I like this arrangement:
I think that this would move the Blue area to a possition very close to mine politically. I included some more Liberal states such as IL, Maryland, Michigan and Washington, because I wouldn't want the country to swing to far right. Given this arrangement, the new Blue country would be just right of center and the "New Politics" would form around that center.
The new Red country would be a Social Democrats paradise until they taxed the Hell out off all sources of revenue and are invaded by Quebec.
California would just sort of exist.
California is very conservative except for two cities.