This article is adapted from a case study commissioned by the Brookings Institution as part of its Profiles In Negotiation project. The full Brookings paper on the veterans deal is available here. Jill Lawrence is a columnist for Creators Syndicate and a contributing editor to U.S. News & World Report.

Republican governors in the heartland are taking an economic victory lap for what might be called the Midwestern miracle: Ohio is gathering speed, Indiana’s on a roll, Michigan is achieving the unbelievable and Wisconsin—well, according to Gov. Scott Walker, “the Wisconsin Comeback is working.”

What—you thought this was President Obama’s recovery?


It’s an article of history, almost of faith, that a rising economy benefits the president, his party and its White House ticket. And there’s plenty to brag about: The national jobs report for February was greeted with adjectives that ran the gamut from “strong” to “wow” to “barnburner.” “The United States of America’s coming back,” Obama said Wednesday in Cleveland, and that should be good news for the 2016 Democratic presidential nominee.

But there’s a wild card—make that four wild cards—as the 2016 cycle gets under way: four Republican governors from potentially competitive Midwestern states who are considering presidential bids and, short of that, would make solid vice presidential picks. They are presiding over economies far better than the ones they inherited, and any one of their states could be the tipping point for a GOP presidential nominee next year.

These governors are claiming the resurgences as their own in narratives that don’t mention Obama or the federal government, except as impediments. Yet economists say they are able to call the state of their states “strong” in large part because of the policies Obama muscled through to strengthen the safety net and prevent collapse on both Wall Street and Main Street. To paraphrase Texas populist Jim Hightower’s famous quip about George H.W. Bush at the 1988 Democratic convention: These governors were born on third base and they’re claiming credit for hitting triples.

The irony is rich given that Obama confronted a solid wall of GOP opposition to most of the steps he took, not least from Indiana Gov. Mike Pence, then in Congress. And it is not lost on Obama. He tweaked Republicans on Wednesday for predicting that his policies would “crush jobs and explode deficits and destroy the economy forever,” when the opposite has happened. On top of that, three of the governors potentially eyeing his job—Walker, John Kasich in Ohio and Rick Snyder in Michigan—rode in on the conservative 2010 wave fueled by anger at Obama, the economy and the Affordable Care Act. Obama’s efforts may have helped produce both a Republican ticket and the record for it to run on.

Natural cycles and the steep drop in oil prices have a lot to do with the improving health of the economy, of course. And the governors are doing their best to stoke trade and bring businesses to their states. Wisconsin and Michigan both ranked in the top five states for hiring climates last year on Gallup’s job creation index.

“This administration’s policies are sapping our national vitality and threatening our prosperity,” Pence said at the Conservative Political Action Conference. But that ignores the impact of the stimulus policies—the “big government”—that Obama put in place in his first two years. The relatively slow U.S. recovery has been on fire compared with what’s going on in the Eurozone, where government belt-tightening has been the norm and unemployment remains above 11 percent. U.S. indicators are increasingly positive, meanwhile, and optimism about the economic outlook is growing. “We have emerged from what was a once-in-a-generation crisis better positioned for the future than any of our competitors,” Obama said in Cleveland on what amounted to his own victory lap.

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Walker, who is doing well in Iowa and New Hampshire polls of the GOP field, is the sitting governor who for now appears most viable and likely to run. His economic talking points include a 5.0 percent unemployment rate (lower than the 5.5 percent national rate), 18,000 new Wisconsin jobs created last November (the most since 1990), and more total jobs than before the recession (16,700 as of a Jan. 22 tweet from Walker). Walker attributes the growth to “tough but prudent reforms” and getting government “out of the way.”

But the state added only about 139,000 private-sector jobs in Walker’s first term, far short of the 250,000 he pledged to create. In addition, while Walker likes to contrast the current jobless rate with the state’s high of 9.2 percent, that peak was in January 2010, a year before he took office; the rate was 7.7 percent when he was inaugurated in January 2011. Moreover, the downward trend began as a result of the $800 billion American Recovery and Reinvestment Act—the massive 2009 federal stimulus package that poured money into green energy, schools, infrastructure, health technology and services, state and local governments and tax cuts for businesses and individuals.

