Richmond, Virginia

"We’re friendly rivals,” says Virginia governor Bob McDonnell of his relationship with Texas governor Rick Perry. “Texas and Virginia have a lot in common in terms of business rankings and the criminal justice system. All my relatives are from the Texas A&M area, so I’ve always had an affinity for Texas. He’s a veteran, I’m a veteran.”

McDonnell is sitting on a couch in his office. In about an hour, he’s scheduled to walk a few blocks to the convention center in downtown Richmond to introduce Perry, who is headlining a fundraiser that afternoon for the Virginia Republican party.

Months ago, when McDonnell asked Perry to appear at the event, the Texas governor hadn’t announced his campaign for president. Now that Perry’s in it to win it and has rocketed to the top of the polls, McDonnell’s fundraiser has effectively been turned into a Perry campaign event.

The rivalry between the two men may indeed be “friendly,” but there’s a trace of determination in McDonnell’s voice conveying that the competition with Perry is something he takes quite seriously.

“We are friends, but we’ve always been very competitive because Texas and Virginia have always been at the top of the heap, competing [to attract] the same businesses,” says McDonnell. “He beats me on some stuff, I beat him on some stuff.”

Last year, when CNBC released its annual listing of the “Top States for Business,” Texas was ranked number one and Virginia number two. “So I called [Perry] and said, ‘The only reason we slacked off is because you’re running for reelection and we want to make you look good, but I’m going to kick your butt next year,’ ” recounts McDonnell. “He laughed and said, ‘Yeah, yeah, right.’ ”

At the end of June, the 2011 CNBC rankings were released. Sure enough, Virginia was number one and Texas was number two. “He was the first guy to call me this year, eating crow and say, ‘Okay, you told me!’ ” says McDonnell.

For a guy who is about to introduce the most talked-about GOP politician in the country, McDonnell doesn’t need to worry about being upstaged. He has quietly emerged as one of the most accomplished and popular Republicans, although the national media haven’t much noticed.

That same day last week, Quinnipiac University released a poll showing that McDonnell has a 61 percent approval rating. He is tied with New York governor Andrew Cuomo for the best approval rating in the survey. Even among Virginia’s black voters, more approve of McDonnell’s performance as governor than disapprove—“a highly unusual finding for a Republican office-holder,” observes Quinnipiac.

McDonnell’s approval ratings are also soaring in a state that is by no means a Republican stronghold. Obama carried Virginia by 6 points in 2008, but a year later McDonnell was elected by a 17-point margin.

McDonnell’s legislative achievements certainly measure up to the impressive work Perry’s done in the Lone Star State. Texas may have recently closed a $15 billion budget deficit, but in the last year Virginia, which has less than a third the population of Texas, went from a $4 billion deficit to a $545 million surplus.

Closing a $15 billion budget deficit is by any measure a real test of political leadership, but Perry had the benefit of a GOP supermajority in Texas’s last legislative session. McDonnell isn’t so lucky.

“I’ve got the same issue Obama does—I have a Republican House and a Democratic Senate,” observes McDonnell. Not only did McDonnell have to muster bipartisan support for getting the budget into balance, the latest state budget passed the Virginia legislature unanimously.

On employment, Texas’s record of job creation is unparalleled—over one million new jobs in the decade that Perry’s been governor. However, Texas’s unemployment rate is currently 8.4 percent, where Virginia’s is 6.1 percent.

To be fair, the rate in Texas in part reflects large inflows of unemployed people looking for work. And Virginia’s unemployment rate might be considered artificially low thanks to the large number of federal jobs in the northern part of the state. Still, with unemployment at 9.1 percent nationally, it seems clear that the jobs situation in both states is enviably better than in the rest of the country.

So what’s the key to McDonnell’s success? “We’ve really tried to place the focus on what people really care about. .  .  . [We’re] cutting spending so that we’ve ended up with surpluses, but at the same time investing in bread and butter issues that people really are concerned about: transportation, higher education, job creation,” says McDonnell. “Those were major new investments we made in the budget while we cut dramatically in other areas.”

Focusing on fiscal responsibility, transportation, higher education, and job creation—that template sounds eerily familiar. It would appear that Perry and McDonnell are very much on the same page.

McDonnell recently got a higher education reform bill through the legislature (again, unanimously) and even got substantial Democratic support for the passage of a $4 billion highway bill.

On these issues, Perry’s been more ambitious but less successful. He tried and failed to get 4,000 miles of new superhighways funded as part of his Trans-Texas Corridor. As for higher education, Perry’s still fighting the good fight. His initiative to get Texas to create a bachelor’s degree costing only $10,000 over four years has yet to become a reality, but it is one of the boldest and most-discussed higher education proposals in the country.

McDonnell clearly relishes the competition with Texas, but that’s largely because he sees it as benefiting everyone. “We think it’s healthy, this competition,” he says. “It’s not dog-eat-dog. We sharpen each other. We make the states better, and therefore we make America better.”

Perry seems to agree. While introducing him at the luncheon for the Virginia GOP, McDonnell again—and this time publicly—reminds Perry that Texas is number two in CNBC’s rankings. Perry can’t let the remark slide, and reminds McDonnell and the rest of the crowd that he just signed “loser pays” lawsuit reform in Texas to cut down on frivolous litigation, and he fully expects this latest accomplishment will put Texas back on top.

Still, Perry surely took notice of the unusually spirited standing ovation McDonnell received when he walked out to introduce him. The Texan didn’t skimp on praising his host. “In Virginia you have the right formula,” Perry said, “because you have the right leadership. Bob McDonnell has given the business creators and small-business owners that opportunity.”

So what does it mean that the relatively unsung Bob McDonnell holds his own in head-to-head comparison with the governor who happens to hold a commanding lead in the GOP presidential primary? (In addition to that day’s Quinnipiac poll showing high marks for McDonnell, Public Policy Polling also released a survey showing Perry had a 13-point lead over Mitt Romney.)

At the press gaggle afterward, reporters were not shy about asking Perry whether the popular Virginia governor has potential as a running-mate. “That is thinking too far ahead,” Perry said.

And while Perry’s already been endorsed by Louisiana governor Bobby Jindal and Nevada governor Brian Sandoval, McDonnell is keeping his cards relatively close to his vest.

“I think we’ve got a very strong field and I think we’ve got a number of candidates on the stage that could beat President Obama,” McDonnell says. “I’m a little partial to governors, because when I look at why I think the leadership in Washington is failing, it’s a lack of executive experience and an inability to really focus on getting things done.”

Of the current crop of contenders, only Romney, Perry, and Huntsman have been governors. To further winnow things down, it’s worth noting that Perry and McDonnell worked closely together at the Republican Governors Association, where Perry was chairman and McDonnell was vice-chairman. After Perry quit the association to run for president, McDonnell assumed the chairmanship.

But McDonnell’s only been governor for less than two years (after 21 years in the Army, where he retired as a lieutenant colonel, 14 years in the state legislature, and a stint as state attorney general). The Virginia governor insists he’s not looking at national politics. For now, at least, he says he’s content to spend his time messing with Texas.

Mark Hemingway is online editor of THE WEEKLY STANDARD.

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