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Diplomacy in Action

The Midterm Gubernatorial Races

FPC Briefing
Raymond C. Scheppach, Ph.D.
Executive Director, National Governors Association
Foreign Press
Washington, DC
October 26, 2010

Date: 10/26/2010 Location: Washington D.C. Description: Dr. Raymond C. Scheppach, Executive Director, National Governors Association (NGA), briefs on the midterm gubernatorial races at the Washington Foreign Press Center on October 26, 2010.  - State Dept Image


2:00 P.M. EDT

MODERATOR: Good afternoon and welcome to the Washington Foreign Press Center. Our midterm elections series continues today with Dr. Raymond Scheppach. He’s from the – he’s the executive director or the National Governors Association. Before we get started though, I just want to remind you to pick up one of our election monitors, and we have programs for election day so we’d like to see you here next week.

But with no further ado, let’s introduce Dr. Raymond Scheppach and the National Governors Association.

DR. SCHEPPACH: Well, thank you for the introduction and it’s a pleasure to be here. I know that in a lot of your countries, if there are governors, the functions oftentimes are quite different. And U.S. governors, I think, are fairly unique.

First let me say that we actually have 37 out of the 50 governors up for election this time, so it is by far the biggest class. This happens every four years. What is very unique this time, however, is that there are 27 open seats. That means that a significant number are either term-limited or they’ve chosen not to run. Given the budget problems they have, I’m not surprised that a number have chosen not to run.

I thought what I would do first is talk a little bit about what governors do in terms of responsibilities in their states and then move to a number of issues of why governors are critical in our system. First thing is that the federal government in the United States runs very, very few programs. They basically run Social Security, they run Medicare program, they run national defense and the national parks. Almost everything else in the system is really run by state government and therefore governors have a very big role.

Some of these programs may actually be 100 percent financed by the federal government, but they’re actually administered at the state level. So elementary and secondary education is pretty much a state and to some extent local function. The governors in the states set the overall requirements and they do a lot of the funding. Second of all, most the states have higher education systems that are funded by states and actually administered by states. And you also have technical schools and so on. So clearly, the whole education and training area is a very, very big responsibility of states.

Programs for low-income individuals, so the primary ones are food stamps, which is 100 percent federally funded, you’ve got the welfare program and then you’ve got Medicaid, which is partly federally funded and partly state-funded for low-income healthcare.

Infrastructure programs – transportation, bridges and all of that – again is primarily a state function. Again, they get a certain amount of money from the federal government, but they are actually the ones who build and do the contracts and so on.

Environmental enforcement – again, even though it’s a federal requirement, oftentimes the enforcement is done by states. And then you have the whole area of economic development, sort of loans for small business entrepreneurship, all of that is the responsibility of states.

And when there is an emergency, be it a hurricane like Katrina or some other major emergency, it’s normally the governor’s responsibility because the governor has the resources to deal with it. So you find that there’s a lot of those in any given year, from floods to hurricanes and tornados, so that’s a very, very big requirement as well.

Now, why is governorship important? It’s very important, obviously, for their own responsibilities, but it’s also a phenomenal training ground for other political offices. For example, we have 10 or 12 former governors that are in the U.S. Senate at this time. Lamar Alexander, Carper, Voinovich, Gregg, Johanns, Mark Warner, and so on were people who started their careers basically as governors and, in fact, have moved to the Senate. So if you’ve had a governor who’s pretty popular, they have a good shot politically of becoming a senator.

Second, that almost every president when they appoint cabinet secretaries, you’ll always see four or five governors in the cabinet. Right now, you’ve got Sebelius at HHS, you’ve got Vilsack at Agriculture, you’ve got Locke at Commerce, and you’ve got Napolitano at Homeland Security, so four governors in this administration. You had four the previous administration. In fact, you’ll find that the largest federal agency, which is Health and Human Services, the last three secretaries were former governors. So clearly that’s a training ground for cabinet secretaries.

And then finally, I’d have to argue that when you look at where presidents come from, four out of the last six presidents were governors. They did not come from the Senate. So again, that executive experience of running a state prepares you really for cabinets, for Senate, and particularly for presidential.