Walker faced a $3.6 billion deficit when he took office, due largely to his predecessor’s use of “one-time stimulus funds to pay for ongoing expenses,” spokeswoman Laurel Patrick told me, adding that this makes it hard to argue that the stimulus played a role in Wisconsin’s recovery. But Marc Levine, founding director of the Center for Economic Development at the University of Wisconsin-Milwaukee, says Walker was “surfing on the impact of the stimulus” in his early months. Wisconsin’s share of the money resulted in a 50 percent increase in federal dollars coming into the state and helped push Wisconsin into the top 20 states for job growth in 2010. “We came out of the recession much more rapidly than other states,” Levine said. “My view is the stimulus played a very important role.”

Richard Stock, director of the Business Research Group at the University of Dayton, offers a similar analysis of the Ohio economy. More than 10 percent of the labor force—586,000 people—was unemployed in 2010, he recalls. “It is difficult to describe how awful it was,” he says. “There’s no question that the stimulus definitely was extremely important in helping the state recover,” particularly the money that flowed to infrastructure projects and state and local governments.

The Ohio unemployment rate was 5.1 percent in December and January. Stock says that is partly because the labor force has shrunk by more than 100,000, and at least some of the shrinkage is due to older workers forced into early retirement by layoffs, shutdowns and difficulties finding new jobs. Furthermore, he says, as in Wisconsin and across the nation, the new jobs in Ohio are not comparable to the high-wage manufacturing jobs that were lost. Levine cites similar asterisks in discussing the Wisconsin unemployment rate and Walker’s job creation record. The growth of jobs and the Gross Domestic Product “has been inferior compared to national rates” and to trends in most neighboring states, he said.

Kasich and especially Snyder, facing the bankruptcy of Detroit, had the steepest challenges—though they took office after the worst had passed. Ohio was at peak joblessness of 10.6 percent for seven long months, from July 2009 to February 2010. By the time Kasich was inaugurated nearly a year later, the rate had inched down to 9.1 percent.

Michigan’s unemployment rate topped out at 14.2 percent in August 2009; it was 11 percent when Snyder took office in January 2011 and 6.3 percent in January.

Pence took office in January 2013 when the Indiana jobless rate was 7.9 percent; its high was 10.8 percent in June 2009.

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And then there was the auto bailout, which was not universally embraced at the time of its rollout in 2008 and 2009. While stimulus was the main driver of the recovery, Obama’s commitment to rescuing the auto industry also played a pivotal role in helping the region bounce back. Nearly 20 percent of Michigan’s work force is auto-related, according to the Alliance of Automobile Manufacturers’ 2015 jobs report. The figure is 13 percent in Indiana and 11 percent in Ohio.

“It would have been incredibly frightening in the Midwest” without the auto rescue, Stock said. “Michigan would still be in double-digit unemployment,” added Sean McAlinden, executive vice president for research and chief economist at the Center for Automotive Research (CAR) in Ann Arbor, Mich. Instead, Snyder was able to talk in his 2015 State of the State address about “a great comeback” for the “tremendously exciting” auto industry. “To give you one number that stands out: Since 2010 we had a 48 percent increase in automotive production in the state of Michigan,” he said.

That’s thanks in large part to Democrats and some Republicans who decided that “big government” was crucial in this case. General Motors, Chrysler and their lending arms, facing ruin and unable to get loans in a frozen credit market, received $25 billion from President George W. Bush and another $55 billion from Obama. Ultimately, through repayments, dividends, interest and stock sales, the federal government recovered all but about $9 billion of its outlays. CAR has called it one of the most successful interventions in U.S. economic history.

The center calculates that the government rescue saved 2.6 million jobs in 2009 alone, and $284.4 billion in personal income in 2009-2010—income that kept tax revenue flowing and avoided tens of billions in safety-net spending. Even if limited to direct GM jobs, CAR found, the government “avoided the loss of $39.4 billion in increased transfer payments and lost taxes in just two years: 2009-2010.”

Bush and Obama saw no alternative but to intervene. They feared a “bottomless pit” of dire consequences if they allowed GM to die, McAlinden said. “Main Street would have collapsed. There would be a Main Street Lehman Brothers effect. You’ve got to say ‘it stops here.’”

Yet the auto bailout wasn’t generally popular at the time. Polls showed six in 10 Americans opposed it. So did many prominent conservatives, including Mitt Romney and then-Rep. Pence, who voted against the first installment of auto relief at the end of the Bush administration. He later told CNSNews.com that “I regretfully assume” Obama will feel he has the latitude to expand it. “The American people know we can’t borrow and spend and bail our way back to a growing economy or a healthy domestic automotive industry,” said Pence, who also voted “no” on the stimulus bill. His office declined to comment on his current assessment of those policies.

