Whitman: 'California is on a terrible path'

CNN sent along a transcript of today's interview between Wolf Blitzer and Meg Whitman, the former eBay chief running for governor of California. Whitman, you may recall, visited a Long Beach Chamber of Commerce luncheon last week. She discussed California's fiscal crisis with Blitzer. The transcript follows.

BLITZER:   One of the largest states in the nation sits on the brink of financial disaster.  That's whatCalifornia's governor, Arnold Schwarzenegger, is saying.  Literally hours from now, Californians vote on a host of measures intended to take the state off a road to ruin.

    Opponents are urging defeat, but Schwarzenegger warning of doomsday consequences for California if these measures don't pass, at stake, possibly ballooning California's $15 billion deficit.  The state's already saddled with an 11 percent unemployment rate and it had the third highest foreclosure rate last month.

    My next guest would be dealing with all of this if she becomes governor of California.

    Meg Whitman is the former CEO of eBay.  Meg, thanks very much for joining us.

    You sure you want to be governor of California?

    MEG WHITMAN (R), CALIFORNIA GUBERNATORIAL CANDIDATE:  Well, thanks for having me, Wolf.

    Yes, I do, because I think California is on a terrible path.  And I think someone needs to step in and -- and try to right it.

      BLITZER:  What is the governor, the current governor, doing wrong right now?

    WHITMAN:  Well, I -- first of all, I have a lot of respect for Governor Schwarzenegger.  He's done a number of good things, workman's compensation, the redistricting initiatives.

    But, in the end, he has not stepped forward to cut government the way it needs to be cut.  We have a bureaucracy that has 345,000 people who work in it, 2,000 more than just a year ago.  And think about it.  Two million Californians are unemployed, 176,000 have lost their jobs in the last two months, and, yet, the bureaucracy is untouched.

    And I think, you know, what has to sit at the feet of the governor is the financial situation in the state.

    BLITZER:  He says -- you know, last week, he said he would like to lay off 5,000 of those state employees.  How many would you like to see laid off?

    WHITMAN:  Well, I know, from my experience, that almost any organization, you can lay off 10 percent of the bureaucracy, and actually -- maybe it's easier, actually, with fewer people, and it will not be a hardship on the state.  And, so, that would say that you want to lay off between 30,000 and 40,000 people.

    And while I feel terrible for those individuals who would lose their job, it is in the long-term health of the state of California to get the government to a place where the people of California can actually afford the government that they -- that they -- that they deserve.

    BLITZER:  There's a limit to what he can do.  There's a limit to what he can do, given the role of the state legislature in all of this.  How would you be able to deal differently with a state legislature that wouldn't necessarily want to lay off 30,000 or 40,000 state employees?

    WHITMAN:  Well, you know, at some point, you have to take the hard medicine and do what is right for the state.

    And I think the governor has a number of different levels.  First is the appointments that you make.  The governor can make 4,000 appointments.  And those -- and 400 of those are incredibly important, because they're your agency heads and your department heads.

    And there's at least $15 million of cost savings that can be done by streamlining purchasing, by employing technology to pull this government into the 21st century.  And that can actually be done without the state legislature.  It -- it takes leadership.  It takes courage.

    But a number of -- a large amount of savings can actually be done without the legislature.  And then...

    BLITZER:  Are you one -- are you one of those -- well, let -- I interrupted you.  Go ahead.  Finish your thought.

    WHITMAN:  No, that's OK.

    I was just going to say, you know, you have got to go to Sacramento with, I think, a very focused agenda.  And the agenda right now has to be job creation and job retention.  We have to get the economic engine going again, because the only way to sustainably grow revenues is to grow the people who are working in good jobs.

    The second priority has to be getting government spending under control.  On a per capita basis, we're among the highest in the nation in terms of government spending.  And then my last piece of the agenda would be public education, K-12.  In addition to all of California's fiscal problems, as you know, we were just rated 48th out of 50 states in our K-12 public education system.

    BLITZER:  Well, are you one of those Republicans who would make a no-new-taxes pledge to the people of California?

    WHITMAN:  I would make a no-new-taxes pledge.

    You know, when you actually look at the documents that you're asked to sign, there's a lot more in those documents than just no new taxes.  But we should not be raising taxes on average Californians.

    Here's a really interesting statistic.  Barack Obama is about to give $800 back to the average Californian make $45,000 with two children.  And that same family is going to get $800 from the Obama administration and is going send $732 of it to Sacramento.

    I mean, we just might as well have just done a wire transfer from Washington to Sacramento.  I mean, to the extent that there is a benefit from the Obama stimulus plan for hardworking Californians, we're not going to see it, because it's not going to land in people's pockets.

    BLITZER:  He supported -- the governor, Arnold Schwarzenegger, he supported the governor's economic stimulus package, even though a lot of other Republican governors did not.

    Where would you have stood if you had been governor of California when the president was making his announcement?

    WHITMAN:  Well, it was an extraordinary stimulus package.  And I agree.  Given the economic situation, something was absolutely required.

    I probably would have done it a little differently, and I would have focused all my economic stimulus on one metric, which is, can we increase the number of people who have jobs or decrease the unemployment rate?

    Because, as you know, Wolf, we're in now a consumer-led recession.  And unless we put people back to work, and they are put in productive jobs, I think a lot of the other elements in the stimulus plan are actually not going to help the fundamental problem, which is that employment is too high in the United States and in California.

    BLITZER:  One final question -- among the various Democratic names out there that may be running, Jerry Brown, the attorney general, the mayor of Los Angeles, Antonio Villaraigosa, the San Francisco mayor, Gavin Newsom, who -- who do you see as your biggest threat?

    WHITMAN:  Well, I think, you know, the Democratic field is very powerful.  They -- they're -- you know, have been in politics a long time.

    But I think, you know, by June -- by November of this year, this will still be all about the economy.  And the question Californians will have to answer is, who do they think is best-equipped to create jobs, to balance the budget, to put California back on a sure financial footing?

    And, actually, my 30 years in business and the outsiders' perspective of having created jobs, balanced budgets, will actually stand me in good steady vs. any of those three.

    BLITZER:  Creating jobs, but you -- but I just want to reiterate, you are saying you would eliminate 30,000 or 40,000 state jobs?

    WHITMAN:  Yes.

    But, as you know, Wolf, actually, the private sector pays for the public sector.  So, what you want is, you want the public sector jobs to grow, and you want to run an energetic and efficient and streamlined government.

    I'm not for no government, but I am for energetic and efficient government.  So, if you could actually take 30,000 employees out of the bureaucracy, get the cost structure of the state of California into a good place, so that we could stand up and compete -- you know where we are losing jobs the most?  We are not losing them to India or China.

    We're losing them to Arizona, Colorado, Utah, Texas.  It's inexcusable.  We have to stand up and compete.  And we have got to be a much more competitive state, because those states are -- are -- are stealing our jobs.  And if we're going to have California's economy be strong, we cannot lose another job to a neighboring state.

    BLITZER:  Meg Whitman wants to be the governor of California.

    Good luck.  Thanks for coming in.

    WHITMAN:  Thanks a lot, Wolf.  Good to see you.

    BLITZER:  Thank you.

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