It’s also true that redistricting is coming up and going into the 2012 election you will have redistricting in place. That normally is approved by the legislature and by the governor in each state. This will be particularly important, particularly for states that are gaining a seat or two or losing a seat or two, so you’ve got a number of states – Texas, Florida, Ohio, Pennsylvania – that will be some changes in that and consequently the redistricting is very, very important.
It’s also true that the governor is the person who runs the political party in the state. In other words, a senator may come in, build their party or their campaign, but then once they get elected, they really don’t maintain much of the party infrastructure. But the governor maintains that party infrastructure in the state all during the time that they are in fact governor. And when it comes down to presidential elections, having the party often times may mean that party gets one or two percent more vote in the presidential than when the governor does not control the party. So it’s not exactly random that Bill Clinton got elected when there were 30 Democratic governors and Bush when you had, I can’t remember, 29 or 30 Republican governors. So it’s very, very important going into the next election of who the governors are.

In terms of the sort of distribution between Republicans and Democrats, we now have 26 Democrats and 24 Republicans. This has swung back and forth over the last 30 or 40 years. We’ve often had one party actually pick up 30, 32, even 33 seats. In 1986, we had 34 Democrats. In 1993, we had 30 Democrats. In the year 2000, we had 30 Republicans. In ’97 and ’98, we had 32 Republicans. So you often get a swing where the majority gets up into 32, 33, which means potentially the minority party gets into 17 or so.

The other item I’d mention is that in terms of legislation on Capitol Hill, governors often times weigh in fairly aggressively on particular issues. They’re much stronger, which happens a number of times, if they weigh in on a bipartisan basis. But governors, because they run all of those domestic programs, really feel that they know a lot about how to run them and how the Congress ought to write new laws with respect to the programs so that they can be run more efficiently. So if you trace history, you’ll find that items like welfare reform, the leadership was really provided by the states and governors. In fact, Bill Clinton was one of those governors very, very early on, before he in fact became president.

And it’s also true, if you look at U.S. federal legislation, you will find that most of it actually started out in a state. So if you look at major breakthroughs and changes, be it clean air, be it welfare, be it cap-and-trade, you’ll find that it started in states and then has moved to sort of groups of states. And once they work out all of the problems with it, it often comes to the federal government to in fact make it a national program.

Just one other comment I’ll make and that’s that what are governors in for in the next two or three years? What are going to be the issues? How – and I would say it’s going to continue to be tough from a fiscal standpoint, that this economic downturn that we just went through is going to have a significant impact on state government finances, really for the rest of this decade, that revenues really went down 17 percent between 2008 and 2010. Governors just during that two-year period cut $75 billion out of spending and raised taxes by about 25 billion. So huge changes in terms of consolidation and reducing state government.

I think, unfortunately, we’re probably only halfway through that. So there’s going to continue to be downsizing of state government, really across the board, from pensions to prisons to education. So that’s going to be front and center. It’s going to be very, very challenging. Making budget cuts is not very popular, but they are running on campaigns for various ways of doing that.

The other issue which I think is going to be fairly big and has implications about the presidential and so on is that it’s really up to the states to implement healthcare reform, that you’ve got federal legislation that provides the guidelines to it but there are really three components of that, and all of them are really going to be done by the states. So you’ve got the first piece, which is the insurance reform component, which is getting rid of preconditions and so on and actually tracking much more closely the rates of increases. But that’s going to be done by states.

You have a huge expansion of Medicaid. There’s currently 60 million people in Medicaid. There’s going to be an additional 15 million after reform in 2014. And that’s going to be partially funded by the states.

And then you’ve got the so-called exchanges. These are where everybody else is going to go to get their healthcare, where individuals go, where small business goes. These are going to be exchanges which sort of provide information on who’s providing insurance, what the cost is, and then people can sort of select it. And that’s where the people between 130 percent and 400 percent of poverty are going to get their subsidies, so that there’s not only a subsidy for Medicaid, which is the very low income population, but people between 130 percent and 400 percent of poverty will also get subsidies, and they will get them through the exchanges. And the states really have until 2013 to decide whether they want to operate the exchanges or whether they want to allow the federal government to come in and to do that as well.

So there’s not a lot of time to get the system up and running, so the next couple of years are going to be key, but it is going to switch because I suspect that our mix is going to change. Republicans will probably pick up seats. It’s a little bit difficult to determine exactly how many, but I would expect four, six, seven additional Republicans. So the implementation at the state level is going to be more by Republican governors than by Democratic governors. So those are the issues that our governors will be facing.

So those are my opening comments.

MODERATOR: We’ll open it up for questions. Just remember, wait for the microphone and state your name and your media organization.

Okay, just right up front here, in the red jacket.

