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Meg Whitman announces her candidacy for governor of California

Thursday, September 24, 2009

HH: The biggest state in the Union is also the most troubled state in the Union. Yesterday, Meg Whitman declared that she would actually like to run that mess. She joins me now. Meg Whitman, welcome back to the Hugh Hewitt Show.

MW: Thank you, nice to talk to you, Hugh.

HH: Well, great to have you back, although I think a lot of people watching your announcement this week may have said are you out of your mind? You’ve been studying this for a while. You really think you can run California?

MW: I think I can make a big difference to the state of California. And you know why ultimately I decided to do this? It’s pretty simple. I refuse to let California fail. I can’t bear to stand by and watch what is happening to this state. And so I think with a different approach, we can make a big difference. And we need to do it soon, because the longer we let this go, the harder it is to turn the state around.

HH: You know, Meg Whitman, I am one of those people with one foot out of the state, and I’m serious about this.

MW: Yeah.

HH: You can do a radio show from anywhere. How do you turn that around? That’s almost a fatal governmental disease.

MW: Well, I am a big believer in focus, Hugh. Let’s do three things at 100% as opposed to 20 things at 50%, because the devil is in the detail, and I also think if you go to Sacramento with too broad an agenda, you will be stymied at every corner. So I want to focus on three things. First is jobs. We have to create more jobs in California, and we have to keep jobs here. And the way we’re going to do that is we’re going to cut taxes, we’re going to streamline regulation, and we’re going to stand up and compete, because as you know, we’re losing jobs not so much to India and China, but to Colorado, Texas, Utah, Nevada. And we have to say we’re not going to lose another job to a neighboring state.

HH: Okay.

MW: The second area of focus is spending, government spending. As you know, we have an addiction to spending. Government spending is out of control, and it makes us not competitive with other states. And then finally, my passion around K-12 education, which we have got to turn around once and for all here. So let’s focus on three things, let’s get those done, and we can turn California around. But we have to stand up and be counted now.

HH: Let’s walk through each of those in turn. Let’s start with the jobs front, and especially cutting taxes. One of your opponents, Steve Poizner, has said on other places he signed the no tax pledge and that you haven’t. Is that true? Haven’t you signed the ATR pledge?

MW: I did sign the ATR pledge. Yup, we faxed it in, and they have it.

HH: All right. So you are on record, no tax hikes under a Meg Whitman governorship?

MW: Correct.

HH: All right, in terms of cutting taxes, which taxes would you suggest be first to put to the legislature to cut?

MW: Well first, we have to cut the business taxes for job-creating business of all sizes. We’ve got to reinstate and reinvigorate the R & D tax credit, we’ve got to make sure we provide tax incentives and credits for companies that hire displaced workers. But across the board, we have to look at business taxes, because as you know, we have the highest business taxes in the country. And then we have to look at personal income taxes, because those are the highest also in the country, and we have put a burden on hard working Californians that is just almost impossible for them to work out from underneath. You know, Californians are tapped out. They have no more money to give to Sacramento, and by the way, to Washington, for that matter.

HH: I’ll come back and talk budget in the next segment, but let’s stay for a second on the regulations you want to cut. Right now, the Central Valley is dying, Meg Whitman, because it can’t get water, because of a federal judge.

MW: Yup.

HH: It is a judge ordered drought. That’s not a regulation. But what would you do about something like that?

MW: Well, I wrote an op-ed in the Sacramento Bee and the Fresno Bee about four months ago calling for the water to be turned on to the Central Valley. We have to pump more water through the Delta, because we have a humanitarian crisis. And I understand the challenges that there are ecological issues facing the Delta, but we have a humanitarian crisis going on. And I called for more water to be pumped. And that has still not happened, and we are still losing jobs and losing acres and acres and acres of agricultural land in the Central Valley. So I would have turned on the pumps.

HH: Governor Schwarzenegger declined to call for what is called the God squad, saying it wouldn’t be effective, it wouldn’t be fast enough. I’m not quite sure what Arnold said specifically. Would you use every tool available to you, including the God squad?

MW: Every tool available. I think if, you know, let’s come back to jobs. If jobs is the number one priority to get California back on a health path, the biggest job loss by sector in the California economy has been agriculture. So if we want to decrease unemployment, then let’s put agricultural workers and the farmers back to work. And the best way to do that is to turn on the water. And I would have used every tool in my disposal to get that water turned back on.

HH: Do you think that’s consistent with sound environmental policy?