Snyder was a venture capitalist in Ann Arbor when the economy crashed. He has fuzzed his position on the bailout to the point where it is indeterminate; his default talking point since becoming governor is that he wants to focus on the future, not the past. Asked about the Obama policies, Snyder spokesman Dave Murray says “Michigan’s reinvention took root in 2011,” when Snyder took office and “changed the way the state goes about its business.” The changes included paying down long-term debt, tax reform and regulatory reform.

Kasich was skeptical of the bailout in 2008 and more recently has tried to play down the federal role by citing Ohio jobs created (but not saved) from when he took office. But that was more than two years after the start of the Bush-Obama rescue, and thousands of jobs had already come back. His office did not respond to several requests for comment.

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And some experts think the benefits to these Midwestern states could have been even greater had the governors not turned down some federal money. Walker, for instance, returned about $800 million in stimulus cash for a high-speed train between Madison and Milwaukee. State transportation officials had estimated that temporary jobs directly related to the rail project would top 4,700 in 2012, with permanent spinoff effects expected. Kasich likewise returned $400 million meant for high-speed rail in his state.

Walker also shows no signs of warming to the Affordable Care Act (ACA). The law better known as Obamacare is denounced as a job-killer by conservatives wielding plenty of research and surveys to back up their contention. At the same time, new federal dollars have flowed to premium subsidies and an expanded Medicaid program; millions of lower-income people have gained coverage, increasing the demand for health services and generating job growth in the health sector.

Funded fully by the federal government for 2014-2016 and 90 percent thereafter, the Medicaid expansion is such a windfall that many Republican governors have accepted the money or are looking for ways to do so. Kasich circumvented his party to make it happen in 2013; Snyder signed an expansion late last year; and Pence won approval for an Indiana variation in January.

The economic impact for now has outweighed their concerns that the Medicaid expansion could become expensive for states. Studies have projected that Ohio would gain close to $20 billion in new economic activity and at least 27,000 new jobs from 2014 to 2022; Indiana would see more than 33,000 new jobs and up to $3.4 billion in new activity by 2020; and Michigan could expect 18,000 new jobs and an extra $2.1 billion in economic activity in 2016. But don’t hold your breath waiting to hear “thanks, Obama” from Pence or Kasich, who opposed it then and now says he’d like it repealed except for the Medicaid expansion.

Economists will tell you that governors have little ability to control their state economies. Their Obama-less comeback narratives are like those movies that win best picture Oscars and their directors aren’t even nominated.

But that doesn’t make the movies—or these candidates—any less compelling. Walker has a powerful story of winning three times in four years by taking on unions and delivering conservative governance in a classic swing state. If he seeks the White House in 2016 but doesn’t snare the nomination, it is easy to see a relatively moderate nominee such as Jeb Bush picking him as a running mate to reassure conservatives they’d have a voice and champion in Washington.

Ohio is on a par with Florida in its value in a general election. A religious conservative, Kasich briefly explored a presidential run in 1999, when he was in Congress, and has made it clear recently that he might try again. He won his second term last fall with 64 percent against a Democrat who imploded. A recent Quinnipiac Poll found Kasich had a solid 55 percent approval rating at home and suggested he would be “a formidable competitor in his home state” if he ran for president.

In Michigan, Snyder has two comeback tales to tell, with Detroit out of bankruptcy and the auto industry thriving; he also displays a non-ideological, practical persona that makes him appealing on a national ticket in either slot. Snyder scored a lackluster 37.9 percent approval rating in Michigan last fall, but that was better than Obama’s.

Indiana usually isn’t a traditional swing state, but Obama won it narrowly in 2008. Whether at the top of the ticket or in the VP slot, Pence, long a favorite of both fiscal and Christian conservatives, would inspire turnout and be a hedge against a GOP loss. He had a 62 percent approval rating in a November poll in which more than half of the state residents polled said they’d consider voting for him for president.

But all four of these governors will face a major challenge if they end up on a national ticket: They will have to convince voters that Obama and his party have been bad economic stewards. Given the numbers, that could be a tough case to make, especially in their own states.