RCP: We’ll start by asking about the New York Post report from early this week. Have you been approached about switching races? What’s your commitment to the race.

Lazio: There have been some people that approached me about running for Senate. You know, I take that as a compliment. I think I could win the Senate race. But I told them, I don’t think that’s where the greatest need is, and I’m not looking for a job. I’m totally committed to the race for governor.
 
Maybe it’s an easier race for the Senate. I don’t know. I’ve had a good public sector career, I’ve had a great private sector career. I’m doing this because I think it’s, again, the greatest need and where I can make the most difference.
 
RCP: As a former Congressman, there wasn’t any appeal to the federal office? What’s is it about the governor’s office.
 
Lazio: New York has been the only place I’ve lived. It’s my home state. I’ve watched it over the last several years really frustrate and disappoint people. You look at all these objective criteria, New York’s ranking on a whole range of issues. We’ve been failing. We’re looking at a 40 billion three-year deficit right now. We’ve never faced anything like that. We may have the most dysfunctional government in the entire nation, which is saying something.
 
So if I look at, what’s the motivation to step out of a successful private sector career and go back to the public sector, it’s really to have impact and turn things around and go back to the private sector career. I’m not looking to restart my public, political career. That’s not what this is about for me. So I am completely committed to the race for governor.
 
RCP: You served with Harold Ford --

Lazio: I did serve with Harold, and I’m friends with him.
 
RCP: What’s your reaction to his interest in the race?
 
Lazio: I’m very amused by it. [Laughter] On a personal level, I think Harold Ford is a really good guy. I like him, he’s down to earth, got a great sense of humor. We got along very well in Congress. I don’t agree with him on every issue, but I agree with him on a lot of issues, honestly. He’s been right on things like school reform. He’s looked for ways in which to build wealth – at birth, you give each child X amount of money. So yeah, I think he’s had some interesting ideas.
 
My guess is he won’t have an easy time in the Democratic primary in New York. It’s an easier state in the general election than Tennessee obviously. But it’s going to be, I think it’s going to be an adverse year for Democrats in general. This cycle is going to be a very tough cycle. And I just think it’s going to be – it won’t be an easy primary if he decides to get into it.
 
RCP: It’s been 10 years since you’ve run for statewide office. Why do you think you’ll be more successful this time?
 
Lazio: First of all, the public mood has shifted dramatically. In 2000, it was a more benign political environment, maybe even positive for Democrats. The economy was still strong. Job creation seemed positive. And people were not as agitated for change, for overhaul as they are right now. So I think the public mood is one of the primary reasons why we’re going to win in November.

Number two is, we’re starting early, and we’re better organized than 2000. In 2000, effectively I was airlifted in with five months. This compromises the way you run a campaign – who you can recruit, how you build chemistry with your campaign team, how you execute your strategy. You end up spending a disproportionate amount of money in ballrooms and conference rooms raising money at the outset. And every campaign makes mistakes. I want to make them now and not in September. IF you look at Clinton, she made some mistakes but they were in 1999. In 2000, down the home stretch, she had a well-organized campaign machine.
 
So public mood, early start. I’m better experienced. I think having the last 10 years, being in the private sector, working with great managers have given me some appreciation of the role of management in a campaign. I think it’s absolutely given me a better sense of how you fix these problems, how you turn the state around, and the quality and talent you want to include in, how you manage a complex organization. I think we’ve got better campaign talent that we’ve recruited to the campaign. I think that’s a major positive.

If you look at it objectively, going back to the public mood issue, what happened in New Jersey, the shift of the independents. In suburban New York this last election cycle, two relatively unknown Republicans badly outspent in two counties that are highly populated and increasingly Democratic – in the case of Westchester 2-to-1 Democratic, in Nassau County it’s at least, they now have a Democratic majority in terms of registration – Republicans won. The Republican in Westchester ran four years ago, lost by 16 points. This time he wins by 16 points. The Republican in Nassau County – nobody of any significance predicts a victory there. He gets outspent 5-to-1, he runs a grassroots campaign. And his victory is so unexpected that the incumbent leaves with $2 million in his warchest.
 
