Governors Rendell & Schwarzenegger on "This Week"

Governors Rendell & Schwarzenegger on "This Week"

By This Week - February 21, 2010

MORAN: And good morning, everyone. There will be some high political theater and hard political work in the week ahead in Washington. On Thursday, the main event. President Obama hosts his televised health care summit with Republican and Democratic leaders, hoping to find common ground there. Good luck on that. And Congress returns from recess this week with a full plate, especially as the Senate takes up a jobs bill.

And joining me now to discuss all this, two men who are known to reach across the aisle and are also on the frontlines of dealing with the struggling economy -- California Governor Arnold Schwarzenegger, Pennsylvania Governor Ed Rendell. They are also leading a bipartisan organization, Building America's Future, dedicated to rebuilding the infrastructure in the country. We'll get to that. Gentlemen, welcome.

SCHWARZENEGGER: Thank you, nice to be here.

RENDELL: Nice to be here.

MORAN: Let's start with the economy. The nation's governors, including of course the two of you, are here in Washington, and the chairman of the Governors Association, Jim Douglas of Vermont, said very starkly, looking at the economy, at the impact on states, budgets, employment the rest, he said the worst probably is yet to come. Do you agree with that, Governor Schwarzenegger?

SCHWARZENEGGER: I believe that the worst is over.

MORAN: The worst is over.

SCHWARZENEGGER: I think that the economy, we see signs of a comeback, but it's very clear that the comeback is not going to be as quick as we've seen in the past. It's slow, and we have (ph) seen in our revenues that there's more than a billion dollars a month coming in more than we anticipated. We've seen that the foreclosure rate has slowed down. We've seen that the house sales have picked up. We've seen people are getting back to work, especially in the green sector. So there's signs all over, but the key thing is not to be overly optimistic, just to be optimistic, and to keep pushing and to take the responsibility that we have as a -- at the state level is to do even thought we have a limited amount of power, but to do everything that we can to do -- to create jobs, jobs, jobs. To get the economy back and to create those jobs, because that is the important thing.

We in California have a 12 percent unemployment rate, and the faster we get the people back to work, the better it is. MORAN: What's the view from Harrisburg? The worst is yet to come, or the worst is over?

RENDELL: No, I agree with Governor Schwarzenegger. Our economy has done much better. We're at about a 8.8 percent unemployment, I think the lowest of any big state. We have a very diversified economy that sort of has gotten us through this, although 8.8 percent is terrible, obviously. But we've seen real signs of improvement. In the last three months together, we only lost 4,300 jobs, and we were losing 30,000, 40,000 a month a year ago. So things are getting better. Arnold is right.

Our economists predict growth will actually return next year, 3 percent growth, not great. The following year, they predict 4.5 percent growth, which is almost where we were in the beginning of the last decade, in the middle of the last decade.

But I think what Jim Douglas was referring to is the states are going to really have a problem when the stimulus money drops off. It's going to be a problem. But again, stimulus was never meant to be a permanent solution. It was meant to do two things. One, to be a bridge until growth returns, and it has been a very helpful bridge. No ifs, ands and buts about it. We would have had to lay off 50,000 more people had we not had the federal stimulus funds.

And then secondly, President Obama did something (inaudible). A lot of the programs are long-term programs. The green energy jobs, the broadband, the electrical grid jobs. Those jobs, that benefit from the stimulus is going to stretch out over the next five to 10 years. So states are going to have a management problem of their own budget when the stimulus funds drop off, but the economy -- I agree with the governor's estimate -- is coming back slowly, I think surely.

MORAN: Well, the Senate, as I said, is taking up a jobs bill this week, $15 billion. When it started at the White House, it was $200 billion. The House passed a $180 billion version. There was a deal for $85 billion. We're down to $15 billion now, but do you think there needs to be another stimulus, federal stimulus like this? Is $15 billion enough?

