Last fall, as the popular history went, Republicans were locked in a civil war pitting Tea Party purists who wanted to stand on principle against pragmatists representing the party's establishment. But this lazy narrative obscured the reality — there were many Americans who wanted Republicans to stand on principle while still recognizing the realities of governing. On Sept. 22, about a week before the government shut down due to a dispute over the funding of President Obama's health care law, Wisconsin Gov. Scott Walker wrote on Twitter: “Government is too big. So we should limit the role of government in our lives, but the government that is left should work well.”

Walker, who is facing re-election this year and is seen as a possible GOP presidential candidate in 2016, isn't quite so easy to pigeonhole as either a squish or a reckless ideologue. Elected in the Tea Party wave of 2010, Walker became a conservative rock star shortly taking office for standing firm on his plan to balance the budget — in part — by reforming collective bargaining rules. He stood his ground amid massive protests, a nationwide assault by unions and liberal activist groups, and a maneuver by Democratic senators to flee the state in a failed effort to block his bill.

In the face of tens of millions of dollars spent in efforts to recall him as well as Republican lawmakers, he still managed to rack up an impressive list of governing accomplishments. The $3.6 billion deficit he faced upon taking office has now been turned into a surplus of more than $1 billion, which he plans to return to taxpayers. His $500 million tax cut proposal has cleared the state legislature.

The Washington Examiner spoke to Walker recently, and he offered his thoughts on how Republicans could stand on principle while advancing a reform agenda. The wide-ranging interview also delved into his upcoming re-election; the politics of Obamacare; his approach to the Medicaid expansion; and his views on America's role in the world.

Earlier this month, Walker said, he talked to Sen. Mike Lee, R-Utah, after Lee spoke at the Conservative Political Action Conference. In his CPAC speech, Lee (who was one of the early proponents of the push to defund Obamacare before Sen. Ted Cruz, R-Texas, took the leading public role) urged conservative activists to do the hard, gritty work of developing a positive governing agenda that advances their principles.

“Like Mike Lee said, you can do both,” Walker said. “You don’t have to compromise one for the other, meaning you can stand up for your principles, you can push your core beliefs, and you can still govern effectively.”

He continued: “As I've said many times before, that's why I think Republican governors are doing so well across the country even in some key battleground states. We've got a very optimistic message, we can lay out where we want to go and what we want to do, we talk about it in terms that are relevant. We're not talking about sequesters and debt ceilings and fiscal cliffs, we're talking about how your kid's school could be better, how your neighbor who has been out of work for the past six months can find a job, how we're going to balance the budget in a reasonable way. Those are things people want to hear about. And then we're showing we've got the courage to act on it, that we're fighting for the hardworking taxpayers, not just fighting for the sake of fighting like many people think they are in Washington.”

Walker sees this as the key for Republicans to win over persuadable voters who are open to voting for leaders in any party. This is something that he's had to learn about in Wisconsin, a traditionally blue state that voted for him in a recall election in June 2012 and then went for Obama that November.

“What (persuadable voters) want more than anything is leadership,” he said. “They want people to spell out what they’re going to do, to have a plan, and to feel confident they think they’re going to act on it. And that’s something they very much gravitate toward. So I do believe if we say, without 100 pages of detail, but say — one, two, three, four, five — here are the things we’re going to do, and here’s a summary of how we’re going to do each of those things and why it’s important, I think voters gravitate toward that.”

Back in 1994, Republicans swept into control of Congress on a pledge to shrink government. After some early successes, President Clinton's re-election — and a sentiment that they lost battles over shutting down the government — triggered a backlash within the Republican Party against small government beliefs. Desperate to win, Republicans got behind President George W. Bush's “compassionate conservative” message in 2000, and the size and scope of government exploded over the next decade. The disappointments of the Bush era fueled the resurgence of limited government beliefs that manifested themselves in the Tea Party after Obama took office. The question is, following last fall's government shutdown, will Republicans lurch back toward embracing a bigger role for the federal government once again?

“I think the federal government is too big, too expansive, too much a part of our lives, and I’d like to see it limited in size and scope,” Walker said. “But I think the best way to get there is through reform.”

