Chairmen Kaine & Steele; Gov. Schwarzenegger

Chairmen Kaine & Steele; Gov. Schwarzenegger

By Meet the Press - January 10, 2010

GREGORY: Good morning, live from Los Angeles. We have come here to put a spotlight on a state that is on the leading edge of this country's economic downturn. We'll speak exclusively to Governor Arnold Schwarzenegger in just a few minutes, but amid all the political tension in this midterm election year, there is some news developing this weekend back in Washington. The president released a statement just yesterday, standing behind the Senate Majority Leader Harry Reid after some racially insensitive remarks Reid made during the 2008 primary campaign about then-candidate Obama were reported in a just-published book by reporters Mark Halperin and John Heilemann.

Here with us live to talk politics, the chairmen of both political parties, DNC Chair Governor Tim Kaine and RNC Chair Michael Steele. Good morning to both of you.

KAINE: Good morning, David.

STEELE: Good morning.

GREGORY: Let me start with those remarks by Harry Reid as being reported in this new book, "Game Change," about the 2008 race. "Senator Reid was wowed by Obama's oratorical gifts and believed that the country was ready to embrace a black presidential candidate, especially one such as Obama, a, quote, "light-skinned" African- American, quote, "with no Negro dialect, unless he wanted to have one," as he said privately. Reid was convinced, in fact, that Obama's race would help him more than hurt him in a bid for the Democratic nomination."

Senator Reid quickly apologized. He spoke to President Obama yesterday, who, as I mentioned, issued a statement saying the case is closed on this, he accepts the apology.

Governor Kaine, is the case closed? Should there be a consequence for these remarks?

KAINE: David, I think the case is closed, because President Obama has spoken directly with the leader and accepted his apology. The comments were unfortunate and they were insensitive. They were in the context of praising the senator and acknowledging that the senator could be a great president, but they were still insensitive.

I think Senator Reid stepped up, acknowledged that they were wrong, apologized to the president. He's accepted the apology and we're moving on.

GREGORY: Michael Steele, back in 2002, Trent Lott was ousted as majority leader for racially insensitive remarks. He at that point said it's Strom Thurmond, who ran as a segregationist for president, had he been elected president, that the country wouldn't have had some of the problems over all those years. Then-state senator Obama said at that point that Lott ought to be ousted a majority leader. Do you see a difference between then and now?

STEELE: Oh, yes, there is a big double standard here. And the thing about it that is interesting is that when Democrats get caught saying racist things, you know, an apology is enough. If that had been Mitch McConnell saying that about an African-American candidate for president of the United States, trust me, this chairman and the DNC would be screaming for his head, very much as they were with Trent Lott.

And the reality of it is, racism and racist conversations have no place today in America. This term, this, you know, like he's going to pass, for example, for white America because he, you know, has got this Negro dialect that he can turn on or turn off, and he's light- skinned, that's anachronistic language that harkens back to the 1950s and ‘60s, and it confirms to me a mind-set that is out of step with where America is today. But I can assure you that if I had, as national chairman, said that, well, it's all behind us and he's apologized, let's move on, no one would be accepting that. There has to be a consequence here, if the standard is the one that was set in 2002 with Trent Lott.

GREGORY: Is the consequence that Senator Reid should step down as majority leader?

STEELE: I believe it is. Well, from my perspective, whether he steps down today or I retire him in November, either way he will not be the leader in 2011.

GREGORY: Governor Kaine?

KAINE: Well, first, the senator said -- or I mean, Chairman Steele said earlier this week that the Republicans were not going to win it back, so Leader Reid is still going to be the leader. But I will say, anybody looking at Trent Lott's statements praising somebody who had been a pro-segregation candidate for president, will see that there is no comparison between those comments and those of Senator Reid's.

Now, the senator did make comments that were wrong and insensitive, and he's apologized, but he made them in the context of promoting the candidacy...


KAINE: ... the candidacy of Senator Obama.

GREGORY: So you don't think he should resign. You don't think he should resign.

KAINE: Absolutely not.

GREGORY: Let me move on more generally to the politics of the country and the mood of the country right now. Chairman Steele, how is the mood around the country?

