Madison, Wis.

Sitting in front of an oversized HD television in the basement of the governor’s residence, a relaxed Scott Walker settles in to wait for Barack Obama to begin the first State of the Union address of his second term.

The residence is otherwise empty. Walker’s wife, Tonette, is back at the family home in Wauwatosa, where he would join her later that evening. Aside from one security officer, there is no staff. Walker fetched plastic-wrapped dinner from the kitchen counter—roast-beef sandwiches on kaiser rolls, raw veggies, potato salad, and deviled eggs. The governor, on antibiotics for a sinus infection, opts for an IBC Root Beer rather than a cold (and exceptionally tasty) Spotted Cow, brewed nearby in New Glarus. One of the owners of the brewery, Walker says, is at the speech as a guest of Michelle Obama.

Out back, beyond several feet of fresh, untrampled snow, the surface waters of Lake Mendota are frozen solid. Not long ago, during the chaos and controversy that attended Walker’s budget reforms in 2011 and 2012, those waters made it possible for protesters to register their displeasure with Walker by boat. But things are quiet now, and not just because it’s winter.

Walker’s reforms worked. In two years, Wisconsin’s $3.6 billion biennial deficit has disappeared. The latest projections from the state show Wisconsin with a surplus of $342 million, a figure that does not include funds deposited into the state’s “rainy day” account. As Washington, $16.5 trillion in the red, debates whether the federal government has “a spending problem,” Walker is rolling out additional reforms to make state government leaner in advance of the presentation of his next budget on February 20. Among those new proposals are major changes in Medicaid, welfare, and taxes, all of them designed to further reduce the role of government in the lives of Wisconsinites. With his party in control of both houses in the state legislature and a wonk’s enthusiasm for policy innovation, Walker may be the closest thing to the anti-Obama that exists in a state capitol today. He watches the president’s speech with a keen eye on its implications for states and its broader philosophical message.

As Obama begins, Walker’s eyes alternate between the TV and his BlackBerry, on which he reads along with the president and notes every time Obama departs from his prepared remarks. The president opens with language that could have come from a Ronald Reagan speech, with a call for a limited government that “encourages free enterprise, rewards individual initiative, and opens the doors of opportunity to every child across this great nation.”

Walker anticipates that Obama is saying this to set up a contrasting argument. “I agree with all of that,” he says. “It’s too bad everything he’s going to talk about tonight contradicts that.”

As predictions go, that’s not exactly brittle-limb territory. Moments later, Obama begins his aggressive defense of government activism, and Walker begins doing what conservatives across the country are no doubt doing as the president speaks: talking at the television. Walker never raises his voice, but he offers a Mystery Science Theater-style running commentary on Obama’s claims and promises.

Obama: “Most Americans—Democrats, Republicans, and independents—understand that we can’t just cut our way to prosperity.” (Walker: “We can’t spend our way to prosperity, either. We have to grow.”) “They know that broad-based economic growth requires a balanced approach to deficit reduction, with spending cuts and revenue, with everyone doing their fair share.” (Walker, shaking his head: “How many times can you tax the rich?”)

Obama: “Let’s agree, right here, right now, to keep the people’s government open, pay our bills on time, and always uphold the full faith and credit of the United States of America.” (Walker: “To pay your bills on time means you don’t spend more than you have.”)

Obama: “I urge this Congress to pursue a bipartisan, market-based solution to climate change.” (Walker: “If there are market-based solutions to climate change, why do we need Congress to act?”)

When the camera focuses on a miserable House speaker John Boehner after a line that caused Democrats to jump to their feet, Walker is sympathetic. “That’s got to be the worst job. You almost hope for a line you can get fired up for just so you stand up and get your blood circulating.”

Walker, on Obama’s universal preschool proposal: “Where does that money come from?” On the minimum-wage hike: “We need jobs that are well above the minimum wage, and this will keep young kids who want a job from being able to get one and get into the workforce.”

When the speech is over, Walker offers praise for two passages—on immigration (“not half bad”) and fatherhood—but overall thinks the address was a clunker. “It’s a Trojan horse for more spending,” he says. “I don’t think he made the moral case for why we have to spend more money. He gave us a list of programs and he kind of gave the false perception that we can do all of this without shared sacrifice.”

Walker’s chief of staff, Eric Schutt, had joined the governor halfway through the president’s address. After the speech, he presented the governor with the proposed slides for a PowerPoint presentation on “Entitlement Reform” that Walker would give the next day. Walker had sketched his slides out on a single sheet of paper as he flew across Wisconsin, and his staff, apparently accustomed to the chicken scratching, used the draft to construct the presentation.

The announcement was a big one. Among other things, Walker declared that Wisconsin would pass on federal funding for Medicaid. He made this decision, at least in part, over concerns that the deteriorating fiscal situation of the federal government would leave Wisconsin responsible for making up the difference when that funding is cut in the future. “I don’t think it’s reasonable for us to assume the money is going to be there. It’s my job as governor to consider both state-level finances and federal, and the feds are only going to be paying 100 percent for a few years.”

Walker’s plan seeks to shift some Medicaid recipients—those with incomes between 100 percent and 200 percent of the poverty level—to the health care exchanges set up under Obamacare, in which they will be eligible for federal subsidies to buy coverage. Those under the poverty line would remain on Medicaid. Walker’s office projects that this will result in a 47 percent reduction in Wisconsin’s uninsured and keep the state from opening itself up to greater dependency on a federal government unable to pay its bills.

Walker proposed other reforms, too, including new or additional requirements of those receiving food stamps and unemployment benefits. And his budget proposal will offer what one source describes as “significant tax cuts that are down payments on future tax cuts.”

Walker’s new proposals won’t generate nearly the kind of attention that his budget reforms did. But his continuing reforms, like his running commentary during the State of the Union, suggest that the government in Wisconsin is heading in a very different direction than the one in Washington.

Stephen F. Hayes is a senior writer at The Weekly Standard.

Next Page