SCHWARZENEGGER: Well, I don't think that we need another stimulus as much as what we need is just to do what we have been talking about over the last two years, and that is rebuild America, because that will create jobs. That is why it is so important to think about the infrastructure, because we happen to be at a stage right now where if we don't rebuild our infrastructure, we're going to fall behind economically and we're not going to be the number one nation anymore. I mean, right now, we are the most powerful nation, but it is because we have this great infrastructure that over the last 100 years, we have built, built and built. But in the last few decades, we have stopped maintaining that infrastructure and we have stopped building and expanding that infrastructure, even though there's tremendous demand for that infrastructure.

So if you build this infrastructure and do what was recommended, $2.2 trillion of infrastructure, that will put a huge amount of people to work and it really will stimulate the economy, and they did that in the 40s and in the 50s, and Eisenhower did it in the 50s. And even into the 60s, the height of infrastructure was in the early 60s, it was the height. Maybe even when I came here to this country, there was this enormous boom of expansion of freeways and bridges and waterways and the universities and all this. And now we're kind of like only spending 2.5 percent of our GDP on infrastructure, rather than the 5 percent that we should be spending.

MORAN: $2.2 trillion -- we had money back in the 1950s and 60s. That is a gigantic amount of money, and when people think about infrastructure, they get it -- roads, bridges -- they understand it. But wasn't there $200 billion or so worth of infrastructure spending in the stimulus a year ago?

RENDELL: Actually, a little less than we recommended to the president when we met with him when he was president-elect. I would have liked to have seen the infrastructure money in the original stimulus at least doubled. And so did Senator Boxer and some other people in the Senate. But still, it was a nice hunk of money, but it just scratches the surface, and the governor is right. What's great about infrastructure spending is one, we need it, for safety, we need it for quality of life and we need it for economic competitiveness.

But two, it's the best jobs creator. Economists (inaudible) $1 billion of infrastructure spending will create 40,000 jobs that can't be outsourced, that are here in America, that are good, family-sustaining jobs. And they're not just jobs on the construction site. We've seen this in our stimulus figures. They're jobs back in the steel factories and the asphalt factories and the concrete factories and the electrical factories and the wooden timber factories. So if you want to preserve American manufacturing and get it to thrive again, and put this country back to work, long-term -- and the key is here, your lead-in saying Washington is broken, and sure it's broken because of the partisanship. But it's also broken because nobody plans. Nobody's willing to do something for 10 years down the road. Everybody thinks about the next election.

We need a plan, a 10-year plan that is going to take us to a first-class infrastructure that will keep us competitive. The port of Shanghai in five years will take more throughput than all American ports put together.

MORAN: Ten-year plans not something that the United States government does very well, but the stimulus, that was a big debate here this week. Both of you were supporters of it. The Republican Party, though, staked out a pretty stark position on the stimulus, summed up by Mitt Romney at the CPAC convention this week when he basically -- this is his take, and really speaking for the Republican Party in general on what the stimulus did.


ROMNEY: He scared employers. The jobs were scarce. His nearly trillion-dollar stimulus created not one net new job in the private sector.


MORAN: Governor Schwarzenegger, that is where the Republicans are, that the stimulus was a failure and that it did not create one net new job in the private sector. True?

SCHWARZENEGGER: Well, you know, to me I find it interesting that you have a lot of the Republicans running around and pushing back on the stimulus money and saying this doesn't create any new jobs, and then they go out and they do the photo ops and they are posing with the big check and they say, isn't this great? Look what the kind of -- the kind of money I provide here for the state, and this is great money to create jobs, and this has created 10,000 new jobs and this has created 20,000 new jobs. And all of these kind of things. It doesn't match up. So it's exactly--


RENDELL: It's hypocrisy in the highest level.

SCHWARZENEGGER: I think, you know--


SCHWARZENEGGER: -- of my Republican colleagues, but I think it's kind of politics, rather than thinking about only one thing, and this is how do we support the president, how do we support him and do everything that we can in order to go and stimulate the economy, get the economy back, and think about the people rather than politics.

I have been the first governor of the Republican governors to come out and to support the stimulus money because I say to myself, this is terrific, and anyone that says that it hasn't created the jobs, they should talk to the 150,000 people that have been getting jobs in California.

MORAN: Private sector?