STEELE: The mood of the country right now is sour. People are angry, they are frustrated, they're scared. And I think you see and have seen certainly in 2009 elections and you will see this year the public standing up and saying they've had enough. They're saying no to more taxes, they are saying no to more government. And as we're about to celebrate this one-year anniversary of this administration, what do we have? We have no health care, we have no jobs, we have no money, and we owe $13 trillion worth of debt. That is not lost on the American people right now, and so they're going to the polls, they're going to their town halls, they're going to the streets of the country, and they're saying enough. And they're putting the leadership on notice. Pay attention to us, listen to us, we're telling you what we want and what we don't want, and yet this administration and this Democratic Party has a tin ear to the fact that people out there are hurting. We haven't created the jobs, and yet now we're going to have another conversation about jobs? That should have been the conversation on the first day, not, you know, the things that the administration has pursued.

GREGORY: Chairman Kaine, it is a very difficult year to be an incumbent party, as the Democrats are.

KAINE: Well, David, it's a challenging one. As you know, the history is this, that midterm elections for president since 1900, the president would normally lose about 28 House seats, four Senate seats, lose governors races. But the good thing about President Obama's team is that they're not -- used to an uphill climb. We're going to do a lot better than people think for three reasons. First, this president does have a record of success. From day one, focused on economic recovery in ways that have cut job losses from 800,000 a month now in the last month to 80,000 a month. We're not where we want to be yet, but thank goodness we have arrested the freefall of the economy and we see positive signs throughout the nation. We're not where we want to be yet.

Second, the other side has more retirements than we have. I know we'll probably talk about that, but just on these retirements this week, 14 House Republicans have announced their retirement, 10 Democrats. Six Republican senators have announced their retirements. Two Democrats. Four Republican governors have announced their retirements, two Democrats. That's going to help us.

And finally, the Republicans have demonstrated that they're not ready to lead. From saying no to everything to having an internal battle among the party, chasing Arlen Specter out, chasing Dede Scozzafava out of the race, the Republican nominee in the congressional race in upstate New York. Just this week, kicking out the Florida GOP party chair. And many mainstream Republicans facing primary battles or censures, like Senator Graham. There is a civil war that's corrosive on the Republican side that is going to enable us to do a lot better than many folks think.

GREGORY: Chairman Steele, earlier this week, you said you didn't think that the Republican Party could retake the majority in Congress in 2010. If you think that President Obama is doing so poorly, why did you say that? Why do you believe it?

STEELE: Well, no, the rest of that was if we're not prepared to do it, if we don't have principled candidates out there running as we need to, and we have those candidates. We have those individuals out there who are already making a mark. Look, I'm excited about the fact that we're going to engage in a very healthy battle and campaign this year. Look at what we did in 2009. We won New Jersey governorship. We won the governorship of your state. You know, the reality of it is, we have candidates with ideas that people want to pay attention to and follow.

Right now, in Massachusetts, Scott Brown is doing a valiant effort by listening to the people of Massachusetts and talking to them about common-sense agendas that empower them from the bottom up, not government down. So the reality of it remains this...

GREGORY: All right, I just want to be clear...

STEELE: This administration has -- this administration has put some things on the table that have turned America off. The question isn't whether or not the Republicans take the House back, it's whether or not the Democrats can keep it, and right now, they can't.


GREGORY: Let me just be clear -- hold on, Governor Kaine, let me be clear, Chairman Steele. Do you think Republicans will regain control of Congress, yes or no?

STEELE: Absolutely. Absolutely. The rate we're going now, the ground game we're putting in place, we absolutely can take the Congress back this year.

STEELE: There will not be a 60-seat majority for the Democrats come January of next year. There's parity that's going to be created, and the Republicans are going to create that parity.

KAINE: David, let me go right back to what Chairman Steele said earlier this week. He said that the Republicans were not going to take Congress, and he said why. He said it's because they are not ready to lead. We see that over and over again, a philosophy that just says no to everything.


GREGORY: I want to get into some specific issues...

KAINE: ... is not what the American public wants.

GREGORY: Hold on, I want to interject some specific issues and have some narrow, more targeted responses on particular issues. You'll hear from Governor Arnold Schwarzenegger , Governor Kaine. One of the things he says -- and by the way, he was an early supporter of the notion of health care reform, the White House was relying on him. He says that the burden that health care that's coming down the pike will take -- the burden it places on states is onerous, that it's akin to beating up on a state like California, which has a $20 billion shortfall because of the mandate to expand the Medicaid rolls, including some other demands on the states. You're a governor. Do you understand what he's saying?