QUESTION: Hi. Nadia Tsao with the Liberty Times, Taiwan. Does the Tea Party movement have any impact on the, you know, government-level elections?

DR. SCHEPPACH: Yeah, I mean, it’s a movement out there and I guess some people would argue that there are several candidates that represent the Tea Party. The only thing I would say is that governors tend to be more moderates, in the middle, because they have to run statewide. So I think that that movement probably will be more important at the House of Representatives level, where certain districts are designed to be either liberal or conservative. Less important, I would argue, at the state gubernatorial level because, again, they have to always deal with the other party and they tend to have – become more moderate.

MODERATOR: Okay, we’re going to take our next question in New York. So go ahead, New York.

QUESTION: Pincas Jawetz from Sustainable Developmental Media. My question is about the importance of next set of governors in setting up the districts for the next set of elections. I understand there is a census that was just taken now, so it’s going to be to the state governments to set up the rules under which the 2012 elections would be run. So could you expand on this?

DR. SCHEPPACH: Surely. Yes, it’s very important from a redistricting standpoint, but it’s really important for those states that essentially add a seat or lose a seat because the others, if there’s no change in the number, they can leave the districts exactly as they are. So that brings up, as I said, states – big states are gaining, which we think are Texas, Florida, and so on, as well as some big states that may be losing: Pennsylvania, Ohio.

What happens is that you basically have to adopt the redistricting that’s reported out by the legislature and signed by the governor. So what happens is that you have a lot of negotiation because it also may affect the state legislature as well as the federal House of Representatives.

And one of the problems has been, I think, that they’ve carved up districts a little bit so that a lot of the districts are either liberal or conservative. There’s only a very few states who really try to do it to increase the competitiveness. I would argue Iowa is one that has a separate entity that tries to draw the districts and then you can only vote it up or down. There is a referendum, I think, in California right now which has a similar approach. In fact, I think there are two referendums. So it’s going to be big in California because it’s referendum. And all I can say is that it takes a lot of negotiation between the legislature and the governor, particularly if they are of different parties. But it is very, very important, going into the next election.

QUESTION: Hi. My name is Reymer Kluever from the German newspaper Sueddeutsche Zeitung. Could you – you mentioned it, that the governors have a huge influence on implementation of the healthcare reform. Republicans have so far said that they might be able to obstruct the implementation through the governors. How can they do that?

DR. SCHEPPACH: Well, first off, as I mentioned, the entire implantation is pretty much a state responsibility. The exchanges, which are very, very big, states actually have the option to do them or not to do them. If in fact you have a significant number of governors who decide not to do the exchanges, they look up to the federal government to do the exchanges. It may be difficult, for example, for the federal government to do 20 of them in a year and actually have them up and operating. So that’s one issue.

Second, we obviously have a number of suits with respect to two issues, really: the individual mandate but also the Medicaid component that most people assume will eventually go to the Supreme Court. If they were to win these suits and knock out the individual mandate, then you’ve got to make changes in the legislation. I don’t think it takes the legislation down, but it requires you to go back and make some changes in it. If you’ve got to go back and the House of Representatives is held by Republicans, are they going to be willing to make those particular changes?

So I think there’s a number of issues out there, both at the federal level and at the state level. And also it’s true that the timelines are pretty tight. It’s a lot to be done until you’re basically bringing 26 million people into the system, and all of these information management systems have to be able to talk to each other and so on. So there’s a lot to be done. So one of the broader questions is can states meet, can governors meet, the timeframes that have been laid out in the law?

MODERATOR: There’s a question right here in the back.

QUESTION: Me again, Sabine Mueller, German radio. I do have a couple more questions concerning redistricting. Do you have any idea how many states will gain or lose seats? And you said those who don’t can just leave the borders in place. Do most states mostly do that or do parties try to do redistricting anyway and try to, well, redistrict regions according to their party lines? And I understand mostly it’s a process behind closed doors?

DR. SCHEPPACH: Yeah, I don’t know the exact number that will be gaining or losing seats, but I suspect it’s in the area of eight to 10 states. But some of them are very large states, so in terms of total it can be a significant number of seats.

Yeah, I think the others may well try because you’re redistricting both the state legislature and House of Representatives. But historically, I think you have found it easy to stop one of those things because it can be stopped either in one of the houses or the governor. So I wouldn’t expect too many changes in areas other than ones that add or lose a seat.

MODERATOR: Right here in the back.

