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CNBC Transcript: Governor Scott Walker (R-WI) Sits Down with Larry Kudlow on CNBC's "The Kudlow Report"

Wednesday, 20 Nov 2013 | 9:21 AM ET

WHEN: Tuesday, November 19th

WHERE: CNBC's "The Kudlow Report"

Following is the unofficial transcript of a CNBC interview with Governor Scott Walker (R-WI) tonight on CNBC's "The Kudlow Report." Following are links to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000219542 and http://video.cnbc.com/gallery/?video=3000219541.

All references must be sourced to CNBC.

LARRY KUDLOW: We're honored to be joined now by Wisconsin Governor Scott Walker. He's out with a new book, Unintimidated: A Governor's Story and a Nation's Challenge. I wanna talk about everything and-- and including your heroic stand against the unions in Wisconsin. But let me just start. The polls are crashing and Obama is caught in essentially his third falsehood on this subject. What's your take on this?

GOV. SCOTT WALKER: Well, I think that's part of the problem of you have someone who didn't have executive experience and they let p-- the political shop in the White House run everything. Political shops, as you know-- you and I know in White House, is Republican/Democrat alike have major impact on policy but they're not the sole force of policy here.

And I think that's part of the problem is, they made a promise that nobody could actually deliver on-- not just in terms of a website but on the overall policy of ObamaCare, which is an abysmal failure. And you and I've talked about it on this show. It's not only a fail for ObamaCare, it is continuing to be-- a wet blanket on the recovery and the nation's economy.

LARRY KUDLOW: Right. It's anti-growth. But it just-- it just-- it sort of blows my mind, okay? This guy's a lawyer. I-- I've never had any personal criticism to him. I don't deal in that currency. But my point is, he's a well-trained lawyer who taught law. He's making these assertions which are blatantly false, we fi-- does he not think in the age of information and-- and Facebook and tweeters and electronic-- this is gonna come out?

GOV. SCOTT WALKER: Oh, it's shocking. I mean, to me, the fact--

LARRY KUDLOW: And I think people-- and -- I think people are just as angry at his falsehoods--

GOV. SCOTT WALKER: Uh-huh.

LARRY KUDLOW: --as they are at the breakdown of ObamaCare. I really do.

GOV. SCOTT WALKER: Oh, and I think it-- it only gets worse as day b-- by day goes by and more and more of these promises, we find out, you know, were not only not right-- it'd be one thing if they were wrong and you were told they're wrong-- and you actually believe that people believed that. But the more we find out that-- that that were-- business-- or as you said, firm after firm actually telling the White House and the Administration this wasn't gonna work, it-- it's either one of those things where they're not listening to the facts or they're not being informed. In either case, it's rather troubling.

LARRY KUDLOW: Troubling. No CEO experience whatsoever. So, you believe, A) ObamaCare will be and should be the defining issue in the midterm elections--

GOV. SCOTT WALKER: I think there's no doubt about it. You can't-- I say in the end, political issues are-- are most significant when you're telling people something they know to fundamentally be true, I think regardless of how people originally thought about ObamaCare, overwhelmingly the public realizes this is an abysmal failure, not just the rollout but the policy itself. And I think the longer-- that this goes on, the more Democrats are gonna run for the hills.

LARRY KUDLOW: As a-- as a governor running for reelection, your third reelection--

GOV. SCOTT WALKER: Uh-huh.

LARRY KUDLOW: --wh-- how do you put ObamaCare into the conversation? How do you work it in?

GOV. SCOTT WALKER: Well, in our case, it's interesting. Our-- the only Democrat in the race that got in last month is already trying to make an issue, trying to talk about how they would've taken the expansion, they would've taken-- the state-run exchanges. I think that might have sounded nice a couple months ago, but as time goes on, I think for those of us who raised question marks about ObamaCare it becomes pretty clear that we didn't wanna put our state taxpayers at risk, that we didn't wanna be a part of a program that was this abysmal.

Having said that, I also think for Republicans, not only in state office but for federal office as well, we do have to be careful that we don't look like we're relishing this. As much as many of us pointed to these problems early on, raised the-- you know, the red flag of concern, I think we need to emphasize with many of our fellow citizens who are gonna suffer because of these failures and try and find solutions, not just be the ones pushing it over the cliff.