KAINE: David, I do. But I've looked at this very carefully in connection with the Virginia budget, and I think what is often missed is that there's going to be some cost to states to expand Medicaid, but then that will take huge financial burdens out of state budgets that we're incurring right now to take care of those who are uninsured. Virginia is an example. We have over a million, 1.2 million Virginians that are uninsured. And we spend hundreds of millions of dollars every year to take care of them in the emergency rooms for serious emergency treatment that could have been prevented. Under this health reform bill, for example, preventive care is no co- pay, so we're going to move toward prevention. State budgets are going to save dollars that we're spending now to try to pull people back from the brink of sickness, that they needn't be suffering under with a better health care system.

I think Virginia stands to benefit, much as do other American states, from finally passing meaningful health care reform.

GREGORY: Chairman Steele, do you think it will help Republicans in the fall to campaign against Obama's health care reform?

STEELE: Absolutely. Because it's a boondoggle. I mean, it's loaded with taxes, it's loaded with government intrusion and regulation. It's loaded with, you know, debt that is going to be passed on to future generations. Like Governor Schwarzenegger, Governor Kaine is passing on a $4 billion deficit to his successor. Where do you think that deficit comes from? It comes from the weight that is put on states by unfunded mandates from the federal government. If you bought into this health care plan in the first place where you signed on and took some of the early money, there were strings attached to that. You have states that are now going to be burdened in the future to fund programs that the federal government said we'll do today, but you carry the weight tomorrow.

This is the reality that a lot of governors around the country are facing, and you're going to layer on top of that a health care boondoggle, an experiment that no one can tell you what it's actually going to cost...

KAINE: David...

STEELE: We're now hearing that, oh, it's going to be a little more than we thought it was going to be. People realize what's going on here.

KAINE: Let me focus on it here, and I think you've asked an excellent question. Will the campaigns of 2010 be heavily focused on health care? You'll have the Republican Party campaigning to repeal this historic health bill that will pass. You'll have me and my team out promoting it.

I want to have that campaign. I want to face a Republican Party chair and leadership that says, no, we need to go back and let insurance companies kick people off who are sick. I want them to go explain why 47 million Americans are uninsured and why the costs will continue to escalate to break the bank of middle-income families and businesses. Let them defend that status quo.


GREGORY: Gentlemen, let me leave health care there for a minute. I have a couple of minutes left, a couple of issues I want to address.

Chairman Steele, you have a new book out, the 12 steps to take on the Obama agenda and defeat the Obama agenda. And you talked about making it very clear that there will be penalties for certain conservatives who don't espouse conservative values. But your leadership has come under some question this week, whether it's statements that you made like earlier in the week, saying you wouldn't take back control of Congress. You picked a fight with Rush Limbaugh earlier in the year. You said abortion was a choice. People have questioned you taking money for speeches and even taking money for writing the book. And you said this week, "if you don't want me in the job, fire me, but until then, shut up" to your Republican critics.

Are you an effective leader of the Republican Party? STEELE: I am. I think I am a passionate leader of this party. I'm a grassroots guy. I grew up here in the streets of D.C. At 17, decided to become a Republican. And I've been fighting that fight ever since.

I believe passionately in those principles that drew me to this party, and I get angry sometimes when we walk away from those principles. I get angry and frustrated when I see those principles not being regarded because they have been the foundation for generations.

And the reality of it is, as chairman, I raised $80 million this year. I won two gubernatorial races that no one thought I could win, one in his backyard. I've got 370,000 new donors to the party, I've got $8 million cash on hand when the budget I inherited said I would have zero, I would have debt. I have no debt. They have debt.

I have the same amount of money cash on hand as my partner here, who had the White House, both houses of Congress, $8 million going into this year. So I think overall, I'm doing OK.

GREGORY: Final question, Chairman Steele, is the Republican Party guilty of politicizing terrorism right now?

STEELE: Oh, absolutely not. Oh, my goodness, no.

KAINE: No, David, they are.

STEELE: No, absolutely not.