SCHWARZENEGGER: Yes, for the private sector and also from the public sector. I mean, if it is teachers, if it is university professors, if it is people that are building infrastructure and stuff like that. I mean in every category, there is jobs that have been created in California, 150,000. This is 150,000 people that are going home today with a check that are providing for the family, that can buy the textbooks for their kids, that are feeling wanted and needed and feeling productive. I mean, a better job, it isn't just a job, it's all of those kind of other things. So I'm happy that we got this money. I'm happy that we have put 150,000 people to work and there will be more people that we will put to work.

MORAN: You'd do it again. Did Pennsylvanians think it worked?

RENDELL: Yes, I think basically they do and you know, Mitt Romney is a pretty smart guy. He was very clever there. He said net new jobs. We could fill up every baseball stadium in this country, Terry, with people who got jobs or whose job was saved by the stimulus. There's no ifs, ands or butts about it. Pennsylvania's budget is a little under $28 billion. We get almost $3 billion this year from stimulus. Take that $3 billion away, we've cut most of our program grants to the bone. You'd have to lay off -- I'd have to lay off 37,000 state workers to balance the budget. We have 76,000 state workers.

If we did it with counties, it would be teachers, fireman, police men, emergency workers. So has it saved jobs? You bet it has. Has it created jobs? I'll take Governor Romney out to any construction site in Pennsylvania and then I'll take him -- we'll drive to a construction site, back to the steel plant that provided the steel for the bridge. He knows better.

MORAN: But as Governor Schwarzenegger says, it's politics, but it's politics that gain traction. And I want to ask you, Governor Rendell, big fanfare this week, the Obama administration fanned out across the country, does stimulus work? The president made speeches, sounded a little frustrated that people don't get it, at least the polls show, that they don't understand there were tax cuts and things like that. What do they do while they're playing defense on what was one of major accomplishments? What did the White House, the president do wrong in explaining, presenting itself?

RENDELL: Ironically, the best communicator in the history of political campaigning turned out in his first year in office to not communicate very well. They let the Republicans take the spin right from the beginning. The stimulus got beat up before one dollar was spent. What I would have done, and I've been in charge of the president, is I would have had him Tuesday night -- not Tuesday night was the inaugural ball. Wednesday night I would have had him make a speech to the nation, break down what stimulus because a lot of the stimulus, it wasn't job creation, but was safety net. But not safety net for people on welfare, safety net for hardworking Americans who lost their jobs, extending unemployment benefit. Is there anybody in the Congress -- Republicans aren't going to raise their hands and vote against that, right? Everybody is in favor of that. That was an important component of the stimulus. COBRA, health care benefits, for people who lost their jobs. But we never explained it from the get go and we lost the spin war. The stimulus has done a great job for America, but we lost the spin war. And once you lose it, it's hard to get it back.

MORAN: It's a very aggressive Republican positioning and I want to go back to the CPAC conference. The Republicans reasserted their congressional power. Essentially the massive campaign of obstruction, filibusters more than 100 in one year, 80 percent of major legislation -- and as Mike Pence, congressman from Indiana, one of the Republican conservative leaders in the House put it at CPAC, they're proud of that record.


REP. MIKE PENCE, R-IND.: Sometimes no is just what this town needs to hear. When it comes to more borrowing, the answer is no. When it comes to more spending, the answer is no. When it comes to more bailouts, the answer is no.


MORAN: Governor Schwarzenegger, is the Republican Party, your party, the party of no right now?

SCHWARZENEGGER: Well, you know, they have the big opposite position. I mean, because first when it come to the party itself, they have to do everything they can in order to win in November. So they're going to say no to everything, they're going to say it is not good but Obama is --

MORAN: So they are the party of no.

SCHWARZENEGGER: They're the party of no, and at the same time, I think that there are a lot of people that are disenchanted and dissatisfied and they're angry and this is why you have the Tea Party and all of those things. The Tea Party is not going to go anywhere. I think the Tea Party is all about just an expression of anger and dissatisfaction and I see it in California when people come up to me and says, you know I'm angry that you guys don't get along in Sacramento. I'm angry that they're not getting along in Washington. I'm angry that nothing gets done. I'm angry that I'm unemployed. I'm angry that people are losing homes. I'm angry that businesses are losing their businesses and all of those kind of things. And the economy is down.

