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Interview With Gray Davis Campaign Director

Aired September 04, 2003 - 15:14   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.


JUDY WOODRUFF, CNN ANCHOR: We continue our focus on the California recall with a look at how supporters of Governor Gray Davis view the governor's chances.
With me now from San Francisco is Steve Smith. He is the governor's campaign director.

Steve Smith, first of all, can the governor beat this recall if he's not even going face-to-face with the other candidates in these debate situations like last night?

STEVE SMITH, GRAY DAVIS CAMPAIGN DIRECTOR: Absolutely he can beat the recall.

The reason the debate was set up the way it was last night is, in California, there's two questions on the ballot. There's question one, which is yes or no on the recall. And then there's question two, which lists all the alternative candidates.

We're obviously focused on question one. And the debate last night was set up to reflect the ballot, where the governor stated his case on the recall that will be question one. And then the rest of the candidates debated on question two, which is the replacement candidate.

WOODRUFF: Well, that being the case, however, with all the increased focus on these replacement candidates, doesn't that cut into and undercut the governor's efforts to build up his own case? When you've got more attention on, whether it's Arnold Schwarzenegger or Cruz Bustamante or Arianna Huffington or whoever it is, doesn't that inevitably hurt the governor's efforts to build up his own credibility?

SMITH: That's one of the reasons, frankly, why the governor is traveling all over the state and doing these town hall meetings.

The Walnut Creek half-hour before the debate was a semi-town hall meeting. He's doing another town hall meeting in San Diego tonight. He was in San Francisco last week, Los Angeles. And we're moving all around the state and letting the governor really make his case directly to the voters, what he's gotten done, the fact that the test scores are up, the fact that more kids have health care. There's a lot of good things that have happened in the last few years.

WOODRUFF: We heard last night the lieutenant governor, Democrat Cruz Bustamante, say, if he had been governor during the power crisis, energy crisis last year, that he would have called the power companies' bluff.

Now, clearly, he's setting himself apart from Governor Davis. Do you think the governor is going to be prepared to endorse Cruz Bustamante at the right moment?

SMITH: Well, actually, going back to the energy situation, the governor, frankly, himself, acknowledged that he moved too slowly in that situation.

He kind of smelled a rat, that we were being taken to the cleaners by the out-of-state energy companies. But everyone told him what he should do is just raise rates. He refused to do that. He did call their bluff. But it took him a while to do that, because he was, frankly, afraid of risking the energy grid here in California.

When New York went down a couple weeks ago -- in fact, a lot of the East Coast went down two weeks ago -- California stayed up. And that's because of the efforts that happened on energy. But we were too slow to act. Hindsight is always 20/20.

WOODRUFF: Right. Right. I was trying to get at the disagreement between him and the lieutenant governor.

But let me quickly also ask you about the governor's comment last night that there are times, dealing with the state budget deficit, which is enormous, when there's going to be a need to raise taxes. Does that signal to all the state voters that raising taxes is going to be the primary prescription if this governor is not recalled?

SMITH: No.

Actually, we've gotten through most of the budget crisis. As you know, last year, it was over $30 billion. And the governor did propose increasing taxes on the wealthy and increasing the cigarette tax. The Republicans rejected that and forced us instead to have to increase the car tax, which is something the governor, frankly, didn't want to do. But we're through most of that now. This year's budget is balanced.

We do have a structural deficit that's much smaller than the one we were confronting with last year. And over time, we'll work through that.

WOODRUFF: All right, Steve Smith, we're going to have to leave it at that. He is Governor Gray Davis' campaign director. We appreciate your talking with us today.

SMITH: Thank you.

WOODRUFF: Thank you very much.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com








Aired September 4, 2003 - 15:14   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JUDY WOODRUFF, CNN ANCHOR: We continue our focus on the California recall with a look at how supporters of Governor Gray Davis view the governor's chances.
With me now from San Francisco is Steve Smith. He is the governor's campaign director.

Steve Smith, first of all, can the governor beat this recall if he's not even going face-to-face with the other candidates in these debate situations like last night?

STEVE SMITH, GRAY DAVIS CAMPAIGN DIRECTOR: Absolutely he can beat the recall.

The reason the debate was set up the way it was last night is, in California, there's two questions on the ballot. There's question one, which is yes or no on the recall. And then there's question two, which lists all the alternative candidates.

We're obviously focused on question one. And the debate last night was set up to reflect the ballot, where the governor stated his case on the recall that will be question one. And then the rest of the candidates debated on question two, which is the replacement candidate.

WOODRUFF: Well, that being the case, however, with all the increased focus on these replacement candidates, doesn't that cut into and undercut the governor's efforts to build up his own case? When you've got more attention on, whether it's Arnold Schwarzenegger or Cruz Bustamante or Arianna Huffington or whoever it is, doesn't that inevitably hurt the governor's efforts to build up his own credibility?

SMITH: That's one of the reasons, frankly, why the governor is traveling all over the state and doing these town hall meetings.

The Walnut Creek half-hour before the debate was a semi-town hall meeting. He's doing another town hall meeting in San Diego tonight. He was in San Francisco last week, Los Angeles. And we're moving all around the state and letting the governor really make his case directly to the voters, what he's gotten done, the fact that the test scores are up, the fact that more kids have health care. There's a lot of good things that have happened in the last few years.

WOODRUFF: We heard last night the lieutenant governor, Democrat Cruz Bustamante, say, if he had been governor during the power crisis, energy crisis last year, that he would have called the power companies' bluff.

Now, clearly, he's setting himself apart from Governor Davis. Do you think the governor is going to be prepared to endorse Cruz Bustamante at the right moment?

SMITH: Well, actually, going back to the energy situation, the governor, frankly, himself, acknowledged that he moved too slowly in that situation.

He kind of smelled a rat, that we were being taken to the cleaners by the out-of-state energy companies. But everyone told him what he should do is just raise rates. He refused to do that. He did call their bluff. But it took him a while to do that, because he was, frankly, afraid of risking the energy grid here in California.

When New York went down a couple weeks ago -- in fact, a lot of the East Coast went down two weeks ago -- California stayed up. And that's because of the efforts that happened on energy. But we were too slow to act. Hindsight is always 20/20.

WOODRUFF: Right. Right. I was trying to get at the disagreement between him and the lieutenant governor.

But let me quickly also ask you about the governor's comment last night that there are times, dealing with the state budget deficit, which is enormous, when there's going to be a need to raise taxes. Does that signal to all the state voters that raising taxes is going to be the primary prescription if this governor is not recalled?

SMITH: No.

Actually, we've gotten through most of the budget crisis. As you know, last year, it was over $30 billion. And the governor did propose increasing taxes on the wealthy and increasing the cigarette tax. The Republicans rejected that and forced us instead to have to increase the car tax, which is something the governor, frankly, didn't want to do. But we're through most of that now. This year's budget is balanced.

We do have a structural deficit that's much smaller than the one we were confronting with last year. And over time, we'll work through that.

WOODRUFF: All right, Steve Smith, we're going to have to leave it at that. He is Governor Gray Davis' campaign director. We appreciate your talking with us today.

SMITH: Thank you.

WOODRUFF: Thank you very much.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com