He explained: “It’s a phrase I use often: Austerity is not the answer, reform is.”

He said people historically have thought of two basic ways to balance the budget — either cutting spending or raising taxes.

“We chose a third option,” Walker said. “We chose putting in place reforms that certainly allowed us to balance our budget in ways that controlled spending, but it was driven by reforms. It wasn't just saying, ‘'OK, we're going to cut across the board.' In our state, more than half of our budget is aid to local government. So if I just did across the board cuts, I would have hurt schools as much as anything else and that would have been truly devastating. Instead, by changing collective bargaining, by reforming things there, we were able to reduce the amount of money that states send to schools, but in the end, still allowed schools to save enough to more than make up for that and in many cases to hire more teachers and put more money right in the classroom.”

Walker argued that his approach is more sustainable in the long run.

“If we had just made cuts, then a year from now people might say, ‘OK, now that things are better, let’s use all this money to restore all those cuts,’” he said. “Well, we were able to offset those reductions through our reforms.”

He said Republicans seeking to limit government at the federal level could pursue a similar strategy.

“For us to be sustained in limiting — truly limiting — the size and scope of the federal government, we need to show better ways to do things,” he said. “Whether it's at the federal level or I prefer — whether it's now or in the future, whether I'm governor or not — I'd prefer more of those things that the federal government has encroached upon be done either by the state governments or ultimately by the people, which is an inherent concept in the 10th Amendment. To me, part of this is, the answer can't just be, ‘OK, we're going to slash, we're going to cut our way back to limited government.' It should be, 'We're going to reform our way toward a more limited federal government.' To look at key areas that the federal government has encroached on over many, many decades and say, 'Maybe this is a better responsibility going back to our states, our local governments, and even just the people themselves.'”

One illustration of Walker’s governing style could be seen in the way he chose to respond to Obamacare. Like most Republican governors who opposed Obamacare, he faced the question of whether to agree to expand Medicaid through the law. As it turned out, the design of the existing Wisconsin Medicaid system allowed Walker to craft a unique solution.

In Wisconsin, under a plan that was in place before Walker took office, Medicaid would theoretically be available to individuals earning up to twice the federal poverty level. The catch was people could only obtain coverage if they won a slot through a special lottery. What Walker did was scrap the lottery system and bring down the income eligibility threshold for Medicaid. This enabled the state to offer coverage to all residents at or below the poverty level. Wisconsin isn't participating in the expansion of Medicaid through Obamacare, but the state is helping to transition those above the federal poverty level into insurance through the state's insurance exchange. When technical problems plagued the initial rollout of Obamacare, Walker worked with the legislature to delay the reforms by three months, so they are set to go into effect on April 1.

In the meantime, Walker has encouraged state agencies to work with individuals to help them transition to coverage on the exchange. “Even though I’m obviously not a supporter (of Obamacare), I don’t want people to fall between the cracks,” he said.

Interestingly, though liberals have accused Republican governors of trying to sabotage Obamacare, Wisconsin is one of a small number of states where signups for health insurance through February tracked better than projected.

“At least for me, and probably other governors who are in a similar position, we’re not proponents of the law, but it is the law, and more importantly, until we can change and come up with something better to replace the law, we still care about our constituents, we still want people to do well,” he said. “A lot of people think that Republicans like me would want to sabotage the law by making it hard or difficult for people to sign up. I think that’s somewhat shortsighted by our critics, because what we care about more than anything are the people we represent.”

Walker said he thinks that Obamacare will be a more significant issue this year in campaigns for federal races for senators and representatives as opposed to state offices such as governor (unless it’s a situation where a Democratic gubernatorial nominee was previously a member of Congress who voted for the law).

“For Democrats in general, it has a negative impact, just because it's completely soured the American people on President Obama,” he said. “It is the single largest reason why his numbers are tanking. But it's not the only reason. I think that on top of NSA, on top of other questions that are out there, just collectively make people be a little bit more suspect … (and lose) their confidence in the president.”

