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Halfway through our interview, state senator Scott Wagner leaves the room. He is off to grab something from his office here at the headquarters of Penn Waste, Inc., the company he founded 17 years ago and continues to preside over as president. "He's very enthusiastic," Wagner's campaign manager explains. One minute later, he is back, toting a manila folder, a five-inch-thick binder, and a motivational sign that reads "Align Your Expectations With Reality."
"This is one of my slogans," Wagner says. "Align your expectations with reality. If you go from this regulatory environment," he says, gesturing to the manila folder, which contains state regulations on waste-management companies circa 1985, "to that" — he now gestures to the binder, which contains the present day waste-management regulations — "businesses are going to move. What did we expect?"
Sure, it's manager-speak, but Wagner is a manager. "The Bethlehem Steel plant is close to 100 years old," he continues. "There's no longer a need for buggy whips: Someone invented the bicycle." His take on what's gone wrong with Pennsylvania's economy shows a businesslike candor, something utterly lacking from politicians who promise magical growth based on the fantasy of renewed coal and steel production.
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To hear Wagner tell it, that's because he's not like other Pennsylvania politicians. Specifically, he'll have you know he's not like incumbent governor Tom Wolf, whom he's running to unseat in 2018.
When Wagner says that Wolf, a Democrat, "grew up on the other side of the railroad tracks," he isn't just speaking in clichés. Both Wolf and Wagner hail from York County, in the south-central part of the state. York is the county's anchor city, a working-class burg whose major attempt to lure visitors is factory tours of potato-chip plants. During World War II, the York Plan showed factories how to shift from peacetime to wartime production. It's an industrial city, surrounded by farms like the one Wagner was raised on. Wolf, meanwhile, hails from nearby Mount Wolf, named after his well-to-do family, which settled in the area in the 19th century.
The contrasts between the two write themselves. Wagner went to the public Dallastown Area High School; Wolf attended the prestigious private Hill School. Wagner dropped out of community college to start his own business; Wolf went to Dartmouth, joined the Peace Corps, and got his Ph.D. in political science from MIT. Both Wolf and Wagner have run their own businesses, but Wagner's is a waste-management company that he started in 2000, while Wolf was the sixth-generation owner of his family's conglomerate, The Wolf Organization.
Class differences do not an election make, and Wolf's persona is more calm and quiet than to-the-manor-born. He was elected in 2014, running a steady campaign against Republican Tom Corbett, who fell prey to his own controversial plans for reforming the state lottery, liquor-sales system, and budgetary process, and to a series of gaffes. Wolf kept his cool and sailed to a comfortable win.
Wagner and Wolf have sparred over more than just pedigrees. In 2015, Wagner led the charge against a $29 billion budget that his political-action committee said would "be sticking it to struggling taxpayers." A spokesman for Wolf shot back that, "Until [Wagner] has serious solutions . . . everything he says is just hyperbole." Two years later, the state budget ballooned to $32 billion. Wagner was one of few state legislators to vote against it back in June, while Wolf approved it despite lacking a plan to pay for it.
Fights between Republicans and Democrats over budgets are nothing new, but the stakes for this one go beyond ideological posturing. Two weeks ago, Standard and Poor's downgraded Pennsylvania's credit rating to A+, fourth-worst in the country. That makes it more costly for the state to borrow, which, with a deficit in excess of $2 billion, means financing the state budget by issuing more debt just became a less attractive option. Last Thursday, as the budget debate raged, Wolf announced that he was "taking action to manage our state's finances."
"Three years into the job! I mean, come on. Cut me a break," Wagner says. "The state doesn't need another governor who walks around with his coat buttoned. We need somebody who understands what it's like to work in the trenches." His signature initiative as governor on this front would be to institute zero-based budgeting, in which each agency starts from scratch and justifies all of its costs. State Democrats, meanwhile, have pursued their own solution: a tax on shale drillers. That could hurt growth in the state, which is home to the Marcellus Shale. "We're bankrupt, and people aren't willing to look in the mirror," Wagner says. It's not quite true that the state is bankrupt — it can still pay its bills, for now — but the contrast between Wagner's approach and Wolf's tax-and-spend impulses is clear enough.
