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Arnold Schwarzenegger Set to Hold Press Conference

Aired August 20, 2003 - 15:01   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


JOHN KING, CNN ANCHOR: This hour, perhaps even momentarily, we expect to see Arnold Schwarzenegger without a script, without a movie script, anyway, an early test of his ability and willingness to answer questions about the issues in the California recall campaign. We'll carry that news conference for you here live.
Also this hour, the California recall plot may thicken. We're waiting for a federal court ruling on a lawsuit by the American Civil Liberties Union requesting a delay of that vote now scheduled for October 7.

Right now, let's go to Los Angeles, where Schwarzenegger has been holding an economic summit. For a time today, our Charles Feldman was in the room.

Charles, any details as yet as to what this candidate would do if elected governor?

CHARLES FELDMAN, CNN CORRESPONDENT: John, no details.

But as you pointed out, he's behind closed doors right now with his so-called economic recovery council. We're told, in about 20 minutes time, he will face the press, along with George Shultz and Warren Buffett. Before he began this council, he did make some remarks to the press, zeroing, as always, in California's economic plight.

(BEGIN VIDEO CLIP)

ARNOLD SCHWARZENEGGER (R), CALIFORNIA GUBERNATORIAL CANDIDATE: Of all the people that have lost their jobs in the United States, half of them were lost right here in California. We're talking about nearly 22,000 people have not only lost their jobs here in California, but they are also experiencing firsthand the American dream slipping away from them. And that is unacceptable.

(END VIDEO CLIP)

FELDMAN: Now, this is very much being cast like a big major movie. And so, with that in mind, Mr. Schwarzenegger did allow his co-stars to speak, his co-stars, of course, being George Shultz and Warren Buffett.

(BEGIN VIDEO CLIP)

WARREN BUFFETT, ADVISER TO SCHWARZENEGGER: Right now, California has problems. They're far from insurmountable. It's the richest state in the country. They haven't solved them in recent years. They need to solve them. And they need to solve them soon.

CHARLES SHULTZ, ADVISER TO SCHWARZENEGGER: I'm worried about our state. The political process somehow has driven it into a ditch. And the first thing we need to do is straighten out the governmental process, get our governmental house in order, stop the hemorrhaging, get us back to health. And so, when I heard that you were going to put yourself forward as governor as California, I really welcomed that. And you're a new and constructive force on the scene.

(END VIDEO CLIP)

FELDMAN: Now, I should point out that Schwarzenegger keeps saying he wants to be inclusive and the governor of all the people of California. Well, there are about 20 people as part of this so-called economic recovery council, John, but only two, I believe, Latinos, no blacks and no Asians, blacks and Asians, of course, in particular Asians, making up a large minority group in the state of California -- John.

KING: Charles, you say no details as yet. Are we expecting, when Mr. Schwarzenegger comes to that podium behind you, is he prepared to answer questions? Cruz Bustamante, the lieutenant governor, says he would raise taxes. Bill Simon, one of the other Republicans, says he would not. Will Arnold Schwarzenegger answer that question?

FELDMAN: Well, all of us in the press, of course, hope to ask him and hope that he will answer those questions. But some of his aides have said, hey, look, he is just now meeting with his economic recovery council and you got to give the guy a chance to digest all this material.

But, after all, John, it has been two weeks now since he has announced. So I think it is not unreasonable to expect him to address some specifics now.

KING: Charles Feldman, live in Los Angeles, we will back to you when the news conference begins. Remember, we will carry that news conference here on CNN live.

And as you can see from the swarm of reporters around Charles Feldman, competing with Schwarzenegger for media coverage and camera face time is no easy task.

The former baseball commissioner Peter Ueberroth is giving it his best shot. The Republican kicked off his campaign for governor a short while ago, going before reporters to detail parts of his economic recovery plan, its centerpiece, a one-time tax amnesty, which Ueberroth says would raise up to $6 billion.

And the man whose job is on the line in the recall has a campaign doubleheader ahead. In his "I'm still governor" mode, Gray Davis will announce $20 million in grants to protect California coast and wildlife with a key California Democrat, Senator Barbara Boxer, standing by his side. Then Governor Davis will hold the first of his town-hall style conversations with Californians. It's the follow-up to his big speech on the recall effort last night.