KAINE: That's all they are doing on these terrorism issues is trying to politicize them...


GREGORY: Let Chairman Steele -- hold on, Governor. Governor, let Chairman Steele answer the question and then you respond.

STEELE: Absolutely not. Dick Cheney has it dead right. This administration has not put out a clear vision of how they are going to handle national security. And what -- we're going to stop -- close Gitmo. Not done. We're surprised and amazed that the dots weren't connected on what happened on December 25th. The American people don't trust the direction this is going. If you can't call a thing what it is, and that is terrorism, people wonder if you know what to do with it. And that's where we are right now.


GREGORY: Governor Kaine, 30 seconds.

KAINE: The president's approach to terrorism has been praised by many of the Bush administration leaders across the board from the day he's come into office. When the incident happened on the air flight into Detroit, it was only a matter of days before Republican leaders were trying to use it in fundraising letters, making all kinds of outrageous claims, such as the president never uses the word "terror." As you know, that's ridiculous. He uses it all the time in speeches. They have been claiming that the way that this recent suspect is being treated is contrary to what should happen for our national security. The case is being treated exactly the same way the Bush administration treated the Richard Reid case, and so this is an instance where the president is doing the right thing, the Republicans are just looking for an excuse to raise money and politicize it. This president is going to unify Americans and keep us safe rather than play political games.

GREGORY: We're going to leave it there. The debate will continue in this hot political year. Both of you, thank you very much, Chairman Steel and Chairman Kaine.

KAINE: Thank you, David.

GREGORY: We'll come back after this and have more with Chairman Steele. I should point out in our "Meet the Press" take 2 web extra, it's up this afternoon. You can also read excerpts of "Right Now: a 12-Step Program for Defeating the Obama Agenda." Plus, updates from me throughout the week. It's all on our website,

And up next, yesterday I sat down here in California for an exclusive interview with Governor Arnold Schwarzenegger . We'll talk about how he plans to tackle California's massive budget deficit. Plus, our political roundtable, with NBC's Andrea Mitchell and Chuck Todd. Only here on "Meet the Press."


GREGORY: And we're back with our special broadcast from California. Governor Schwarzenegger, good morning.


GREGORY: It's always nice to come home to California. Thank you for having us.


GREGORY: This has been a big week for you with your State of the State message and a new budget. And 2010 begins in a challenging place for a lot of states, including California, in this economy. Do you feel like the worst is over?

SCHWARZENEGGER: I think that, economically, the worst is over. We see a little comeback when it comes to job creation. We see also that, you know, homes are being sold again and that home sales are up. And I think that, very soon, we will see construction again and new homes and so on.

But when it comes to the financial crisis that California is in, I think we are not out of the woods yet. As I said in my State of the State and in my budget speech, you know, we still have a -- a tough road ahead of us. And this year is one of those tough years.

GREGORY: And for the country as well, when you think not just about California but the country, and economic recovery, what do you think is the biggest threat to that recovery? Is it unemployment?

SCHWARZENEGGER: I think that we have to get the economy back. I think that we have to have money available, loans available so businesses can expand again and people can buy homes. I think that we just have to get jobs back as quickly as possible.

That's why we have tax incentives for people that want to buy new or used homes. And we just want to do everything that we can as a state and as a country to stimulate the economy.

That's the key thing because I think that the worst is when people lose their jobs and they have to go home to their family and say, you know, I have no more money; we cannot provide for the family, and so on, or when both of the parents lose their jobs, it gets even tougher. And that's the case in a lot of the families. So we have to do everything that we can. That's government's responsibility, to stimulate the economy and to help.

GREGORY: The federal government is spending a lot of money in stimulus, preparing to do so on health care reform if that gets passed. And there's a lot of talk about taxes, whether taxes will be necessary on the national level or even when you're facing a $20 billion shortfall.

David Ignatius wrote something -- a columnist for The Washington Post -- that caught my attention. And he wrote, "What worries me, looking ahead, thinking about the whole, country is what might be called the California-ization of America, the growing tendency of our political system to make promises in social spending programs that it isn't prepared to pay for with tax increases."

Think about California. How can you stick to a position, as you do, that tax increases are not the way to go?