LARRY KUDLOW: So, okay. You have argued strongly regarding 2016 and the presidential race, which you are looking at, that it oughta be an outsider from Washington and it oughta be a governor with executive experience.

GOV. SCOTT WALKER: Yeah.

LARRY KUDLOW: Tell me more.

GOV. SCOTT WALKER: Well, I asked a simple question. Who would my ideal candidate be? And to me it's-- either a former or current governor. In fact, I'd put that-- both a governor on the ticket both for president and vice president. It's a little unconventional, but so was Bill Clinton and Al Gore back in 1992 and that kinda pushed the whole youth, next generation movement. And that was key to the '92 election.

I think in this case, when you're gonna-- probably clearly Republicans are gonna run against an institutional r-- Washington insider-- that being Hillary Clinton, who's not just been a secretary of state and a U.S. senator, first lady, she's been around Washington for a long time.

LARRY KUDLOW: She also campaigned for a single-payer government-run healthcare--

GOV. SCOTT WALKER: Well, the ObamaCare--

LARRY KUDLOW: --plan. Let's not forget that.

GOV. SCOTT WALKER: --is really the second coming of Hillary care. Remember that back from '93 and on.

LARRY KUDLOW: But you're ruling out some talented people, including your colleague, Paul Ryan, from Wisconsin.

GOV. SCOTT WALKER: Well, I don't-- yeah, I don't say it's an absolute. It's-- to me, that's the ideal candidate. I think Paul Ryan is one of the few exceptions in Congress who really steps up and has that-- that reform agenda that we most often see from governors that we don't see enough of in Washington.

But I really feel overall, there's gotta be an anti-Washington sentiment out there amongst both Republican and Democrats. And the more you can capitalize on that by sending people that are gonna come in from outside of Washington, D.C. with the experience of proven reforming-- those are the people we're gonna turn to.

LARRY KUDLOW: I-- if you win this November, you're gonna run for president, are you not?

GOV. SCOTT WALKER: No, I c-- I'm focused on being governor. I honestly -- and-- and I don't know what the future holds. For me, there's a lotta challenges in my state that still need my attention, still need me focus. And after-- three elections coming this November in four years, I gotta spend a lotta time focused on the needs of my people.

LARRY KUDLOW: But say-- let's look at some-- like, Chris Christie--

GOV. SCOTT WALKER: Uh-huh.

LARRY KUDLOW: --just gave a talk-- Wall Street Journal CEO Conference--

GOV. SCOTT WALKER: Right.

LARRY KUDLOW: --the new head of the Republican Governors' Association. Christie says, you know, quite bluntly, "The GOP has got to reach out-- women, blacks, Hispanics." He did. He was very successful--

GOV. SCOTT WALKER: Uh-huh.

LARRY KUDLOW: --in a blue state, New Jersey. Is that a model that you subscribe to?

GOV. SCOTT WALKER: Yeah. I-- I think you look, there's 750,000 more registered Democrats in New Jersey than were Republicans. I think that's a great story for all the media that trying to downplay that. There may be an exception here or there, but overall, Chris Christie is a solid conservative reformer.

LARRY KUDLOW: Do your biggest-- do you think he's your biggest-- opponent?

GOV. SCOTT WALKER: I-- I think in the end, I think there are-- there are 29 other Republican governors who could do just an exceptional job being the top executive in this country, 'cause as I write in the book, time and time again, the reason to be optimistic if you're a Republican, if you're a right of center voter in this country even after last year's presidential election, is because in the states there are now 30 Republican governors, almost as Repub-- almost as many Republican majorities. And we're doin' the real reforms. We're optimistic. We're speaking in terms of the relevant. We're-- we're showin' the courage--

LARRY KUDLOW: I'm gonna come back to those reforms. We're gonna have a second segment. I wanna ask you about difference between Ronald Reagan, Mitt Romney and yourself. I wanna talk about those reforms. And also, the miracle you did in-- Wisconsin, taking on the unions and beating them at their own game.

Governor Scott Walker took on the public unions. It was an epic battle in order-- I think-- to save the taxpayers. And guess what? His recall victory was even bigger than his original win for governor. So, next up, we're gonna take a look at the economic results and talk some more national politics with Governor Scott Walker. I'm Kudlow. Please, stay with us.

LARRY KUDLOW: We're back now with-- Wisconsin Republican Governor Scott Walker. Governor, I wanna talk about your ec-- epic battles with unions. But-- a quick take on what Obama's saying, a quick take. He has this sort of nasty thing that he does--

GOV. SCOTT WALKER: Uh-huh.