CNN's Bob Franken is on recall watch for us in Los Angeles, among other things, tracing reaction to that big speech last night.

Bob, on the day after, what are they saying about Davis' appeal?

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Well, you made an assumption that there was a reaction.

Mainly, the reaction has come from other candidates. And, as you might expect, it has been somewhat derisive. But Gray Davis is no stranger to being an underdog. And he can be a ferocious fighter, belying his calm demeanor. Of course, what he is doing is taking a page out of the book of somebody who has considerable experience with recall efforts. And, of course, I'm talking about former President Clinton, with whom he's been in frequent contact.

The president, of course, made a successful effort in his efforts to resist impeachment -- or resist being removed from office -- by looking presidential, saying that he was doing the people's business, and presenting this as a plot by the Republicans to undo an election. And we're seeing some real familiar looks at that now. It's being repeated with Gray Davis. There is some talk that when President Clinton comes out here in mid-September, he might do some campaigning with Gray Davis, although we have been talking to the people in Clinton's office. And they say, thus far, no campaign events have been set up -- John.

KING: And, Bob, we have all this discussion about Governor Davis, about the other candidates, with the assumption that, 49 days from now, on October 7, the people of California will vote on this recall. We could learn in the next few minutes whether that indeed will happen, correct?

FRANKEN: We could, but it is going to surprise a lot of lawyers if in fact the judge, the federal judge, here does rule that the election should be delayed. His questioning the other day during the hearing expressed quite a bit of skepticism about the American Civil Liberties Union efforts to get a delay because of the use of punch card ballots here in the six most populous counties in California, including L.A. County. We should find that ruling out in the next short while.

KING: Bob Franken live for us in Los Angeles, we'll get back to you if that ruling comes out for us, again, a federal court to rule today perhaps on whether the election will go forward on October 7.

Now, Gray Davis and Arnold Schwarzenegger, on this day, at least, have much in common. Their campaign performances, their latest campaign performance, are being scrutinized by the citizens of California and, of course, by the political pundits.

Let's bring in CNN political analyst Ron Brownstein of "The Los Angeles Times."

Ron, let's start with Arnold Schwarzenegger and the challenge he faces today. Must he put out some details: Will he raise taxes? What else will he do for the California economic crisis? Does that have to come today?

RON BROWNSTEIN, CNN POLITICAL ANALYST: Yes, I think he has to begin doing that today. He probably will not give us very much of it.

I have always felt from the beginning that he is going to give us as much detail as he has to and not really a moment before he has to. But, John, if you look at what is going on for him since his announcement, a little bit of an unfortunate storyline for him has begun to develop. A lot of the commentary has been that he is not specific. You are seeing it even with voters.

We had a terrific piece in the "L.A. Times" today out in Kern County in the Central Valley, a Republican stronghold, where voters are essentially saying, look, I don't know what he stands for. I don't know who he is or really whether he is even a real Republican. So he does have to begin addressing more of the issues.

The problem for him is, I think that -- and you can see this in his first ad. Schwarzenegger is trying to have as broad of an appeal as possible. He's framing this almost in a nonpartisan way in that ad, more as the people against the politicians. To take specific choices here, to identify with specific issues is inevitably to narrow his appeal. And that's the tightrope he is going to have to walk.

KING: Let's move on to Governor Gray Davis.

He gives this speech last night, a statewide address, essentially saying: Yes, I made some mistakes, but this is all a Republican plot to steal an election. They couldn't beat me last November.

Your sense of the morning-after reaction in California, most principally among the Democrats, who will have to decide, will they give him money, will they give him bodies on the ground to fight the recall. Did Davis meet the challenge?

BROWNSTEIN: John, it's fascinating.

It's the mirror image of the Schwarzenegger strategy. Schwarzenegger wants this to be as nonpartisan as possible. Davis yesterday signaled he wants this to be as partisan as possible. California is an increasingly Democrat-leaning state. The Democrats have carried it by over a million votes in each of the last three presidential elections. Yet, if you look at the early polling, only about half of Democrats are saying they would vote to keep Davis in office, would vote against the recall.

So what does he have to do? The first thing he has to do is shore up his base. And, clearly, the best way for him to do that is not to appeal to personal loyalty, of which there hasn't been much through his career. He is not that kind of politician who inspires the kind of intense personal loyalty that Clinton did during impeachment.