QUESTON: Hello. My name is Melissa Cabo. I’m from TELAM New Agency, Argentina. I’d like to ask you, which of the races or the states are going to be key for Democrats or Republicans in 2012?

DR. SCHEPPACH: Key in terms of the presidential elections? It’s pretty much generally the same states. I mean, it is Ohio, which is a swing state. It’s Florida, which is a swing state. I think it’s the other sort of Midwestern states. It’s kind of like Pennsylvania and Missouri, the middle. Generally, you would assume California is going to go Democratic, a lot of the Northeast is going to go Democratic. So it’s really Florida and Ohio as the big states, the critical ones. But then it’s the rest of the Midwest, I think, which is probably going to be in play.

MODERATOR: Okay, our question will come from New York. New York, go ahead when ready.

QUESTION: I’m Hideo Miyawaki from Kyodo News. My question is what are the roles of the governors in the U.S. foreign policy? And can you think of any case in which a governor has played a role in a decisive role in implementing foreign policy? Thank you.

DR. SCHEPPACH: Well, constitutionally, they really don’t have a role. But if you take that away, the area that they have done more in was really around trade agreements, the NAFTA agreement and some of the others where governors have gotten together and have backed free trade in a fairly aggressive stand. And so really during the 90s, pretty much when a lot of these agreements were up, governors did take a fairly strong role, working with the trade reps, meeting with the White House, meeting with key legislators and committees up on the Hill, and then being united to sort of push on that issue. So that’s the major area that we’ve seen.

We also get a little bit into the immigration area, where now you’ve got some governors, similar to the Arizona immigration, that the federal government is not protecting the border as it should be and that’s costing particularly states in the Southwest a lot of additional funding. So it plays out there a little bit. But by and large, I would argue, that they pretty much stay out of broad-based foreign policy.

MODERATOR: Right here, gentleman in the white shirt.

QUESTION: Younghae Choi from South Korean newspaper Dong-a-ilbo. It’s been my understanding there are two senators from one state and one governor and many congressmen. What is the power balance between governor and senators? Is there any, I mean, notion that senator is powerful than governor or governor is powerful than senator?

DR. SCHEPPACH: I’m probably biased on that decision. To be real honest, cultures differ a little bit by state, and so in some states, the governor is considered by far the most important. Others, Senate is fairly important. But I would say when you get in the state, clearly the governor is the most important, again because of the services that they provide, the fact that they head the party and so on. When you get to Washington, they tend to be less important unless they’re sort of united on an issue, and then there are concerns about that. So I’ll sort of leave it at that. It really depends culturally by state. In the state, governor is much more important.

And I will tell you that a lot of governors who are in the U.S. Senate today don’t particularly like it. Governor is probably the best political job in the United States because, number one, you’re powerful enough to get a fair amount done. And now it’s much more difficult in what I would call the mega-states of California and New York because the politics are very complicated, but most of the other states, a governor is pretty powerful and can get things done. In the Senate, you’ll find that most former governors are very frustrated because it takes them two terms to get to be a subcommittee chair, so you have to sort of stay in line and you kind of wait your seniority time. And then you’ve got party pressures on most issues to vote with the party and so on, where the governors really kind of do whatever they want.

So I would argue that just talking to some who have been president and a bunch who have been senator – and in fact, we used to always have the trend that you started to be governor and then sent to the Senate, but if you trace it, you’ll find that over the last four or five years, you had a bunch that sort of were in the Senate and then decided to go run for governor because they had enough frustration.

MODERATOR: Right here in the orange sweater.

QUESTION: Thank you. Christina Lamb from The Sunday Times of London. Just going back to healthcare, I wasn’t quite clear. Can governors actually just refuse to implement the healthcare legislation? And the second question I have is we hear a lot about how divided the House is between Republicans and Democrats and it’s never been as divided as it is now. Do you see the same thing with governors, or are they working together much more?

DR. SCHEPPACH: The first issue on healthcare, can they not implement, well, there is an option in the bill, as I said, on the exchanges, which is a very, very big part of it. They can basically – they’re supposed to notify the Administration, I think, in 2013 of whether they are going to run the exchange or whether they want the federal government to do it. So they can opt out of that particular provision.

The others, I think that there is sort of the Medicaid expansion and the insurance reforms, they’re sort of obligated. Now, there is a pretty strong feeling, however, because states have to pay about 10 percent of the additional costs of the Medicaid expansion, and given their fiscal situation, there’s a lot of concerns about that. But I think in the end, you probably won’t see defiance unless there’s a significant group that want to renegotiate parts of it, where they would probably come to Washington to see whether there’s any opportunities to do that.