SCHWARZENEGGER: Well, first of all, we have no option because, if you do the tax increases, you immediately, kind of, stifle the economy. So, right now, where we try to get -- where we see the economy has bottomed out and it has a chance now to come back, to go and now to hit the state with more taxes will be the wrong thing to do.

So what you want to do is you want to do the opposite; you want to go and put money into the economy and you want to go and give tax incentives for businesses, for new hires, as we did, or retraining people or for home buyers' tax credits and so on.

So I think that it would be a big mistake. I think the thing that politicians should not do is promise things they can't keep and that they have no funding mechanism to go and follow through with those promises, like, for instance, in California with the pensions, the public employees pension, I mean, it's a disaster because, in the late ‘90s, they were promised things that there's no way the state can keep those promises.

And that's why I said that we have got to get Democrats and Republicans together and fix this problem because, right now, we are paying already more than $3 billion toward the pensions. And eventually, that amount is going to go up to $10 billion. That's money that's being taken away from very important programs, universities, schools, health care, and all of those kind of other things.

GREGORY: When you think about the federal government's budget, which doesn't have to be brought into alignment the way a state budget like California is, do you think taxes have to go up to pay for stimulus, to pay for health care?

SCHWARZENEGGER: I think that the government has to live within its means. And, of course, the big advantage that the federal government has is they can run up those deficits and they can print more money, whereas the state can't.

And I tried to tell the people in California, when you have $85 billion in revenues available, that's all you can spend. That's the end of that -- even though they may want to spend $104 or $105 billion. And so you have to make the necessary cuts because we've got to live within our means. We cannot print more money in this state. We cannot go and run up those deficits as the federal government does.

GREGORY: You called some of the cuts that you put forward in your budget "draconian cuts," by your own admission. One of the things you said so strongly is the federal government has got to come to California's aid. What do you need?

SCHWARZENEGGER: Well, it's not so much coming to our aid. The federal government owes us billions of dollars. You see, there is a difference. I mean, in California one's got 94 cents to the dollar that we're putting in on federal taxes. Now we only get 78 cents. But you have places like, for instance, Alaska that gets $1.86. You have New Mexico that gets $2.03. So we are subsidizing those states. And that is the thing that is unfair.

So what we are saying to the federal government, look, you are responsible for border security; you are responsible for immigration and for all of those kind of things that -- you know, if you fix those problems; if you help us, you know, with the incarceration of undocumented immigrants which costs us almost $1 billion, then we can talk.

But, right now, you're not willing to pay any of those things. So it is unfair that we are paying in $1 and getting back 78 cents on the dollar. And so we try to fix that. And it's not a bailout, at all. It's just being fair. And it's federal fairness, not federal bailout.

GREGORY: What about the stimulus. Has it helped California?

SCHWARZENEGGER: I think the stimulus was very helpful to California. And I think that -- I was a big supporter of the stimulus package. I think they have given us money, if it has to do with transportation or with high technology and with all kinds of different things, with our universities and so on, so we were very appreciative.

But it's one-time money. One should always know the difference between one-time money and ongoing money. One-time money, that's here today, gone tomorrow. Ongoing money -- I mean, I talk about, you know, increasing the level from 78 cents to 90 cents -- that's an ongoing thing -- or when we talk about health care, that you have health care where we are owed billions of dollars in health care. That's ongoing, so we want to make those adjustments with the federal government and work with them so that it's more fair.

GREGORY: What happens if California doesn't get the money that you feel it deserves from the federal government? What then?

SCHWARZENEGGER: Well, first of all, I never really think so much about the option B because it's a loser's attitude. I think you always have to just think about -- even though it has been difficult up until now to get that money; we've been fighting for it for six years, but we never give up. It is just like with the redistricting reform. Journalists always ask me -- they say, "Well wait a minute; they just lost now five times; why are you back the sixth time with redistricting reform? Don't you get it? The people vote no."

And I said, no, I never give up. I come from the sports background. Just because you didn't lift the weight one time, did you give up and never try again? No. There's no such thing.

So we're going to be back. And redistricting reform, the sixth time, we won. And the same is with this. We will never give up. We continue pushing. This time we're going to go back with the four legislative leaders of California, Democrats and Republicans alike, and keep pushing and talking to the federal government, letting them know that it is unfair the way the money's being distributed right now.