What he is doing is appealing to partisan loyalty, basically saying to Democrats: Look, this is part of a pattern of behavior. And even if the recall of Davis doesn't get Democratic blood boiling in California, certainly, the impeachment of Clinton and the events of Florida in 2000 do. So he's trying to tie it in, in that way and to excite the passion in that way, rather than relying on his own personal ties to those voters.

KING: Is it your sense, quickly, that there is a clock ticking among the Democrats, the labor unions, that would have to come up with the money, other groups that would have to come up with the money and the foot soldiers, that, if they do not see a dramatic change in the poll, at some point, they will just open the door on Gray Davis?

BROWNSTEIN: Well, at the least, they are going to go to the no recall/yes Bustamante strategy. You're seeing some unions already breaking in that direction. Davis didn't want that. That is the lieutenant governor. I think you are going to see more of that, because they are nervous about possibly losing the governor's mansion along with Davis, if he does go down.

KING: Ron Brownstein of "The Los Angeles Times," our political analyst, thank you. And more from you in the days ahead, I'm sure.

And for you, please stay with us. We're still waiting for Arnold Schwarzenegger's news conference in California. And when it begins, we'll bring it to you live.

(COMMERCIAL BREAK)

KING: Several significant developments in the California recall campaign just moments away. We're now told by a federal court in California, about 25 minutes from now, 3:40 p.m. Eastern here, 12:40 p.m. in California, a federal court will issue a ruling today on a lawsuit asking that the recall election be postponed, from October 7, 49 days from now, until next March, again, that ruling 25 minutes away. CNN will bring it to you as soon as possible.

We're also awaiting a news conference from Arnold Schwarzenegger, the main Republican candidate so far, in terms of media coverage, anyway, running in the recall election. He met earlier today with top economic advisers.

Standing by for us now live is one of his supporters in California, Republican Congressman David Dreier.

Sir, thank you for joining us.

(CROSSTALK)

KING: As we await to hear directly from the candidate, is he prepared to tell us yes or no on the -- let's start with the threshold issue of taxes. In dealing with the California budget crisis, will Arnold Schwarzenegger be open to tax increases?

REP. DAVID DREIER (R), CALIFORNIA: Absolutely. I will tell you, John, that, right now, the meeting with business leaders is taking place. And, as you know, he's getting a wide range of views. He's made it very clear that the statement that was made earlier by Warren Buffett was really a nonstarter. This idea of increasing property taxes is something that Arnold virulently opposes. He spoke at the 25th anniversary of the passage of Proposition 13. And I know, from having spoken to him -- and this is one of the reasons that I'm supporting him -- is that he has been a strong opponent of tax increases.

And so that will be underscored clearly. And I know that Secretary Shultz, who is co-chairing this economic team, along with Mr. Buffett, has made that case very clearly. And I know that Arnold embraces it.

KING: Just on property taxes or is it a broad no new taxes pledge to the people of California? As you know, Lieutenant Cruz Bustamante would raise taxes. He says tough love is required. And Bill Simon, one of the Republican candidates, says no new taxes, period. Where is he again?

DREIER: Well, John, I will tell you what's necessary.

What's necessary is to put into place a package which will encourage economic growth in this state. We need to do that. We have done it at the federal level. We need to do it here in California. We have seen dramatic tax increases over the past several years, most recently, this tripling of the car tax. Arnold supports rolling back that tripling of the car tax.

We basically saw Bustamante yesterday get into class warfare, saying some should not pay the car tax, others should. I believe that we're all in this together. I'm going to let Arnold speak for himself in just a little while. But the fact is, he is one who is a fiscal conservative. He has made that very clear. And he will be specific about that today.

KING: Your candidate is a newcomer to elective politics. You have been around the track once or twice. What is your advice to him right now, when you see more critical media coverage, more criticism from the other candidates, a slip, at least a little bit, in the poll? What are you telling Arnold Schwarzenegger right now?

DREIER: Well, it was two weeks ago tonight, John, that he called me after he was on "The Tonight Show" and asked me to help him. And I have said yes. And I'm working in a wide range of areas. And I'm going to reserve the advice and counsel that I give him for you, with all due respect to the CNN audience.

KING: Well, we take offense at that, sir.