In terms of partisanship, governors, because most times they are dealing with one of their houses that are in the opposite party – in fact, the real secret is most of them would prefer to have one of the parties control one so that they can sort of triangulate. If they’re dealing with everybody of their party, they’re probably dealing with seven or eight who think they ought to be governor, which causes a lot of problems. So because they are in this negotiation mode all the time of having to negotiate with the other party, they tend to be much more bipartisan oriented. I mean, we have governors-only sessions where we have – they have a lunch and then they talk privately for a couple of hours about some of the things they’re dealing with. If you were to overhear that conversation, you probably couldn’t say whether a particular governor was a Republican or a Democrat because they view the world very, very similarly.

Now I will tell you, though, that because Washington has become so partisan over time, it’s sort of beginning to come over their bows. In other words, both parties reach for their respective governors of the same party to weigh in and back their positions on Capitol Hill. So although I think there is still a very significant difference, where governors tend to be very bipartisan, where Senate and House of Representatives seems to be much more partisan, our bipartisan nature has eroded somewhat in the last five to eight years just because of Washington’s partisanship.

MODERATOR: Right here.

QUESTION: Hi. Nadia Tsao from Liberty Times again. You must mentioned that economic situation played an important role and is a problem for many governors. And the Republicans might pick up some seats. But we see that in some traditionally Democratic leaning states, like, Maryland and California, that, you know, the Democrat candidates still in a leading edge. Just wonder, you know, what – what’s the major, you know, factor for this election, governors. Does economic, you know, work in every state, or would it depend on the situation?

DR. SCHEPPACH: It depends on the situation. I mean, first off, we’ve had a number of states that really led with the housing crisis. So the economics is much worse there. In states like Arizona and Nevada, Florida, Rhode Island is pretty bad, where their economics have been very, very, very bad. And so that is an issue where you get into sort of blame. But more often, the debate is what are you going to do about it? So the debate gets down to being sort of can you create jobs with small business? And how are you going to cut the budget from there on?

Now some races, it is not unusual for this election for the party out of power to essentially grab additional seats in the House and Senate. It’s also not unusual that gubernatorials will also follow, but not to the same degree.

And one of the interesting races right now is Governor Mansion of West Virginia, who has an approval rating of, like, 70 percent. He’s running for the Senate and the whole issue there is to try to tie him very closely with President Obama because it so happens that in West Virginia, the President’s polls are down. But it’s also true, one of the things early on there is that in some ways, they’d prefer to keep him as governor. And he’s got the high approval ratings. So sometimes what they’re saying is we’re happy with you as governor, we don’t want you going to senator, you need to stay with us a couple more years. In fact, we saw this some time ago when Ben Nelson, who’s currently in the Senate, who is a former governor of Nebraska. And the very first time he ran, he was defeated, again largely because he had high approval ratings as governor and they were saying we want – keep you here; we don’t want to send you to the Senate. So it gets complex at times.

MODERATOR: Right here.

QUESTION: My name is Toru Takei of Kyodo News of Japan. You must mentioned about West governor – West Virginia Governor Mansion. My question is if he wins and goes to the Senate, what happens to the governor’s seat there? He – I understand he still has two years in his term and I wonder if there’s going to be a special election to fill the seat or someone else is going to do the job.

DR. SCHEPPACH: Yeah, sometimes the constitutions on some of these issues are somewhat vague and they actually have to go to a ruling, for example, of the attorney general or the secretary of state. I think about a year ago or so, they’ve actually appointed – I think it’s the majority leader in the House or the Senate to also be the lieutenant governor. So once you’ve certified, that person would step up. Now there’s an issue of when that person would have to stand for election, and I don’t know that they have decided that.

So most states, it’s pretty clear that the lieutenant governor moves in there. But the issue of when the next election is, is often times an open question. Those that don’t have a lieutenant governor, it often goes to sort of the speaker of the House or the president of the Senate. New Jersey, for example, has the strongest constitution from a governor. There is no other statewide elected official. So there’s obviously no lieutenant governor. And so it goes to the speaker of the House. And – but the – and they stay that. They’re both governor and speaker of the House for the remaining part of that term, a very unique kind of situation.

MODERATOR: Any more questions? Okay, then it looks like that’s it. Thank you so much for coming.

DR. SCHEPPACH: Thank you. Appreciate it.

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