So it’s a sign – you look at Scott Brown – this sort of explosion in terms of the public mood. That is very, very different than what existed in 2000. This will be a much more nuanced campaign. I think I’m very well positioned in this race. I’m a suburban moderate. So fiscal conservatism, which is what people are hungry for, and pragmatism on social issues – it’s a great way to sort of attract Democrats and independents and bind the party together. I think I’ve got the optimal ability to unify Republicans – from Rudy Giuliani, who’s endorsed me, all the way to the Conservative Party, which I believe is about to endorse me. That’s important.
 
And lastly, what I’m talking about right now is overwhelmingly economic issues. It’s lower spending and taxes, a plan to create jobs. All that is very consistent with everything I’ve done in the past, my past Congressional record. So when I’m on the campaign trail -- and there’s a lot of skepticism out there in general about politicians -- and that issue comes up – ‘How do I trust you?’ I say, ‘Well don’t just trust what I have to say. Look at what I’ve done.’ The ability to amplify my consistency and to say, my positions are validated by what I’ve done in the past, is a strength. If gives me added credibility.
 
RCP: What is that public mood – is it a reaction to President Obama, is it a reaction to what’s going on in Albany, or is it a general anti-government feeling?

Lazio: That depends on who you talk to. There certainly is an overwhelming sense that Albany is broken and dysfunctional. When I see independent polling data that puts the question out – do you think Albany is broken. It’s 75 percent. So another thing I have going for me is, I don’t have to convince people that Albany is broken. They know it’s dysfunctional and broken. They know it’s a terrible government. They know it’s not working. And it’s controlled completely right now by one party.
 
So without being partisan, it’s a compelling point to say that we’re moving in the wrong direction, the state needs balance, and we need to have somebody that can help provide that turnaround leadership. So that resonates too.
 
Obama’s numbers have clearly come down. I think for me the most important takeaway is that, he’s not likely to have a whole lot of political impact. You look at his efforts to try and get Paterson out. Paterson kind of strengthened afterwards. That’s a pretty good indication, I think, that Obama – to the extent hat he’s got any popularity left, which he does – but whatever popularity he has is not transferable to the state of New York. The people feel like their future is being compromised and at risk. And somebody from outside New York is not going to have much impact in telling them what the answers are.
 
So I think that ends up being at worst neutralized, and at best something where the wind is at our back. And you have probably seen the numbers in terms of the intensity, the Democrats vs. Republicans turning out. It’s a non-presidential year, and when I ran in 2000 it was a presidential year. Bush lost New York by 26 points. There’s only so many Gore-Lazio votes that you’re going to carry, but we got several hundred thousand. So this time around I just think there’s a dramatic difference.
 
RCP: Does the direction of the national party something that has hurt New York Republicans? You had a lot of Republican colleagues in the New York delegation when you left it and now it’s just down to two.
 
Lazio: I think if I was running for [federal] office – if you were to ask me last cycle I would say absolutely. New York – I’d even say New York conservatives – need to have their own brand of conservatism. They actually do, but they’re not branded that way. Democrats attempt to identify them, in many ways successfully, with the southern brand of conservatism. And that has – that’s been an issue.
 
So the ability to unify these different parts of the conservative base, to do well in the suburbs – that will be where I run really well. To run well upstate New York and the rural areas – there’s even more disillusionment up there. And to run well in the city and in the ethnic neighborhoods – you know Queens this past cycle elected three Republicans to the City Council. That hasn’t happened in years. A heavily Asian community – a heavily Chinese and Korean community that voted for Republicans. All of these are the signs of people that are open to voting for a Republican they think is reasonable, that is sort of standing for sweeping, fundamental change in a way that people are looking for. Basically, getting our fiscal house in order, living within our means, not compromising our future, creating more jobs, creating a better business climate, lowering or capping taxes. People are very anxious for those things.
 