(LAUGHTER)

KING: I want to ask you a little bit about Governor Gray Davis last night. He obviously is trying to save his job and save his political career. And he did concede to the people of California that perhaps he's made some mistakes. But he also clearly tried to rally the Democratic base by saying he is the victim of what he calls this national Republican plot to try to steal elections that they cannot win. Your thoughts specifically on what he said about the Republican Party and whether you think that strategy has any chance.

DREIER: Well, I admire Gray Davis for working very hard now.

He is extraordinary capable at running campaign and raising campaign resources. That's what he's done so well. That's the reason that he has been able to win elections. But the fact is, this is not a right-wing conspiracy. He was trying to, as you said correctly, John, launch this at the Republicans. All he needs to do is look at Cruz Bustamante and the kinds of vitriolic, vicious things that Bustamante has launched towards him.

Democrats, Republicans and independents in this state are angry. They want a change. They're looking for strong, bold, dynamic leadership. And it's very clear that Arnold Schwarzenegger is the candidate who provides that leadership. And I understand it has got to be frustrating for Gray Davis. But to me, last night's speech appeared to be little more than grasping for straws.

KING: Tell me, as you spend more time with Arnold Schwarzenegger, especially in this meeting today, describe him as a candidate. Describe him as a leader, someone who wants to lead this nation's most populous state. Many say, he has never done this. How can he lead such a giant state?

DREIER: Well, it's not as if he's the first person to be in this position, John. This has been done by Ronald Reagan. It's been done by other people in the past who have run for office.

I have never held any other elective office than the one I've got right now. I think we're ready to get started here John. See you.

(CROSSTALK)

KING: OK, David Dreier wants to walk away to get started here.

(CROSSTALK)

DREIER: I'm still here.

KING: OK. Stay with me one more second. I was going to say, I wish we had you lost Thursday. You managed to bring the lights back on.

I wanted a sense from you about, what will we see, some position today, forums around the state, town hall meetings? How does this candidate convince people he is prepared to govern?

DREIER: You know what? I think things are starting to begin behind me, John.

KING: David Dreier -- I believe we've lost our signal. OK, we'll come back to the news conference, sir. Thank you for joining us.

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Aired August 20, 2003 - 15:01   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN KING, CNN ANCHOR: This hour, perhaps even momentarily, we expect to see Arnold Schwarzenegger without a script, without a movie script, anyway, an early test of his ability and willingness to answer questions about the issues in the California recall campaign. We'll carry that news conference for you here live.
Also this hour, the California recall plot may thicken. We're waiting for a federal court ruling on a lawsuit by the American Civil Liberties Union requesting a delay of that vote now scheduled for October 7.

Right now, let's go to Los Angeles, where Schwarzenegger has been holding an economic summit. For a time today, our Charles Feldman was in the room.

Charles, any details as yet as to what this candidate would do if elected governor?

CHARLES FELDMAN, CNN CORRESPONDENT: John, no details.

But as you pointed out, he's behind closed doors right now with his so-called economic recovery council. We're told, in about 20 minutes time, he will face the press, along with George Shultz and Warren Buffett. Before he began this council, he did make some remarks to the press, zeroing, as always, in California's economic plight.

(BEGIN VIDEO CLIP)

ARNOLD SCHWARZENEGGER (R), CALIFORNIA GUBERNATORIAL CANDIDATE: Of all the people that have lost their jobs in the United States, half of them were lost right here in California. We're talking about nearly 22,000 people have not only lost their jobs here in California, but they are also experiencing firsthand the American dream slipping away from them. And that is unacceptable.

(END VIDEO CLIP)

FELDMAN: Now, this is very much being cast like a big major movie. And so, with that in mind, Mr. Schwarzenegger did allow his co-stars to speak, his co-stars, of course, being George Shultz and Warren Buffett.

(BEGIN VIDEO CLIP)

WARREN BUFFETT, ADVISER TO SCHWARZENEGGER: Right now, California has problems. They're far from insurmountable. It's the richest state in the country. They haven't solved them in recent years. They need to solve them. And they need to solve them soon.

CHARLES SHULTZ, ADVISER TO SCHWARZENEGGER: I'm worried about our state. The political process somehow has driven it into a ditch. And the first thing we need to do is straighten out the governmental process, get our governmental house in order, stop the hemorrhaging, get us back to health. And so, when I heard that you were going to put yourself forward as governor as California, I really welcomed that. And you're a new and constructive force on the scene.