Wagner sees a lack of accountability everywhere. Politicians in Harrisburg can't envision cutting spending, he complains. The managers of the state's Public School Employees' Retirement System (PSERS) — the pension fund for teachers and administrators — have an annual returns target of 7.5 percent, but couldn't crack 2 percent in 2016. PSERS is grossly underfunded, Wagner points out, and the solution he proposes is simple: "The people managing the money should be fired." Yet generating high returns while staying within the constraints of a pension fund is hard, and low returns are not a problem unique to PSERS: Hedge fund Bridgewater Associates said in 2014 that more than 80 percent of public pension funds could fail over the next three decades. In a state whose demographics trend gray, those are frightening words. Hiring new money managers won't solve the problem on its own. Still, Wagner is right to point out the looming crisis, and he offers a more credible solution — putting new entrants in a defined-contribution plan — on his campaign website.
Wagner understands that Pennsylvania faces more problems than a political bog in Harrisburg or a spate of excessive regulation. "I have a reading addiction: I read Forbes, Fortune, Businessweek, Barron's," he says. "We have to educate people that we're in a changing world." His eagerness to do just that in his home state is palpable. He says that "the students coming out of schools are misaligned with the needs of industry today," and floats charter schools and more vocational-technology programs as solutions. His is a welcome approach for Pennsylvania, where the collapse of the coal and steel industries has led politicians to promise a return to bygone days that is never coming.
His senses are similarly keen when it comes to the opioid crisis, which has hit Pennsylvania hard. Wagner knew something was wrong before the plague was national news, and started the York County Heroin Task Force in July 2014. Since then, he's run over 100 town-hall meetings, worked with the district attorney's office, and chided school superintendents who were lax on the issue. He's seen addiction and death shatter families hoping to be part of the state's renewal. "We need better drug education," he says. "We need to be telling our kids from kindergarten to twelfth grade, Drugs are bad, needles are bad, drug dealers are bad."
This is still a polarized state. Philadelphia and Pittsburgh look askance at President Trump, while plenty of red hats are still proudly worn in the vast expanse between those cities. Wagner has thrown his lot in with the latter group, expressing an affinity for the president and his policies which isn't escaping Wolf's attention. After Trump's equivocation on the white-supremacist murder in Charlottesville, Wolf insinuated that Wagner's slow response meant something dark, sinister. Wagner hit back with a fiery op-ed in Pennlive, writing that "Neo-Nazis and white supremacists have no place in our society, and their ideas and beliefs are so beneath the dignity of this country that the more they talk the less anyone should pay attention to them." A week ago, though, he flew to an event in St. Louis with Steve Bannon, telling reporters that the plane ride made him "500 percent more emboldened."
It's a tricky tightrope to walk — taking pains not to alienate Trump's supporters while distancing himself from the bigotry many associate with the president — but his record should help. His Pennlive essay cites several initiatives he's undertaken in Philadelphia's black community. Though Republicans never win the City of Brotherly Love — Wagner, of course, assures me he will be the exception — he's devoted an unusual amount of time to learning about the problems that plague it, developing a relationship with Tracey Fisher, an ex-convict and the founder of Gateway to Re-entry, a non-profit organization which aims to prevent incarceration and help recent inmates transition back into society. "My goal is to convince the people in Philadelphia living in poverty to take a chance on me," Wagner says.
His concern for helping inmates reenter society is no mere talking point. On the policy front, he has been a champion of criminal-justice reform. Along with a Democratic colleague from Philadelphia, Wagner co-sponsored a "clean slate" bill that would seal the criminal records of non-violent criminals who maintain a clean record for ten years. "There are a lot of people out there who would love to move up the career ladder," Wagner explains. "But there are a lot of companies that disqualify you when you check the box." That's not his policy at Penn Waste, where applicants with a criminal record have the chance to discuss it in their interviews. Wagner wants to give reformed criminals a chance to get jobs elsewhere, too.
Late in our interview, Wagner gets a bit off track. "What if," he muses, "we went one step deeper? What if we helped people on welfare get skills training?" It's a smart proposal, but it's also instructive in what it says about his priorities. "There's an opportunity for a domino effect here, to help people better their lives," he says. "That's what I'll be about when I become governor." With strong polling numbers in the Republican primary — Wagner is outpacing his closest competitor at a clip of 45–16 percent — and solid fundamentals against the incumbent, it seems Wagner has aligned his own expectations to reality.
Pennsylvania's next gubernatorial race might surprise a few people.
Commentary by Theodore Kupfer, a William F. Buckley fellow at National Review. Follow him on Twitter .
For more insight from CNBC contributors, follow @CNBCopinion on Twitter.
©2017 National Review. Used with permission.