In his own state, he said: “The thing I've seen change in Wisconsin is that a majority of people thought (Obamacare) was a good thing before the meltdown last year, a majority of people were favorable toward the president. Those numbers have dropped dramatically. And it won't be the defining issue in my race like it will be in some of these Senate races, but it's kind of a looming factor out there in terms of the overall overreach. And the biggest impact it has in my state is it makes it hard for the president to come in and campaign for my opponents or other opponents like that, even though on election day, I don't believe most voters in Wisconsin will be focused on Obamacare when they vote for governor.”

Though it isn't an issue governors typically have to deal with, a combination of Russian aggression in Ukraine and Obama's diplomatic efforts on the Israeli-Palestinian conflict and the Iranian nuclear program have brought foreign policy issues back to the forefront of the national conversation, triggering a debate among Republicans as to the proper role for America in the world.

The media have tended to divide Republicans into the non-interventionist camp led by Sen. Rand Paul, R-Ky., on one side and the school most associated with Sen. John McCain, R-Ariz., on the other, which sees a more active role for the United States in world affairs. Cruz recently made waves by noting that this was oversimplified. He argued that he believed America should have a strong role in the world, but just not quite the role that the McCain crowd envisions. Though Walker hasn't had reason to flesh out much of a foreign policy philosophy from Madison, should he seek higher office, his comments suggest his impulses would be similar to Cruz, rather than in the Paul or McCain camp.

“I believe in a strong America and not just from a military standpoint, but overall,” he said.

Walker recalled that on Feb. 7, 2011, the day after the Green Bay Packers last won the Super Bowl, he gathered for dinner with his cabinet. With a big battle coming up over his budget proposal, he likened the situation to when President Reagan fired striking air traffic controllers. Not necessarily because in both cases unions were involved, but because they were both defining moments for their administrations.

“When Ronald Reagan took that action against the air traffic controllers, that in my mind was the beginning of the end of the Cold War,” he said. “And the reason was, from that point forward nobody doubted how serious Ronald Reagan would be as president. Our allies knew that they could trust him, that he was rock solid. Our adversaries knew not to mess with him. And even though he presided over an incredible buildup in our nation’s national defense, in our military, we had very few, very limited military engagements during his eight years as president.”

But, he said, Obama has communicated the opposite message.

“To me, if you have a strong America led by a strong president who makes serious statements about what they mean not only on national security and foreign policy, but on all other issues, we're not going to be faced with many of these situations because people will know if they're allies we can be counted on and if they're adversaries not to mess with us,” he said. “And when we have an America where … Prime Minister Netanyahu was in the White House getting the cold shoulder from the president who still can't figure out exactly where they stand on Israel, and when you have… a red line in discussions about Syria which apparently (he) was never serious about doing anything about, no wonder, whether you were in Iran or Russia, or anywhere else around the world, no wonder people feel certain comfort taking action because they don't see this administration as willing to act. I'm not necessarily encouraging that we draw red lines all over the place. My sense is just, you shouldn't point a gun at somebody if you're not prepared to shoot.”

Any discussions of Walker’s potential as a presidential candidate would be rendered irrelevant if he fails to win reelection this year. He is facing Mary Burke, commerce secretary in the administration of Walker’s Democratic predecessor, Gov. Jim Doyle, and a former executive at Trek Bicycle Corp., a company her father founded. Walker said he expected the race to be close given the nature of the state.

“We're a state where I won in the recall and then a few months later the president and Sen. Tammy Baldwin carried the state,” he said. “You couldn't have bigger contrasts politically than each of us. So it's a hard state to predict. It's an evenly divided state politically.”

He said his campaign will focus on an overarching attitude. “Are we going to go backward, or are we going to go forward?” he said. “Our argument is going to be that we laid out a plan to move the state forward, we've moved the state forward, we took a major $3.6 billion deficit and turned it into a $1 billion surplus, we lowered taxes by $2 billion, we've seen the unemployment rate go down to the lowest it's been in more than five years.”

The parallel argument, he said, was that under his predecessor’s administration that Burke was a part of, deficits swelled, the economy suffered, and taxes went up.

Walker said: “My argument is going to be, why would we want to mess with success?”