(END VIDEO CLIP)

FELDMAN: Now, I should point out that Schwarzenegger keeps saying he wants to be inclusive and the governor of all the people of California. Well, there are about 20 people as part of this so-called economic recovery council, John, but only two, I believe, Latinos, no blacks and no Asians, blacks and Asians, of course, in particular Asians, making up a large minority group in the state of California -- John.

KING: Charles, you say no details as yet. Are we expecting, when Mr. Schwarzenegger comes to that podium behind you, is he prepared to answer questions? Cruz Bustamante, the lieutenant governor, says he would raise taxes. Bill Simon, one of the other Republicans, says he would not. Will Arnold Schwarzenegger answer that question?

FELDMAN: Well, all of us in the press, of course, hope to ask him and hope that he will answer those questions. But some of his aides have said, hey, look, he is just now meeting with his economic recovery council and you got to give the guy a chance to digest all this material.

But, after all, John, it has been two weeks now since he has announced. So I think it is not unreasonable to expect him to address some specifics now.

KING: Charles Feldman, live in Los Angeles, we will back to you when the news conference begins. Remember, we will carry that news conference here on CNN live.

And as you can see from the swarm of reporters around Charles Feldman, competing with Schwarzenegger for media coverage and camera face time is no easy task.

The former baseball commissioner Peter Ueberroth is giving it his best shot. The Republican kicked off his campaign for governor a short while ago, going before reporters to detail parts of his economic recovery plan, its centerpiece, a one-time tax amnesty, which Ueberroth says would raise up to $6 billion.

And the man whose job is on the line in the recall has a campaign doubleheader ahead. In his "I'm still governor" mode, Gray Davis will announce $20 million in grants to protect California coast and wildlife with a key California Democrat, Senator Barbara Boxer, standing by his side. Then Governor Davis will hold the first of his town-hall style conversations with Californians. It's the follow-up to his big speech on the recall effort last night.

CNN's Bob Franken is on recall watch for us in Los Angeles, among other things, tracing reaction to that big speech last night.

Bob, on the day after, what are they saying about Davis' appeal?

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Well, you made an assumption that there was a reaction.

Mainly, the reaction has come from other candidates. And, as you might expect, it has been somewhat derisive. But Gray Davis is no stranger to being an underdog. And he can be a ferocious fighter, belying his calm demeanor. Of course, what he is doing is taking a page out of the book of somebody who has considerable experience with recall efforts. And, of course, I'm talking about former President Clinton, with whom he's been in frequent contact.

The president, of course, made a successful effort in his efforts to resist impeachment -- or resist being removed from office -- by looking presidential, saying that he was doing the people's business, and presenting this as a plot by the Republicans to undo an election. And we're seeing some real familiar looks at that now. It's being repeated with Gray Davis. There is some talk that when President Clinton comes out here in mid-September, he might do some campaigning with Gray Davis, although we have been talking to the people in Clinton's office. And they say, thus far, no campaign events have been set up -- John.

KING: And, Bob, we have all this discussion about Governor Davis, about the other candidates, with the assumption that, 49 days from now, on October 7, the people of California will vote on this recall. We could learn in the next few minutes whether that indeed will happen, correct?

FRANKEN: We could, but it is going to surprise a lot of lawyers if in fact the judge, the federal judge, here does rule that the election should be delayed. His questioning the other day during the hearing expressed quite a bit of skepticism about the American Civil Liberties Union efforts to get a delay because of the use of punch card ballots here in the six most populous counties in California, including L.A. County. We should find that ruling out in the next short while.

KING: Bob Franken live for us in Los Angeles, we'll get back to you if that ruling comes out for us, again, a federal court to rule today perhaps on whether the election will go forward on October 7.

Now, Gray Davis and Arnold Schwarzenegger, on this day, at least, have much in common. Their campaign performances, their latest campaign performance, are being scrutinized by the citizens of California and, of course, by the political pundits.

Let's bring in CNN political analyst Ron Brownstein of "The Los Angeles Times."

Ron, let's start with Arnold Schwarzenegger and the challenge he faces today. Must he put out some details: Will he raise taxes? What else will he do for the California economic crisis? Does that have to come today?