But that's only the case in California. That's not only the case in America. That's the case all over the world. If you read six newspapers from different parts of the world, you will see the headlines are pretty much the same. They're all angry at their leaders because the economy is down and the world basically has one-third less wealth right now. And so that makes people angry.

So I think the key thing for the Obama administration is to just keep staying on track. Nothing is going to be easy. And you're going to fail and you're going to do well, and you're going to fail, and you're going to do well.

If you look at the Olympics -- I think all of the lessons in life, you can learn from sports. I mean, this girl Vonn who just had the gold medal in skiing and did a fantastic race in the downhill, the next day she wiped out. That's the way it is, and totally accepted in sports -- totally accepted. People say, oh, that's too bad, isn't it, but the next time, she's going to go do the giant slalom, and then there will be the slalom, and so on.

In politics, when you fail, it's like the end of the world because the press keeps piling on you and beating you up and all of those kind of things.


I am never afraid of failing. I've failed several things that I tried to do in California, but we have won with many things that we have tried in California and we have done in California. Just the redistricting -- it was a perfect example. Five times, we tried redistricting. And we had lost and lost and lost. And people said, don't you get the message that people said no?

And I said, no, I will never get the message. I will always try and try. And the fifth time, we got it, and we won it. The same will be with open primaries, now, in June. We will win open primaries because people want to have politicians not to be so far apart, left and right and be -- cannot get in the middle and get anything done. They want to get together. They want us to work together.

And this is why this partnership is so perfect because Bloomberg is an independent; Rendell is a Democrat; I'm a Republican. So what we are saying is we are for rebuilding America, but it's a political issues; it's a people (inaudible) issue. We want to serve the people of America.

MORAN: And people want to see that, and that kind of bipartisanship, but right now, we have this partisan divide. So let me ask you directly, Governor Rendell, does President Obama, having been outmaneuvered by the party of no, right now, as the governor says, does he need a shake-up?

Does he need some new blood in the White House?

RENDELL: No, I think they just need to take a deep breath, look at what happened and revamp their strategy. They've still got the best communicator I've ever seen in my life in politics.

But, Terry, I want to say something about Representative Pence. He seems to be a very decent person, but what he just said there is the most dangerous prescription for America, no spending, no borrowing.

How in God's name -- I'd love -- I was a former prosecutor; I'd love to cross-examine Representative Pence. How in God's name does he think we're going to repair this nation's infrastructure, stay competitive, give safety to our people, improve our quality of lives?

Every business that's successful in this country has, at some key moment, reinvested in itself, usually by borrowing or taking out capital reserves.

They reinvested. They created another product line, built a new factory. If you don't invest in your future, you will die. And Representative Pence and the people at that convention -- when they say no borrowing, no spending, no investment, they're writing out a prescription form for this country becoming a second-rate power.

And I don't think the governor and I, and there are others out there with us -- we're going to fight that theory. Because we've got to invest in our future. If we don't invest, what's going to happen to American manufacturing?

MORAN: The challenge, of course, is they're looking at an ocean of red ink. One of the other things that happened in Washington -- the president appointed a national commission on the debt. Alan Simpson, one of the co-chairs, did an interview with Judy Woodruff on PBS, in which he tried to get real.


JUDY WOODRUFF, PBS ANCHOR: Some people, mainly Republicans, right now, are arguing what's really needed are tax cuts.

SIMPSON: I'm not smoking that same pipe. I just -- everything is on the table.


MORAN: Everything is on the table. He's not smoking that pipe.

Now would each of you agree that -- you look at this ocean of red ink, a Republican and a Democrat -- get real -- that, to solve the fiscal disaster looming for the country, Republicans here in Washington are going to have to agree the government gets more revenue; Democrats are going to have to agree, long-term entitlements get cut?

RENDELL: No question. And you can cut entitlements in a very intelligent way. I mean, we're working longer; we're living longer. There's no reason why entitlements can't be pushed back, in terms of age. And everyone knows that. It's a dirty little secret, but people have got to get together and say it.

