The Wisconsin recall and you: How it could impact the presidential race and why you should care

This is a rush transcript from "On the Record," May 24, 2012. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: The eyes of the nation are on Wisconsin. The recall election is not just a big deal in the Badger State, it will pack a punch across the country. So how will it fuel voters sentiment in November's presidential election? Dick Morris joins us, the author of the new book "Screwed!" Nice to talk to you, Dick.

DICK MORRIS, AUTHOR, "SCREWED!": Good to be here and in your native land.

VAN SUSTEREN: It's always fun for me to watch what goes on this that state. Before we get to the big picture, I am curious in terms of the money, there is always outside money. But I am curious, is the outside money flowing into the Democratic and the Republican candidate profoundly bigger or less than usual in races like this?

MORRIS: Much, much, much bigger. This is Armageddon, and both sides understand t.

I think that the race is important on four levels, Greta, if you bear with me. First is, obviously, I think it is a precursor of the national election. Wisconsin is a Democratic state that went Republican in 2010. Obama carried it in 2008. If Walker wins by a good margin, or even if he wins, I think that will send a big signal to the rest of the country that Obama is in trouble. If Walker loses, it will energize the Democrats and send a signal that they can win. Like in the old days, Maine voted before the rest of the country and was the bellwether. Now Wisconsin is.

But there are three other levels. I think this will determine the fate of education reform throughout the country. If Walker survives recall, you will see limits on teacher tenure, merit pay for teachers, and much more flexibility from union control in all of the 49 other states. And if he loses, they will drop dead.

I think the third thing is that it will free state and local government from control by the unions, but if they lose and Walker is recalled, a big boost for the state and local workers unions.

And finally, it has a direct financial impact, because part of the Walker reforms said that workers can choose on their own whether to pay union dues or not, rather than have them automatically deducted and if that catches on, it will really limit the power of the unions to bolster the Democratic Party.

And right now a majority of the workers, of the unionized workers in America are public employees -- 40 percent of state local workers belong to unions. Only seven percent in the private sector belongs. So this is like the air traffic controller strike where Reagan faced down the private- sector unions. And it is an absolutely crucial race for both sides.

VAN SUSTEREN: You say that if he wins by -- if Governor Walker wins, that's a precursor for what will happen with the Wisconsin come November. I guess I am little bit suspicious that if he wins by two points that it will energize the Democrats and be within reach and they will really crank it up and work really hard between June 5 and the election. I think in order for him to tell the Democrats that Wisconsin's going to go do a Republican and hold the Democrats at home, he has to win by a sizable margin.

MORRIS: Any victory's important because, you know, the one vote determines how the state's electoral college votes go. But if you made a list of swing states, and say you started with the most Republican of them, which would probably be Florida. Then you went through Ohio and then you went to the most Democrat of the swing states, probably Virginia, Wisconsin would be next. It wouldn't even be on that list. So if Wisconsin goes Democrat in this pivotal contest -- goes Republican in this pivotal contest, even by a point or two, it really augers bad stuff for Obama.

And you combine it with the dismal performance he had in the Arkansas and the Kentucky primaries where he got over 40 percent of the Democratic voters in those state voted for uncommitted or a nonentity rather than their president.

VAN SUSTEREN: With this being so important to the Democratic Party and President Obama won in 2008 by 12 or 14 points, why hasn't he called up President Obama, the mayor of Milwaukee and said, come on, help me? Do politicking with me?

MORRIS: Because the mayor of Milwaukee doesn't want Obama's negatives, and Obama doesn't want it because he doesn't want the loss to be attributable to him and it would be if he came in and campaigned.

But everybody knows this is front and center -- not just about the presidential election. When you look at the fact that state and local governments spend huge amounts of their budget, probably a third of it, on education and that that is tightly controlled by the unions, and this would free that control, this is absolutely pivotal. We have tried everything in education reform -- dumping in more money, higher standards, all kinds of stuff. The only thing that really works is freeing them of union control and giving people a choice of where to send their children. And that's what is at stake right now.

VAN SUSTEREN: Dick, thank you.

MORRIS: Thank you, Greta.