RON BROWNSTEIN, CNN POLITICAL ANALYST: Yes, I think he has to begin doing that today. He probably will not give us very much of it.

I have always felt from the beginning that he is going to give us as much detail as he has to and not really a moment before he has to. But, John, if you look at what is going on for him since his announcement, a little bit of an unfortunate storyline for him has begun to develop. A lot of the commentary has been that he is not specific. You are seeing it even with voters.

We had a terrific piece in the "L.A. Times" today out in Kern County in the Central Valley, a Republican stronghold, where voters are essentially saying, look, I don't know what he stands for. I don't know who he is or really whether he is even a real Republican. So he does have to begin addressing more of the issues.

The problem for him is, I think that -- and you can see this in his first ad. Schwarzenegger is trying to have as broad of an appeal as possible. He's framing this almost in a nonpartisan way in that ad, more as the people against the politicians. To take specific choices here, to identify with specific issues is inevitably to narrow his appeal. And that's the tightrope he is going to have to walk.

KING: Let's move on to Governor Gray Davis.

He gives this speech last night, a statewide address, essentially saying: Yes, I made some mistakes, but this is all a Republican plot to steal an election. They couldn't beat me last November.

Your sense of the morning-after reaction in California, most principally among the Democrats, who will have to decide, will they give him money, will they give him bodies on the ground to fight the recall. Did Davis meet the challenge?

BROWNSTEIN: John, it's fascinating.

It's the mirror image of the Schwarzenegger strategy. Schwarzenegger wants this to be as nonpartisan as possible. Davis yesterday signaled he wants this to be as partisan as possible. California is an increasingly Democrat-leaning state. The Democrats have carried it by over a million votes in each of the last three presidential elections. Yet, if you look at the early polling, only about half of Democrats are saying they would vote to keep Davis in office, would vote against the recall.

So what does he have to do? The first thing he has to do is shore up his base. And, clearly, the best way for him to do that is not to appeal to personal loyalty, of which there hasn't been much through his career. He is not that kind of politician who inspires the kind of intense personal loyalty that Clinton did during impeachment.

What he is doing is appealing to partisan loyalty, basically saying to Democrats: Look, this is part of a pattern of behavior. And even if the recall of Davis doesn't get Democratic blood boiling in California, certainly, the impeachment of Clinton and the events of Florida in 2000 do. So he's trying to tie it in, in that way and to excite the passion in that way, rather than relying on his own personal ties to those voters.

KING: Is it your sense, quickly, that there is a clock ticking among the Democrats, the labor unions, that would have to come up with the money, other groups that would have to come up with the money and the foot soldiers, that, if they do not see a dramatic change in the poll, at some point, they will just open the door on Gray Davis?

BROWNSTEIN: Well, at the least, they are going to go to the no recall/yes Bustamante strategy. You're seeing some unions already breaking in that direction. Davis didn't want that. That is the lieutenant governor. I think you are going to see more of that, because they are nervous about possibly losing the governor's mansion along with Davis, if he does go down.

KING: Ron Brownstein of "The Los Angeles Times," our political analyst, thank you. And more from you in the days ahead, I'm sure.

And for you, please stay with us. We're still waiting for Arnold Schwarzenegger's news conference in California. And when it begins, we'll bring it to you live.

(COMMERCIAL BREAK)

KING: Several significant developments in the California recall campaign just moments away. We're now told by a federal court in California, about 25 minutes from now, 3:40 p.m. Eastern here, 12:40 p.m. in California, a federal court will issue a ruling today on a lawsuit asking that the recall election be postponed, from October 7, 49 days from now, until next March, again, that ruling 25 minutes away. CNN will bring it to you as soon as possible.

We're also awaiting a news conference from Arnold Schwarzenegger, the main Republican candidate so far, in terms of media coverage, anyway, running in the recall election. He met earlier today with top economic advisers.

Standing by for us now live is one of his supporters in California, Republican Congressman David Dreier.

Sir, thank you for joining us.

(CROSSTALK)

KING: As we await to hear directly from the candidate, is he prepared to tell us yes or no on the -- let's start with the threshold issue of taxes. In dealing with the California budget crisis, will Arnold Schwarzenegger be open to tax increases?