MORAN: That wasn't even hard to get the two of you to agree on that.

SCHWARZENEGGER: Well, we have agreed on that -- we have agreed on that for a long time.


SCHWARZENEGGER: I think there's no two ways about it, that we in this country have a major problem with spending on ongoing programs, and especially on promising people things that we can't keep. The pension in a disaster in California and in the whole nation. We have pension obligations that we cannot fulfill. We have health care obligations, unfunded obligations that we cannot fulfill.

I mean, in California, we're talking about hundreds of billions of dollars, and it's very dangerous. So those are the areas that people are upset about, and those are the kind of things we have to stop.

But one should never get confused between spending money and investing in the future of America. And what we are talking about, with our partnership, is about is investing in the future of California. We have made a commitment in California of $70 billion since I've come into office. And right now, the legislature, after four decades of arguing, have come together, Democrats and Republicans, and have made a commitment to $11 billion in bonds for water infrastructure. Because what has happened this last year in the valley, having 40 percent unemployment because of the lack of water, it was devastating.

So the California people know the difference, and that's why they have approved of those infrastructure packages, including the high-speed rail, the $10 billion. And they will also approve in November the water infrastructure, which is very important so we have water in the future.

So we've got to rebuild our state, and the whole country has to rebuild itself. Because if you think in all of the -- in history, I mean, all the great civilizations all became great because they had great infrastructure. If you think about the Persians, of building the waterways and the paved roads. The Romans, they had the aqueduct system of delivering water and the sewage systems. The Egyptians, they builtÿ2Dÿ2D


RENDELL: How many people (inaudible) Great Wall of Chinaÿ2Dÿ2D


MORAN: ÿ2Dÿ2Drun out of time here, but I have one more question.

SCHWARZENEGGER: But it is -- I just want to say that the decay and the falling of those empires and of the civilizations is directly linked to not keeping up the infrastructure. So we have to be very, very careful in America to keep up our infrastructure, not only to maintain it, but to build, because it is our ports, if it is our freeways, if it is our airports, and all of those things needs to be rebuilt.

MORAN: One more, briefly. The health care summit coming up. Do you expect anything out of this? What should Republicans do? They are coming to the table saying the president has got to take this bill off the table to begin with before they even talk? Just a couple of seconds on this.

SCHWARZENEGGER: Well, first of all, I think that Mrs. Obama is doing something very smart right now. She's gotten into the obesity summit business, and I think that if you do health care, you cannot do health care without prevention. I think the prevention part is the biggest and the most important part of health care reform. And so, for her to talk about obesity, which is a huge problem, because it creates the diabetes and all the health problems in children. We make our children -- they are now 10 pounds heavier today than they were 20 years ago. So all of this I think going in the right direction.

MORAN: Republicans should come to the table to do a deal?

SCHWARZENEGGER: I think that Republicans should be at the table with health care reform and bring their ideas, whatever it may be. I thinkÿ2Dÿ2D


SCHWARZENEGGER: If it is just tort reform -- I mean, just think about tort reform. That could be a huge improvement in the health care reform. And prevention could be a hugeÿ2Dÿ2D

RENDELL: Terry, the Republican Party has a very difficult task ahead. They can't just say no on Thursday. The American people are watching and they are watching clearly. They've got to come up with some ideas, and they've got to say what you said. You take some of our ideas; we'll take some of your ideas. We may not love your ideas, but we'll take them. If they don't do that, I think this whole dynamic of this political year could turn around.

SCHWARZENEGGER: This is what compromise is all about. You've got to have two opposing point of views. You try to bring them together and try to find out where is the sweet spot here? And there's the also the sweet spot. If there is a will, there's a way. If you really want to serve the people and not just your party, I think you will find that sweet spot and you can get it done.

MORAN: All right. Governor Schwarzenegger, Governor Rendell, thanks very much for being here. Good luck on the infrastructure project.

RENDELL: Thank you.

SCHWARZENEGGER: Thank you. Thank you very much.


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