The state Capitol building in Madison has been occupied round-the-clock by protesters for nearly two weeks. Fourteen Democratic state senators are still on the lam, refusing to allow a vote on a budget-repair bill. And Gov. Scott Walker has been called everything from a new Hitler to rotting cheese.

Yet the governor sounds unflappable. “I just finished eight years as county executive in Milwaukee last December,” he told me during a telephone interview. “I’ve dealt with unions and angry legislators. I know anytime you challenge the status quo you have to be bold—and take the heat.”

Mr. Walker’s challenge to the status quo is nothing if not bold. Wisconsin, he says, faces an immediate $137 million budget shortfall and a $3.6 billion deficit over the next two years. Part of his plan for putting the state on a sustainable fiscal path is to have state workers contribute more to their pensions and health-insurance plans, although they would still pay less than the national average for government workers.

But what’s made him a national target of rage—or a hero, depending on your point of view—are his proposals to limit the power of public-employee unions. “We have to cut money the state sends counties and cities,” he says, and “the collective bargaining changes I propose will save them more than those cuts by giving them the flexibility private employers have to control costs.”

He’s confident his plan will become law. The state assembly passed it in the wee morning hours of Friday, and pressure is building on the state Senate Democrats who have fled the state to prevent a vote. If the state doesn’t pass a budget and refinance $165 million in debt by Tuesday, Mr. Walker will have to send out 1,500 layoff-at-risk notices to state employees. Ultimately, 5,000 state workers and an equal number of local employees could lose their jobs.

Corrections & Amplifications
Indiana Gov. Mitch Daniels favors a dramatic reworking of Social Security benefits, but not for those who would enter the system in the next 10 or 15 years. This story doesn’t make clear that the changes wouldn’t apply to those receiving or about to receive benefits.

CULVER, Indiana—Pundits say he’s too short, at 5-foot-7, and lacks the requisite pizzazz to be elected president.

Indiana Gov. Mitch Daniels believes he faces a taller challenge as he ponders a White House run: Could voters warm to his message that the country is doomed unless it slashes its debt and radically revamps the popular Social Security and Medicare programs?

In any other year, a campaign platform that gloomy would render a politician toxic. Today, with concerns over the nation’s fiscal health on the rise, the Indiana Republican’s wonkish bravado is making some think he is a good fit for the moment.