RCP: When you announced your candidacy for Maryland governor last Wednesday, you said, of Democrats: "They spent beyond our means, and we spend within our budget. They kill jobs. We help create them. They whine, and we lead." Two questions. One, how did your opponent, Martin O'Malley manage to balance the budget in the most recent legislative session without raising taxes?

Robert Ehrlich: He use all the stimulus dollars. He used all of the federal dollars he could and so that's why the so phony when it comes to his, "oh, we cut the budget," and all that. What they did was cut the general fund because they had to. It's a constitutional requirement in the state. But they expanded the budget using short term stimulus dollars. They grew the budget so it's all a shell game.

RCP: Two, you've promised to lower taxes if elected. How would you do that and still balance the state budget?

Ehrlich: We use only static analysis here, as you know. You raise the tax, you get x amount of dollars. We never use dynamic analysis here. To give you an example, when they passed the millionaires tax
here they said that we would generate $160 in additional income. We lost $257 million! The sales tax revenue dollars have come in way under projections. So have the income tax dollars. The fact of it is that when you raise taxes you get less of the good or service, as you know. So we're trying apply dynamic analysis to tax policy here and we're trying to remind people that when you lower your sales tax you actually are going to have more Marylanders shopping in Maryland, spending their dollars in Maryland, and accumulating sales tax revenue dollars in Maryland.

RCP: What programs or spending would you cut?

Ehrlich: We're not getting into that stuff yet. We're going to be talking about more specifics concerning the budget. We will have a series of policy pronouncements over the course of the next few months, obviously, as the campaign unfolds.

RCP: What do you say to the the Baltimore Sun editorial that argued that your keeping your weekly radio show on WBAL after you announced your candidacy goes against the "spirit" of the Equal Time rule?

Ehrlich: I don't pay any attention to what the Baltimore Sun editorial page says about anything. You mean the plaintiff? They sued me last time. (Laughs.) The newspaper sued me last time, so we don't -- people who sue you, you tend not to pay them a lot of attention. Now I have to say this, their reporters have been very fair and very balanced, but the editorial page we don't pay a whole lot of attention to.

RCP: How much of an uphill battle is this election likely to be for you?

Ehrlich: It's always an uphill battle. You know, I'm a Republican in Maryland. This is the bluest of the blue. Now, the fact we lost an office with high approval numbers and with a terrific economic performance and surplus dollars and a balanced budget and unemployment one of the lowest in the nation and business confidence doubled - all that is the predicate, the foundation for this campaign. This was a tough call for me, as you know. I was predisposed not to run this race for a long time. But enough people showed confidence in me, including my wife, by the way. Enough Marylanders came forward and said "You really have to look at this again. We really want your ideas back in Annapolis. We don't like this guy's ideas." And after I weighed it all and really looked it objectively, I had to make a gut call. And that was, we can run and we can win.

RCP: Why is Maryland such an overwhelmingly Democratic state?

Ehrlich: You have a large African-American presence here and African-American vote patterns are obviously disproportionately Democrat. You also have a lot of unions, a lot of federal workers. And traditionally unions and federal employee unions have leaned Democrat as well. So when you add those two factors, Maryland is a blue state. Now, it's not the most liberal state by any means. Maryland has a tradition of Democratic Party conservatism. That wing of the Democratic Party used to be the dominant wing withing the Democratic Party in this state.

So as a result Republicans have won from time to time here despite the ratios. I won my congressional seat by 65, 70 percent despite having majority Democratic district. I won in 2002 with a two-to-one registration advantage for Democrats. We lost by, six, six-and-a-half points in 2006 when other Republicans in other states were losing by 10, 20, 25 points. So it is possible for a Republican to win here. It's all about turnout.

And by the way, just because the African-American vote nationally tends to go Democrat, including Maryland, we don't give up. We fight that fight. We fight for every vote including every African-American vote out there. And we do believe this time you're going to see an uptick in African-American support for our ticket.

RCP: Slots have not been a kind issue to you or, really, any Maryland politician who has touched them. Are you going to revisit the issue?

Ehrlich: Slots has been very kind to me. It helped propel me to the governorship in 2002. It's been a very popular initiative with the people. People come up to me regularly and bemoan the fact that particularly Mike Bush and Martin O'Malley have made major mistakes concerning slots. We'll be talking about the negligence that has accompanied the slots debate here over the years. So although we haven't done it right, slots as an issue has generally been a big issue for me every time.

RCP: Michael Steele was your Lieutenant Governor and is now head of the Republican National Committee. What do you think of his performance in that capacity?

Ehrlich: Well, when you're chairman, you get judged on one criterion. One. Have you won? Do you win? And last time I checked Mike was three for three in big races and all the pundits are predicting major Republican gains in the House, Senate, and governorships. So I think when all is said and done Mike's going to be viewed as a highly successful chairman. Now, if you're asking me a specific question about inappropriate expenditures, obviously, inexcusable, and Mike has said as much. And heads will roll, and heads have rolled, as a result. But when you're talking about national committee chairs, regardless of party, it's all about winning big races.

RCP: Who's going to be your running mate this time?

Ehrlich: I've gotten a ton of advice. There are a million rumors here. Because we're so close to Washington, it's been the subject of great gossip in the Post and around the Hill. And the truth of it is, there are some names floating around in my mind but there is no last. We are very early in the process and that announcement will not be made for many months.