Ind. Governor Sets Example for Wisconsin Against 'Privileged Elite' Unions

This is a rush transcript from "On the Record," February 24, 2011. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Now, "disgraceful" and "embarrassing" -- those are the biting words Indiana Governor Mitch Daniels is directing straight at Indiana's fleeing Democrats. They have fleeing Democrats as well. Thirty-eight Indiana Democrats fled Indiana to duck voting on the governor's "right to work" bill. But now that bill is off the table. So why are those Democrats still on the lam?

The governor of Indiana has some ideas. Indiana Governor Mitch Daniels went "On the Record."


VAN SUSTEREN: Governor, nice to see you, sir.


VAN SUSTEREN: Governor, so I understand some Democrats have left your state, some elected officials, because a "right to work" bill that was proposed in Indiana -- is that "right to work" bill still on the table?

DANIELS: No. It's dead for this session and -- but it -- a subject that's legitimate for discussion. It'll probably be studied this year probably in a formal study committee. But no, it's not going further this year.

VAN SUSTEREN: So why don't they come home? If that's why they left and now it's off the table, they can -- I guess they can hit the road later if they don't want to, but why don't they come home now?

DANIELS: Maybe they're having a good time. I don't know. Maybe they -- these folks may feel well at home in Illinois, where they spend money they don't have and tax people for the difference and let their infrastructure crumble, and so forth. But that's what Indiana was looking like when these people were in charge. But we'd like them to come back eventually and do the people's business here.

There was a little bait and switch, Greta. They went AWOL over the private sector "right to work" proposal that some legislators had advanced. But even as it was clear it wasn't going to happen, suddenly, they produced a list of other demands. We're supposed to kill a whole lot of other bills, which include things like a "no tax" budget and an education reform package that President Obama would be voting for if he were a member of our general assembly.

So we're not doing that, and you know, they're going to have to do their duty at some point. You know, if you're not prepared to respect the democratic process, say your piece, cast your votes, offer your amendments, and if you don't succeed, go home and take it to the voters -- you're are not prepared to do that, you shouldn't have run for office in the first place.

VAN SUSTEREN: All right, now, on a slightly different topic, explain something to me. In 2005, when you became governor, by executive order, you did away with collective bargaining for state employees. That's the subject of the feud in the state of Wisconsin. And I'm curious why you were able to do it by executive order, number one. And number two, what impact it has had on the state of Indiana, whether that's been good or bad economically.

DANIELS: I was able to do it because it had been put in place by a Democratic predecessor many years before by executive order. The Indiana legislature had never authorized collective bargaining or the forced collection of dues from state employees. And so that's why I was able to strike it down. It's precisely what Scott Walker is trying to do in Madison right now.

And the answer to the second question -- it has been a profoundly positive event. We've not only saved hundreds of millions of dollars, but of equal importance, we're providing services vastly better -- I can prove it to you -- because we were freed of a collective bargaining arrangement that basically said you couldn't move a Xerox machine from one room to the other without, you know, the union's permission.

And so we immediately began merging agencies, in some cases dividing them, consolidating things like IT and HR and procurement, and in some cases, outsourcing to the private sector, saving buckets of money and improving service delivery to Hoosiers. It's been an unqualified success, and I hope he has a chance to do the same.

VAN SUSTEREN: All right. In Ohio yesterday, you were quoted as saying in reference to the public employee unions that they are the "privileged elite." Do you want a do-over on that, or do you stand by that?

DANIELS: No, I stand by that. You know, the average public employee is paid a more than the taxpayer who pays his salary. The case of federal employees, it's 50 percent more, and that's just the beginning. The benefits are vastly higher in many -- or most cases than they are in the private sector. And the job security is in most cases nearly total.

So you know, I'm not against this. In many cases, I'd like to see certain public employees, like our best teachers, paid more. But you know, the idea that these folks are somehow the underdogs in this situation is exactly the reverse of reality. As you know, a huge -- the biggest special interest in America, the biggest PACs and donors to our politics are the government unions, who are funding politicians who then quite cooperatively turn around and vote for more money, more benefits, more job security and higher pensions.

VAN SUSTEREN: Governor, well, we're going to be watching your state, wondering if you get your politicians back home. We're watching Wisconsin, as well. And I do hope you'll come back and certainly come back very soon. Thank you, sir.

DANIELS: Thanks a lot.