LARRY KUDLOW: --against the Republicans. But do you think the GOP was wrong for the shutdown?

GOV. SCOTT WALKER: Well, I think it was good to put attention on ObamaCare, and I'm glad we're back on that. But I had said back in August, I thought the federal government was too big, too expansive, too involved in our lives and we needed to narrow its focus. But for what's left and what's for necessary, it needs to work. We-- we should show that we can make it work and that we've got a viable alternative to it.

LARRY KUDLOW: You would repeal ObamaCare all-together.

GOV. SCOTT WALKER: Hands-down--

LARRY KUDLOW: All right.

GOV. SCOTT WALKER: --easily. And I-- and-- but I'd be willing to take a postponement to get things rolling. You know, we don't have the Senate, we don't have the presidency. I would take a postponement just to get things on to the next election.

LARRY KUDLOW: And, of course, you were very tenacious and determined in your battle against the public unions. You just asked them to pony up more money for health and-- pension benefits. And--

GOV. SCOTT WALKER: Still less than what the average employee --

LARRY KUDLOW: --and you--

GOV. SCOTT WALKER: --of my state.

LARRY KUDLOW: --roll back some of the collective bargaining to help the taxpayer. What's the net-- net effect on the Wisconsin economy of these reforms?

GOV. SCOTT WALKER: Well, you think about four years ago when I ran, the unemployment rate-- was 9.2%. Today it's 6.7%. Four years ago, we ranked in the bottom ten in terms of the best and worst states according to Chief Executive Magazine. Today-- we're up to number 17.

Four years ago, most importantly, a survey by our statewide chamber of our employers showed that just 4% thought we were headin' the right direction. Today, it's more than 94%. So, my governor-- my previous governor's-- last term, a Democrat, we lost 133,000 jobs. We're gaining jobs. The economy's better--

LARRY KUDLOW: --payin'-- bein' tough pays off. Bein' tough--

GOV. SCOTT WALKER: --it does.

LARRY KUDLOW: --pays off.

GOV. SCOTT WALKER: Well, we were able to take a $3.6 billion budget deficit and turn it into just about a $760 million surplus that meant lower taxes, more investments in our schools and higher education, more worker training, because we made tough but -- decisions.

LARRY KUDLOW: But in the book-- and I'm gonna quote directly-- you blast the unions as corrupt and a protection racket. Now, you took 'em of hook, if I'm not not mistaken. People now no longer have compulsory dues.

GOV. SCOTT WALKER: That's right.

LARRY KUDLOW: Are the union roles shrinking? Are people leaving the unions?

GOV. SCOTT WALKER: They've plummeted, just like they did in-- in-- in Indiana when Mitch Daniels did something similar for just state employees. I did it for all employees. And it really is about being pro-worker and pro-taxpayer, because now they get to choose.

If they-- they wanna be in a union, that's great. If they don't, for a teacher in Milwaukee who otherwise would be stuck paying $1,400, she gets to choose to spend that on her kid's college education or whatever else she wants. That's a lot better than it was before.

LARRY KUDLOW: All right, in the book again-- I read a lotta the book-- it's just broadcaster reads--

GOV. SCOTT WALKER: Well, hopefully, a lotta people will read it. It's a good-- good thing for Christmas.

LARRY KUDLOW: It's a very good read. You're very tough on Mitt Romney. And you pose some contrast with Reagan and I wanna quickly say that. You say, "Reagan did not dismiss 47% of the country--

GOV. SCOTT WALKER: Uh-huh.

LARRY KUDLOW: --"as a bunch of moochers." You say Reagan would never have said, "I'm not concerned about the very poor." And you say that Ronald Reagan would never have uttered the words "self-deportation." As a Reagan alumnus, a deputy in the budget bureau, I agree with you on all counts. Tell me why you singled that out. You knocked Mitt down pretty good, but you're holding up Reagan.

GOV. SCOTT WALKER: Uh-huh.

LARRY KUDLOW: In your political philosophy and vision, tell me why you wanted to make--

GOV. SCOTT WALKER: Well, first of all, I wanna say, g-- Mitt Romney's a great man, woulda been a great president. But I think he had poor advice in this campaign, that it all had to be about Barack Obama. Why I said that-- and I think the misnomer of that campaign was they looked at that closing argument in the last debate that-- where Reagan said, "Are you better off today than you were four years ago," and mistakenly thought that was his entire argument.