MW: You know, I am, as you know, I care deeply about the environment. It’s one of the reasons that we all live in California. But we have to be able to make trade-offs. We have to have a balanced common sense approach here. And when faced with a crisis of water that affects hundreds of thousands of people, affects our food supply not only for California, but frankly for the United States of America, we have to make hard decisions. And this is not an easy decision, but you have to ultimately, I think, come down in a crisis on the side of people.

– – – –

HH: Her website is Meg Whitman, the second part of your tripartite platform, your big three, is spending.

MW: Yup.

HH: What about what we just watched in Sacramento? It seemed like a giant carnival, a ruse, an almost mind-boggling obfuscation on the part of career politicians and bureaucrats.

MW: Yeah, I mean, I think I have now traveled throughout the state from all the way in the North through the Central Valley, obviously to San Diego, back up through Los Angeles. And people are fed up with Sacramento. They’re fed up with the politics, and they’re fed up with the politicians. And they deeply understand, average Californians understand the following fact. We cannot spend more than we take in as the state of California. Families understand it, businesses understand it. And we are going to have to get our arms around spending. You know, the last time I was on your show, we talked about how government spending had gone up 80% in the last ten years.

HH: Right.

MW: …how the government now, since the recession started, the government has hired 10,000 workers. Every state government, every city government, every municipal government, every family, every business has been laying off people, or at least holding the line with a hiring freeze. And yet the state has hired 10,000 individuals. So we just have to stand up and bet counted here, because it is bankrupting the state, and it isn’t letting us invest in the things that really matter.

HH: I saw you yesterday in your announcement, and behind you was a great California hero, Pete Wilson, and so I gather Pete Wilson is supporting you.

MW: Yes.

HH: He was tough as nails on spending. He vetoed left and right. I mean, I had my disagreements with Pete on this and that, but he was tough as nails on spending. Will you use the veto in an even more aggressive way than Arnold has done?

MW: Absolutely. You know, the veto pen, the governor has to work with the legislature, but the legislature also has to work with the governor, because the governor in California has line item veto. And you have to use that veto pen to veto pieces of legislation that have spending attached to them, and aren’t on point to the crisis that’s facing the state. You know, since the beginning of the year, there’s been well over 2,000 pieces of legislation that has been put forward by the legislature. Not much of it is on point to solving the fiscal crisis and the unemployment rate. So the governor has to say you know what? We are going to focus on getting this economy back on track, and I’m going to veto legislation that carries incremental spending with it, and isn’t on point to the number one priority.

HH: All right, let’s talk about the ticking time bomb – public pensions.

MW: Yup.

HH: And Meg Whitman, I know you know this, because we talked about it briefly the last time we talked before you declared your candidacy formally, it’s enormous. It’s going to be the unfunded obligation that swallows California.

MW: Yeah, yeah. Well, I think, Hugh, when you and I talked the last time, it was about a $60 billion dollar unfunded pension liability?

HH: Right.

MW: I think that has grown. What I heard most recently was that has grown to close to $100 billion dollars of unfunded pension liability.

HH: Wow.

MW: so the first thing we have to do is new government employees, which we shouldn’t be hiring any right now, but when they do, they have to come in under a different deal. We have to reduce the size of the state work force. That will make a big difference here. And you heard yesterday I called for a reduction in the size of the state work force by 40,000, which will return us to the levels that we had hired at the state in 2004-2005. So about five years ago, we had 40,000 less employees than we do today. Let’s go back to that era, when by the way, the revenues were about the same as they are today, let’s go back to that, and start from there. And that will also help this unfunded pension liability issue.

HH: Now how do you do it? Arnold tried to go to the ballot with it. I think there are emergency powers that the governor can deploy. Pete was a big fan of the emergency power provision. How do you attack $100 billion dollars in unfunded pensions, and I’m talking about retirees, and God love them, they did great work, but no public employee should be making more than $100,000 dollars a year in a pension. It just doesn’t make any sense.

MW: Yeah. Well, of course, what happened was that, you know, several years ago, you can now retire from the civil service at about 80% of your salary and full health care benefits until the day you die. And it’s not affordable. It isn’t affordable. So we have to look at every lever we have to bring this under control, because you’re right. This will bankrupt the state. And it’s interesting, in the current crisis, people don’t talk about this very much. They talk about current period expenses, but they don’t talk about this gigantic freight train that’s coming down the tracks at California. And we’re going to have to address ourselves to it.