And so we also will inspire and push extra hard the California congressional delegation, the bipartisan delegation. Because they're not being -- representing us really well in this case. I mean, you know, if you think about that the Senate just voted for a health care bill that is saying, basically, that California should pay for Nebraska, so that Nebraska never has to pay any extra money, and we...

GREGORY: To expand the Medicaid rolls?

SCHWARZENEGGER: To expand the Medicaid rolls -- and then we have to pay $3, $4 billion extra for those states.

GREGORY: You said the president should rethink health care reform.

SCHWARZENEGGER: Absolutely. Because that's not health care reform, to go and to put that extra burden, billions of dollars on other states, especially on California.

Just because we're the best state in the world and the best place in the world and we have the most diversified economy and everyone wants to come to California is no reason to beat up on California and to always ask for more money from California. I think it's time for the federal government to go and take care of us.

GREGORY: Is that how you think about health care reform, as something that ultimately would beat up on California?

SCHWARZENEGGER: Well, yes, it is. Right now, I just cannot imagine why we would have, like I said, you know, for instance, our senators and congressional people, how they would vote for something like that where they are representing Nebraska and not us.

And by the way, as I said in my State of the State, that's the biggest rip-off. I mean, that is against the law to buy a vote.

GREGORY: You're talking about Senator Nelson.

SCHWARZENEGGER: Senator Nelson, that's like buying a vote to say...

GREGORY: The federal government will pay for their medications...

SCHWARZENEGGER: "I'm holding out my vote unless I get some extra kind of benefits here." I mean if you do that in Sacramento, you know, you'll be sued. It is illegal to do that, to buy votes.

GREGORY: Can I ask you a couple of more California...


GREGORY: ... issues.

One of the things you've talked about that got a lot of attention is your pledge to move money out of the state budget from prisons into higher education. I don't have to tell you that the University of California system has raised fees for students.

What is the future of education in California?

SCHWARZENEGGER: I think the future of education in California is great, I think we still have the best university system in the world. The key thing is that we reform education from kindergarten through 14, especially kindergarten through 12. Because it is inexcusable what he had up until now and we were fighting to change that for years now and finally we were able to change it.

Just the other day I signed legislation to reform education. It's inexcusable that children get stuck in low performing schools and you cannot get them out, without the school principal's permission. Of course the school principal will never give you the permission because it will be -- he will be losing money if he lets a kid go out. So they are stranded, they are strapped.

As I said, it was like a chain on the exit doors. And now we finally changed that. Or for instance that parents cannot be involved in the schools, cannot be involved in which direction of school or education should go. Now that they have that reform, they have a chance to turn low-performing schools or failing schools into charter schools or close the school down or move the kids out of the school or fire the school principal or teachers and so on and so forth. So those are the kind of things, those are the kind of reforms we need to do and I'm glad that finally both parties got together and created those reforms that they have been fighting for, for years.

And here is a good example of a good relationship with the federal government because the Obama administration was very instrumental -- Arne Duncan , the Education Secretary -- to push the states to say here is $4.3 billion for you guys, you can apply and compete for this money.

And we can get $700 million so that kind of put it over the top so there was the federal government very helpful in this.

GREGORY: Let me ask you a little bit about President Obama. Do you think he's doing a good enough job keeping America safe?

SCHWARZENEGGER: I think that he's doing everything that he can. I think that, you know, Democrats, a lot of times get the rap. They are not strong on security and all of those kind of things. I think that he has talked about the issues. I think that he has been fighting for the issues.

This was an unfortunate situation of what happened over Christmas. And I think it is the total failure in the communication within the departments, that when you look back all of the instances that are happening it's always going to say well, we had everything in place but we didn't pass on, the dots were not connected or something like that.

It's not like the president has done something wrong all because he was in Hawaii or anything. It's nothing to do with that at all. What it has to do with is just simply they didn't connect the dots and within the agencies, and within the airport authorities and homeland security and the CIA and everyone else, they just don't connect the dots.

And we have this problem before we started creating Homeland Security also here in California. Where in California, the law enforcement did not really communicate well with the FBI, they didn't want to give certain information. And the FBI didn't want to give information to law enforcement. All this territorial fighting going on.