RCP: Were there any lessons learned from the special elections in New York?
 
Lazio: Certainly up in New York 23 it’s the need to have unity between Republicans and Conservatives. We’ll have that. I think it’s very important for us to be able to tie those groups together. We have to satisfy the fiscal conservatives, and still keep the social moderates enthused, and appeal to the independents bring them over. I think we’ll do that very successfully. And I think there’s going to be a lot of disaffected Democrats.
 
Paterson I think is in this race to stay, and is not getting out. Cuomo will have a decision to make over the next couple months, whether he challenges the first African American governor in New York’s history. If that primary goes down, it’s going to be a very divisive, difficult primary for both of them. And my guess is there will be a lot of disaffected people in the end. The job of our campaign is to be prepared to appeal to those disaffected people, and to continue to stay on message and be seen as the person who is going to be the turnaround guy in New York. And create this credible perception that we’re going to rely less on party affiliation and more on competence.
 
RCP: You’ve talked about overhauling the state government, possibly creating a unicameral legislature. Is that something you would recommend for other states, or is that something you see unique to the New York situation.
 
Lazio: I don’t know enough about other states. First of all, the idea of a unicameral legislature is meant to stimulate debate. It’s got to be part of a constitutional convention, and there is a whole lot of things we’ve got to do in the short term before we get to restructuring our legislature. But it deserves to have healthy debate.
 
I think it’s been incredibly effective from everything I’ve heard, including my conversations with Bob Kerrey, who I spoke to about this in terms of the political culture in the legislature. The ability to organize around ideas instead of parties, to get things done. To spend a lot less time on partisan activities, and they eliminate what are arguable the two least democratic institutions – the conference committee and the party conferences.
 
It’s a compelling idea in a state that’s become known for stalemate and hyper-partisanship, to try and become more effective and more focused on partisan outcomes.
 
RCP: You mentioned Scott Brown’s campaign before. You were trying to steer donations to his campaign. Do you see that race as a kind of template for what you can do?
 
Lazio: Every state is different, and that’s a federal race. But what it does tell me is that nationally, and more importantly in the Northeast, in blue states, that people, the public mood has shifted fundamentally and dramatically. And I think irreversibly now in November. This wave of almost rejectionist sentiment is building over time. The front wave was this last election in places like New Jersey and these suburban counties I talked about. It will crest by the next election. It may even carry into 2012. But it’s nowhere near cresting right now.
 
I think what it says is, that in a state that is more Democratic than New York, that independents and Democrats are willing to take a look at somebody who is going to reflect some of what they’re worried about. Bringing spending back into line. Having some counterbalance. This sense that government is overreaching and unaccountable. They’re saying enough, and they’re asserting themselves. So I think it’s very powerful. You can’t discount – talking about a state like Massachusetts, with the legacy of that seat – it’s impossible to discount the power of where this guy is polling right now. I think there’s a reasonably good chance he’s going to win.
 
RCP: We’re overlooking the White House, so wanted to bring up some issues there. One specific to New York, this KSM trial coming up. Do you see it having an electoral impact, and what do you make of the administration’s strategy with doing this?
 
Lazio: I’m not really sure what the strategy – you mean the legal strategy or the political strategy? Because I’m not really seeing what the political strategy is, and the legal strategy is fundamentally flawed. … People in the city of New York have lots of scar tissue from 9/11. And you look at this and you say, if the costs of security are a quarter of a billion dollars, then that indicates a pretty significant risk to life. Why in the world would we have that back in our backyard? It’s not just a cost issue. That’s the least of it. But there is significant cost. There’s significant cost in terms of security, there’s significant displacement cost, there’s going to be significant cost to small businesses in the area. And people are really angry about it. They are outright angry about it, including lots of Obama supporters that voted for him, they still marginally support him. But on this they feel completely betrayed.
 
