Newport Beach, Calif. — The featured speaker at the Western Conservative Political Action Conference October 16-17 was the governor of the state that gave the nation liberal Democrats Hubert Humphrey, Paul Wellstone and now Al Franken. Republican Tim Pawlenty, who is completing his second term as governor of Minnesota, delighted a standing-room-only audience of conservative activists with his dinner address. Quoting Scripture, former Polish President Lech Walesa, and “the great Ronald Reagan,” the 49-year-old Pawlenty proudly contrasted his record in St. Paul of budget-balancing and holding down spending, with the Obama administration’s handling of the U.S. economy: “It’s like “letting Michael Vick watch your dog for the weekend.” Pawlenty has just launched a new political action committee and begun a string of speaking appearances nationwide, leading many to believe he is setting the stage to run for President in 2012. Before his speech, the governor talked to me about key issues and national politics.
Q: So what’s on your speaking schedule in the weeks ahead?
Pawlenty: In a nutshell, I’m still the governor of Minnesota and I’m vice chairman of the Republican Governors Association, and that requires a lot of my attention. And we have this PAC, Freedom First, that’s up and running. In terms of speaking, we have this event here tonight, a PAC event in Minneapolis this November, a speaking date in Washington, and a speech in Iowa November 7. And I spoke to the Republican Jewish Coalition on Wednesday in Washington.
Q: Many of our subscribers tell me they recall my “Veepstakes” interview with you last year, in which you emphasized that you were far more conservative than the last three Republican governors of Minnesota — Harold LeVander (1966-70), Al Quie (1978-82) and Arne Carlson (1990-98), all of whom can honestly be called centrist Republicans. But some say there are issues on which you are not solidly conservative yourself. What is your position on the “cap and trade” climate legislation now before the Senate?
Pawlenty: [The late] Bob Novak wrote that I was the most conservative governor of Minnesota since Ted “Tightwad” Christianson, and he was governor quite a ways back. I wrote a letter to our congressional delegation months ago opposing cap-and-trade. My view on climate change is that we should all take reasonable ways to reduce pollution, but we need to do it in ways that don’t wreck the economy and advance bureaucracies that are corrosive to the economy and markets. The cap-and-trade scheme that is now before the Senate is something I do not support. There have been a number of tremendous developments in recent years around these issues. We have now found natural gas deposits in West Virginia and Pennsylvania and other places that are, with new technology, reasonably accessible. They would power the entire base-load energy of the country for 75 years. That, plus the expansion of nuclear power, plus the renewable portfolios that make economic sense, gives us a way to address the pollution concerns without having the government take over another chunk of bureaucracy and micromanage the economy.
Q: Do you support ANWR drilling?
Pawlenty: I do.
Q: There was some dispute regarding your position on expanding SCHIP [State Children’s Health Insurance Program, vetoed by President Bush in ’08 but signed by President Obama in ‘09].
Pawlenty: This is important. At the time, I was chair of the National Governors Association and the NGA is asked from time to time to submit letters of support or opposition on matters before Congress. On SCHIP, we could not reach agreement as governors on the level of the program, if any, or any agreement on how to pay for it. Specifically, some Democratic governors wanted to raise taxes and Republican governors did not. So the NGA sent a vaguely worded letter saying we support the program and want it continued, but we took no position on the level or the funding. As you recall, there was a great dispute over how to pay for it. Eventually they settled on a tax increase, which some Republicans in Congress supported. I certainly did not.
There were three or four issues, one of which was continuation of SCHIP. The governors supported it. No one wanted to end it. As to whether the governors wanted to expand it, and whether there would be a tax increase to do so, there was no agreement. So we took no position on the expansion or whether to raise taxes to do so.
Q: [Former Massachusetts Gov.] Mitt Romney’s healthcare plan in Massachusetts has been a subject of controversy. How do you deal with the health care issue at the state level?
Pawlenty: How much space do you have? The short answer is you have to allow people to make choices in the market place and let people be in charge of their health care along with their doctor. Minnesota has the highest percentage of Health Savings Accounts in the country: 9.5% of our population. The studies around that show there are significant cost-saving benefits to having people in HSAs. That’s No.1. No.2 is we urgently need medical malpractice reform. Harvard recently came out with a study showing 30% of the medical care in the country is medically unnecessary. This is for two primary reasons: First, doctors are afraid they are going to be sued so they run the checklist regardless of whether it’s needed or not, and second, misplaced capacity of the provider driving the decision as opposed to the medical needs of the patient.
A third thing we should do is, in an economy where people will be changing jobs a lot more than in previous generations, some portability of benefits would be helpful. In a dynamic economy, we should pay for better health and better outcomes — in other words, performance pay. We’re paying for the wrong thing right now. We should allow people to purchase health insurance across state lines. We should allow risk-pooling across state lines. We should incentivize electronic medical records and electronic prescriptions to make the system more efficient. 85% of the healthcare dollars are spent on five chronic conditions: cancer, diabetes, obesity, heart disease and end-of life-stage treatments. Where you go to get your care for those things matters a lot. It matters a great deal as to your healthcare outcomes and the cost. In other words, some places are dramatically more efficient and have higher quality than other places. If you let consumers know that, and you incentivize them to make wise decisions, they do. We have done that in Minnesota with dramatic results.
I will give you one example. The Minnesota Advantage plan is our health insurance plan for state employees. In a very primitive way, many years ago, we tiered the providers in conjunction with the unions, and their back was being broken by healthcare costs, too. We negotiated this resolution: We’d tell the employees, “You can go anywhere you want, but if you choose to go to a place where there’s low quality, bad results, and that’s expensive, you’ll pay more. If you choose to go to a place that’s high quality, has good results, and that’s efficient, you’ll pay less.” And guess what happens? 90% of the entire state employee population migrated to more efficient providers. The good news in all this correlation between efficiency and quality is positive. In other words, the better providers tend to be more efficient.
In three of the last five years, the increases in premiums have been zero to 5%. In the other two years, they have been well below market. So in the last five years, we’ve had medical inflation as defined by premiums paid by employees of the state almost frozen. That’s remarkable. It is driven around consumer empower, around giving consumers information about price and quality that’s user friendly. Given the financial incentives to use this system wisely, it’s a powerful outcome. The health outcomes are very satisfactory to employees and their families. Many studies have us in the top five states in terms of providing health care.
Q: How do you rate President Obama’s performance and what do you think of the health care proposal that came out of the Senate Finance Committee?
Pawlenty: I would rate his performance as deeply concerning. Poor. And I would most absolutely, vehemently oppose the health care bill coming out of Congress. He has been bankrupting the country by exponentially running up the debt. He is signaling weakness and not strength on foreign policy and national security issues. And he’s going to increase taxes and other burdens on the economy that is going to stunt future growth.
Q: Last week, HUMAN EVENTS noted that there are few involved with your Freedom First [political action committee] that one would call “movement conservatives.” What is your response to that?
Pawlenty: Well, it just got started a few weeks ago. [Former Minnesota Rep.] Vin Weber has been a significant figure in the conservative movement and [Illinois businessman] Bill Strong is a conservative. They are the co-chairmen of Freedom First. The rest are more operatives but many are generally conservative in their views. We’re just getting started.