And I think that that has to -- we have to get rid of that problem and connect the dots. Other than that I will say to you, we have very smart people in the leadership. It's just working together is always the hardest thing to do.

GREGORY: Working together as you come to the last year of your tenure as governor. Where do you fit in the Republican Party of today?

SCHWARZENEGGER: I'm a reformer. I'm an independent reformer. I came into this job here saying that I want to be the people's governor, not the Republican Party's governor but the people's governor. I want to represent Democrats and Republicans; I want to do everything that I can to bring Democrats and Republicans together. That's why I've been talking so much about post partisanship, bipartisanship or nonpartisanship.

I think it's extremely important the action is to bring both of the parties together and to look at what they can do together rather than to just talk about what they want to fight over.

Let's do it together. Let's go in the beginning of the year and say here are the things that need to be done and then get them to work together on those things.

We in California even though California is known as a state that is not governable, it is very hard to govern California, probably the toughest state to govern in the United States. But still we got a lot of things done. I mean, I'm very proud when you look, I always run around with this list, David.

And I put this down: workers compensation reform, done, budget reform, not done. We still have to fight for that. And the rebuilding our levee, the rebuilding our roads, the rebuilding our schools, more affordable housing, rebuilding our prisons, more infrastructures, those things were done.

But then tax reform was not done. You know, campaign finance reform was not done. The primaries was not done. So I think that we have a lot of things we could have done even though Democrats and Republicans fight. But I think it is much easier when people take party out of the way. And I know it's hard to do but you got to be a servant to the people, not to your party.

GREGORY: Do you think the Republican Party is doing that of today nationally?

SCHWARZENEGGER: I think both of the parties are not doing that because it is so political, it's more they are thinking more about the party than about the people. And I think that as soon as both parties come together and have regular meetings and say what can we accomplish together rather than just worrying about how do we get elected and how do we get more people elected for the Republican Party and how to get more elected for the Democratic Party, all of this, I know it's part of politics, to do that.

But I think that we should tone that down and lift up of what is important really and aim for the people. Look, this country need to rebuild itself. We are still living off the Eisenhower era and off the Roosevelt era when they built the thousands of bridges and the thousands of government buildings and the roads, the highway system and all of those things.

What's the new thing that we are building? We haven't built anything in decades. We need high speed rail, we need new infrastructure. We need to think about it because we have countries like China and Europe that are very fast gaining on us and surpassing us. So we got to get our act together and really make this country kind of live in the 21st century, not deal with the infrastructure of the 20th century. GREGORY: As you look at the political landscape nationally, given your views about the party. Do you think the Republican Party is poised for some big gains in this election year?

SCHWARZENEGGER: Without any doubt but not because some miracle was happening that they did. Or that the Democrats didn't do. That's by nature you always see that. That you know, there is a huge momentum two years ago, there was a huge momentum for the Democratic Party because the Republicans were in charge for so and so many years and they have done a good job, the Republicans but it was the momentum was swinging the other way and so the Democrats got all of the votes.

So now I think the pendulum is coming back and it's going the other way and I think that the Republicans are really going to benefit this year from that. And you know, they will have another chance to come up with some good ideas and how to go in the right direction for the country.

GREGORY: Final question. What's ahead for Arnold Schwarzenegger ? Is it politics or is it Hollywood?

SCHWARZENEGGER: I don't even think about my next move at all. I'm thinking about this year, because there's so much -- so much opportunity this year in tax reform, in budget reform and to really move the state forward in the various different areas that we need to move the state forward and bring in both of the parties together and to get our infrastructure, the water infrastructure passed -- pay no attention; that's just a little earthquake.

GREGORY: When you speak, things happen.

SCHWARZENEGGER: See, see in California when there is a noise...


SCHWARZENEGGER: The governor never shakes, worries about it, because earthquakes happen all the time.

GREGORY: I'm an L.A. guy.


SCHWARZENEGGER: You know what -- exactly. But anyway, so that's the bottom line. I'm not thinking about myself, I'm thinking about the state. That's the key thing. And then when I'm finished then I can always think about myself.

GREGORY: All right. Will you run for political Office again?

SCHWARZENEGGER: Well, you never say never but I mean, you know, right now I have no plans, period.

GREGORY: Governor Schwarzenegger, thank you very much.


GREGORY: I appreciate it.


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