RCP: Just today, I don’t know if you have time to read about the proposal, the [Financial Crisis Responsibility Fee]. Representing and campaigning in New York where Wall Street is a big part of all this, what’s your reaction?
 
Lazio: I haven’t really read the details of this, how it operates. From what I understand it’s exempting community banks.  I’ll give you some observations but I haven’t read it so I’m a little limited here. Number one, it obviously disproportionately hurts New York because it’s New York’s industry. It’s curious to me that our federal representatives have not been more vocal taking positions on things. It’s just the latest chapter in a long run of hammering the financial sector. They made mistakes, and there were problems that were created, and we should be absolutely relentless with proper regulatory oversight. It seems to me, though, that much of the problem was created by federal policies, too. And a lack of regulatory oversight – I’m not sure who’s accountable for that. So far it seems like nobody.
 
Number two is, if the idea is that you’re angry about risk, then a number of the players that took on the most risk are out of business now. So capitalism gave them the death penalty. Number three is, if you think about this rationally in terms of the role of housing in all this, if you had one flaw here with the big banks it was in the Wall Street and securitization. So why not fix that and secure that as opposed to across the board – coming up with this proposal.
 
And finally, I don’t know how you – I just think there’s a broader issue among banks than just a handful of banks. So I’m not, I don’t want to come out against what he’s proposing. Those are just observations.
 
That’s another thing that’s going to be a factor in the campaign, that the fiscal crisis [in New York] is going to be in the news every day between now and election day. And because of the dysfunctional nature of the legislature, the inability to find common ground to solve problems, it’s just likely that the intensity of the resentment, the disillusionment of the public is going to grow. So it makes the case again for somebody who steps forward and pledges the kind of tough decisions and change that people are looking for.
 
RCP: Is that an advantage for you, going up against a sitting attorney general?
 
Lazio: I do, I think it’s a huge advantage for me. First of all, I do believe there’s going to be a primary, the most likely scenario. And in a primary, two things happen. One is, candidates get damaged. Negatives go up. And candidates are forced to take positions. Andrew Cuomo has a big lead right now, but so did Martha Coakley. So did Bob Abrams years ago in New York when he ran against an incumbent senator, Al D’Amato. It was so bad that D’Amato was considering not running.
 
The point being, when you’re attorney general all you do is announce good news. When you get on the campaign trail you’ve got to take  positions. Andrew Cuomo has run exactly one successful race, running in 2006 behind Eliot Spitzer who was winning by 40 points. I think he’s brittle politically, and he is – is profile is exactly what people are not looking for -- somebody who is intensely politically ambitious. Maybe in a normal year that wouldn’t be a big factor. But when people know there are tough decisions that may be politically damaging, that’s not a compelling profile.
 
Number two is, here’s a guy who’s been at the center of Democratic politics in Albany in a year when people are going to reject Albany in droves. It’s so bad that the New York Times, which I don’t think is exactly known as a change agent, compares Albany to a swamp and says everybody from both parties ought to be thrown out. When it gets to the New York Times editorial pages, and they’re at that point of frustration, it’s sort of a reflection of how intense it is out there and how broad based it is.
 
So I see him as absolutely the status quo agent, somebody who’s had the ability to speak up, support Paterson in whatever limited ways on some of the responsible things that Paterson has talked about – he’s chosen not to. Has not had a voice in any of the ethics reforms. Has been on the sidelines in all of the scandal that’s happened in Albany. People are likely, I think, to come to the conclusion that, listen if you were so worried about your political career that you were not going to get involved when we needed you most, how could you possibly be a leader who can turn this state around.
 
Who would have thought Scott Brown would have been competitive? And I think that in terms of experience, political positioning in terms of my politics, my experience and background, the experience of our campaign team, the state of the economy in New York, I think we’re in infinitely stronger position than Scott Brown found himself in a month ago.