new governors from Pennsylvania to Michigan, Ohio and Wisconsin and Iowa, and other parts of the country, too came in with the same idea. Let's reduce the tax and regulatory burden. Let's focus on bringing more business and jobs to our states. We need the federal government to be on our side instead of working against us. I had a company in Chicago tell me, I was trying to get them to move to Iowa, they said you know Illinois's taxes are terrible. We're going to leave but we're maybe going to go to Canada because the corporate taxes are lower in Canada. When I was governor before back in the '80s and early '90s, a Canadian dollar was only worth 65 cents to the American dollar. Canadian financial institutions weren't as healthy as ours. And their taxes were higher. Now their dollar is comparable with ours. Their financial institutions are healthier and their taxes are considerably lower. Their federal corporate tax is only 15 percent. So I think we can learn from Canada. Not follow the European example of spending and spending and getting ourselves into such a tremendous financial mess, and that's the way this country's going today. We can't afford - four more years we'd be worse off than Greece. And America deserves better leadership than that. That's why I think Iowa and other states that went for Obama last time are going to go for Romney in this election.

John Dickerson: Last question. How much are they going to go for Romney? How big is his margin going to be in Iowa?

Terry Branstad: Well, this is always a competitive state and it's not easy for a Republican to win it. Last time was George W. Bush when he ran for reelection. He didn't win it the first time, he did the second time. I think this time we, we went for Obama by a pretty big margin but I think a lot of people are very upset. When Obama was elected there were, at that time, 112,000 more registered Democrats than Republicans. Just to show you how it's changed, there are now 8,000 more registered Republicans than Democrats. I think that numbers' going to continue to grow. After the primary election we just had when the numbers come in on that, I think it's probably going to be 20 - 25,000 more Republicans. I think Republicans are more energized. They recognize the future of the nation's at stake. Iowans are very abhorrent to debt. I was elected against a governor that had said we're going to solve the state's problems by this big bonding scheme. It didn't work. It just got us more debt that we have to pay back to the tune of $55 million a year for 25 years. Iowans abhor debt and they see the President of the United States as miring us deeper and deeper in debt, increasing the national debt by over a trillion dollars every year that he's been president. That's the wrong direction. And the Obama health care is also unaffordable, unsustainable. So those things all need to be reversed.

John Dickerson: Okay, Gov. Branstad thank you so much. That's it for this edition of Face to Face. Join Bob Schieffer on Sunday on Face the Nation. I'm John Dickerson.