REP. DAVID DREIER (R), CALIFORNIA: Absolutely. I will tell you, John, that, right now, the meeting with business leaders is taking place. And, as you know, he's getting a wide range of views. He's made it very clear that the statement that was made earlier by Warren Buffett was really a nonstarter. This idea of increasing property taxes is something that Arnold virulently opposes. He spoke at the 25th anniversary of the passage of Proposition 13. And I know, from having spoken to him -- and this is one of the reasons that I'm supporting him -- is that he has been a strong opponent of tax increases.

And so that will be underscored clearly. And I know that Secretary Shultz, who is co-chairing this economic team, along with Mr. Buffett, has made that case very clearly. And I know that Arnold embraces it.

KING: Just on property taxes or is it a broad no new taxes pledge to the people of California? As you know, Lieutenant Cruz Bustamante would raise taxes. He says tough love is required. And Bill Simon, one of the Republican candidates, says no new taxes, period. Where is he again?

DREIER: Well, John, I will tell you what's necessary.

What's necessary is to put into place a package which will encourage economic growth in this state. We need to do that. We have done it at the federal level. We need to do it here in California. We have seen dramatic tax increases over the past several years, most recently, this tripling of the car tax. Arnold supports rolling back that tripling of the car tax.

We basically saw Bustamante yesterday get into class warfare, saying some should not pay the car tax, others should. I believe that we're all in this together. I'm going to let Arnold speak for himself in just a little while. But the fact is, he is one who is a fiscal conservative. He has made that very clear. And he will be specific about that today.

KING: Your candidate is a newcomer to elective politics. You have been around the track once or twice. What is your advice to him right now, when you see more critical media coverage, more criticism from the other candidates, a slip, at least a little bit, in the poll? What are you telling Arnold Schwarzenegger right now?

DREIER: Well, it was two weeks ago tonight, John, that he called me after he was on "The Tonight Show" and asked me to help him. And I have said yes. And I'm working in a wide range of areas. And I'm going to reserve the advice and counsel that I give him for you, with all due respect to the CNN audience.

KING: Well, we take offense at that, sir.

(LAUGHTER)

KING: I want to ask you a little bit about Governor Gray Davis last night. He obviously is trying to save his job and save his political career. And he did concede to the people of California that perhaps he's made some mistakes. But he also clearly tried to rally the Democratic base by saying he is the victim of what he calls this national Republican plot to try to steal elections that they cannot win. Your thoughts specifically on what he said about the Republican Party and whether you think that strategy has any chance.

DREIER: Well, I admire Gray Davis for working very hard now.

He is extraordinary capable at running campaign and raising campaign resources. That's what he's done so well. That's the reason that he has been able to win elections. But the fact is, this is not a right-wing conspiracy. He was trying to, as you said correctly, John, launch this at the Republicans. All he needs to do is look at Cruz Bustamante and the kinds of vitriolic, vicious things that Bustamante has launched towards him.

Democrats, Republicans and independents in this state are angry. They want a change. They're looking for strong, bold, dynamic leadership. And it's very clear that Arnold Schwarzenegger is the candidate who provides that leadership. And I understand it has got to be frustrating for Gray Davis. But to me, last night's speech appeared to be little more than grasping for straws.

KING: Tell me, as you spend more time with Arnold Schwarzenegger, especially in this meeting today, describe him as a candidate. Describe him as a leader, someone who wants to lead this nation's most populous state. Many say, he has never done this. How can he lead such a giant state?

DREIER: Well, it's not as if he's the first person to be in this position, John. This has been done by Ronald Reagan. It's been done by other people in the past who have run for office.

I have never held any other elective office than the one I've got right now. I think we're ready to get started here John. See you.

(CROSSTALK)

KING: OK, David Dreier wants to walk away to get started here.

(CROSSTALK)

DREIER: I'm still here.

KING: OK. Stay with me one more second. I was going to say, I wish we had you lost Thursday. You managed to bring the lights back on.

I wanted a sense from you about, what will we see, some position today, forums around the state, town hall meetings? How does this candidate convince people he is prepared to govern?

DREIER: You know what? I think things are starting to begin behind me, John.

KING: David Dreier -- I believe we've lost our signal. OK, we'll come back to the news conference, sir. Thank you for joining us.

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