What President Reagan said-- and I went back and researched his inaugural address or-- or excuse me, his-- his-- nomination address back in Detroit in 1980, and found some really aspirational words saying, "If you're living in poverty, we wanna lift you out of that poverty. If you're in despair, we wanna help you, lift you up and give you real hope." But it's not hope through the mighty hand of the governor. It's by empowering people through the dignity that only comes from work to control their own life and their own destiny. We should be the ones who talk about not providing a safety net, but lifting people out of poverty.

LARRY KUDLOW: Opportunity.

GOV. SCOTT WALKER: Most people--

LARRY KUDLOW: Social mobility.

GOV. SCOTT WALKER: --don't wanna live in poverty.

LARRY KUDLOW: It's more of a Jack Kemp message--

GOV. SCOTT WALKER: Absolutely.

LARRY KUDLOW: --uplifting message.

GOV. SCOTT WALKER: They don't-- they don't wanna be dependent on the government. They wanna be living the American Dream.

LARRY KUDLOW: So, Mitt was too pessimistic. I mean, he's a fi-- a great man, fine man, smart man. Too pessimistic. In some sense, Obama was the optimist in that campaign. And Mitt--

GOV. SCOTT WALKER: He was falsely--

LARRY KUDLOW: --was in the-- was in the--

GOV. SCOTT WALKER: --optimistic, 'cause he--

LARRY KUDLOW: --that's right.

GOV. SCOTT WALKER: --never planned to carry out--

LARRY KUDLOW: That's right.

GOV. SCOTT WALKER: --'cause his optimism was based on the mighty hand of the government. Our optimism should be based on the people, not on the government.

LARRY KUDLOW: All right. Last question. In Washington-- and I'm still putting you in-- in Washington-- after you're gonna win your November election, which I predict. What would you do? First thing, what would you do? You-- you see the mess down there. You see the problems with the budget, with taxes, with ObamaCare. First order of business--

GOV. SCOTT WALKER: Any-- any--

LARRY KUDLOW: --for a President-elect--

GOV. SCOTT WALKER: --any person--

LARRY KUDLOW: --Scott Walker?

GOV. SCOTT WALKER: --any person who's in that position who's in their right mind should appeal-- repeal ObamaCare and replace it with a market-driven solution, should cut the marginal tax rate and rein in federal agencies like the EPA and the National Labor Relations Board.

LARRY KUDLOW: What do you do about-- your friend Paul Ryan wants to reform entitlements--

GOV. SCOTT WALKER: Uh-huh.

LARRY KUDLOW: --and also, Ryan has a very interesting riff which I really like. He says the GOP should spend a little more time worrying publicly about how to help poor and poverty-stricken people.

GOV. SCOTT WALKER: He's-- he's absolutely right.

LARRY KUDLOW: This, too, is a Jack Kemp message. Kemp was a mentor of mine. This, too, is a Reagan message. Would you go down that route?

GOV. SCOTT WALKER: He's absolutely right. I-- I write a chapter about it at the tail end. If you haven't gotten to the end yet, you should read it, because that-- that's exactly what we talk about. That-- that middle-of-the-road center voters don't just want us to move back and forth on issues. They wanna see that we're compassionate about all people. It's part of the message that-- not just in the presidential election but in state and local elections--

LARRY KUDLOW: Solutions.

GOV. SCOTT WALKER: Conservatives need to show that we are, indeed, compassionate. I know that was a phrase that-- that President Bush used, but to show that we are, indeed, compassionate. But the compassion doesn't always come through more government programs. Compassion's by empowering people to control their own lives and their own destinies.

LARRY KUDLOW: To climb the ladder of opportunity. Government Scott Walker, terrific stuff. Appreciate it.

GOV. SCOTT WALKER: Good to be with you, Larry.

LARRY KUDLOW: Book, Unintimidated. It is available now everywhere as I said. I've read chunks of it. You oughta read it. It's a great read. Now, we're goin' back to ObamaCare-- sorry, I have to do it. It sure looks like the president has been caught in another misleading statement. And don't forget his very ugly new poll numbers. It's all comin' back with you-- what the implications of the Obama crash and burn. I'm Larry Kudlow. Please stay with us.

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