HH: Let me bring up a subject in which I’m going to go all special interest on you. I’ve served on Orange County’s Prop. 10 board for ten years. It’s a local control issue. The people of California voted for it. We get $30 million dollars a year to spend on children zero to five in their health and their education. We’ve done a great job of managing our money down here for ten years. And yet Sacramento wants to take our money. They want to take this money that voters said to give to us, and we’ve managed well, to pay for their staffs and their cars and their special interests. And I don’t think that’s right, Meg Whitman.

MW: Well, you know, what I…here’s where I agree with you. We have not run this government effectively. And we haven’t sunset programs, we haven’t got the spending under control in any way, shape or form. And so when you end up in a crisis, programs like the one you describe, that I know you’re so passionate about, get cut. And if we had run this state efficiently and effectively, then we would have the capacity to invest in programs that we care about the most. But right now, we have no capacity to invest, because we spend more than we take in. So I will come back to, let’s prioritize government spending, let’s run it efficiently, let’s get our money’s worth from every dollar we spend. And you know what I believe? And you and I talked about this, we do not have a revenue problem. We have more money and then some to run this state effectively if we were good stewards of other people’s money, the taxpayers. So I understand your passion about that issue, I respect that passion, but there has to be prioritization, and we’ve got to run this thing efficiently.

HH: All right, we can debate that at length, but I want to get to education. I want to start, however, not with K-12, we’ll come back after the break and give you a chance to talk about that. But I’ve got an intern out here, I call him Neil the Newbie, and he had gotten into Cal Poly Pomona, mechanical engineering, then they sent him a letter and said you can’t come. I find this astonishing that we have not cut staff at the colleges and universities of California, but they’re turning down people they’ve previously admitted, allegedly because of budget shortfalls, Meg Whitman. That’s short-changing our future.

MW: Yeah, well, you know what is a tragedy here is we have let our K-12 education system drop to the bottom of the barrel. What we can’t do is let our higher education system suffer the same fate. Today, our higher education system is the envy of the United States – the community college system, the CSU system, the UC system. It’s the best in the world, and we have to maintain this. And I’m sorry to hear about Neil the Newbie. It’s unfair to him, and he must be terribly disappointed. And we have got to make sure that we fund higher education, but they have to run efficiently, too.

HH: I’ll be right back with Meg Whitman. He’s not that bad off. He gets to work with me for a year.

– – – –

HH: Meg Whitman, K-12 education in California is, you know, the best of times, the worst of times. Some school districts are great in California, some are disasters.

MW: Yeah.

HH: How do you get the good ones to get better, and the bad ones to be completely reformed from top to bottom?

MW: Yeah, well, this has been a long, slow decline, Hugh, as you know, In 1956, we had the number one public school system in America. And today, we’re rated 48th out of 50 states. And so here’s the plan that I think will work, and will catapult us back to number one. It won’t be easy, it will take time, but I would do the following things. I would grade every single public school, A-F – every elementary school, every middle school, every high school, and put the results online, so parents know how good their school is, because you’re right. There are many fine schools in California. But the vast majority are not doing the job. Two, I would eliminate the state cap on charter schools. Charter schools do a better job than regular public schools. They do a better job, but they also give parents choice. And if you are an F school for a certain number of years, you actually should be automatically turned into a charter school. And then third, we have to pay for performance. We have to pay more for the better teachers. And those teachers that aren’t doing the job, we need to help them find another line of work, because all the studies tell you that teachers are the number one determinant of academic performance. And our best teachers are the gems of this system, and we should pay the better ones more.

HH: Okay, Meg Whitman, let’s close by talking politics. You’ve got two able opponents in Steve Poizner and Tom Campbell, there may be others coming. You’ve got one of two very savvy Democrats in Gavin Newsom or Jerry Brown coming. You’re new to politics, though you are not new to activism. You helped Mitt Romney, you helped John McCain. Are you ready for a year-long slugfest, because it’s, you know, round one, the primary, round two, pretty tough, labor unions are going to be coming after you, of course, and Jerry Brown’s been around the block a few times.

MW: Yeah, I am ready for it, Hugh. I was the CEO of a Fortune 500 company for many years. I’m used to the rough and tumble. And this will be a rough and tumble environment. But I’m tough, and I think that I can, I have a message that is going to resonate with all Californians – Republicans, Democrats, independents, which is around jobs and spending and education. And it will be tough, but everything worth doing in life is tough. And I feel very strongly that we have to step up and be counted, and try to turn California around, because if we don’t, our children and our grandchildren will inherit a much diminished state.

HH: Meg Whitman, always a pleasure, look forward to talking to you many times between now and the primary. And if you folks want to debate, I would love to host it with Poizer, Campbell, and whoever else gets into it with Meg Whitman. Thank you for your time.

End of interview.

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