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Interview With Bill Simon

Aired October 14, 2003 - 15:04   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: President Bush is getting ready to rub shoulders with the GOP's newest star. The White House announced today that Mr. Bush will meet with governor-elect Arnold Schwarzenegger in California on Thursday. In an interview yesterday, the president had good things to say about Schwarzenegger.
(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: One of the things he did initially, as I understand it, was to put together kind of a blue-ribbon panel of smart people to help make -- help him make decisions necessary to get the California economy growing again, to create the conditions for economic growth.

One of the people on that panel was my friend George Shultz, who's really a smart guy. And I look forward to hearing what Arnold's plans are. And I look forward to congratulating him on a pretty darn good victory.

(END VIDEO CLIP)

WOODRUFF: Schwarzenegger has said that he will ask President Bush for a lot of favors. Right now, the House says it's not making any promises about how it might help him out.

Well, Schwarzenegger's working with the various members of his transition team these days as he prepares to take over the state's top job and its economic problems.

Former gubernatorial candidate Bill Simon is a member of that transition team and he joins us now from Los Angeles.

Mr. Simon, first of all, what is the transition team doing, and what are you doing as a member of the team?

BILL SIMON (R), FORMER CALIFORNIA GUBERNATORIAL CANDIDATE: Well, Judy, we have been getting together by telephone, been meeting privately and in smaller groups. And we have some phone calls set for this week. So we've been very busy. And we're looking forward to advising the governor-elect.

WOODRUFF: Are they listening to your advice?

SIMON: Absolutely. They're moving very quickly and I think very prudently and working very hard. I think Arnold is taking some very significant steps. And, as President Bush, in forming the transition committee, there are a lot of smart people on this committee. And they represent a lot of different beliefs and backgrounds, which I think is very healthy.

WOODRUFF: We notice there are a number of Democrats, as well as Republicans on this transition team. Are they being listened to as well?

SIMON: Everybody's being listened to. And everybody's opinion is being solicited, which is very, very healthy I think.

WOODRUFF: What would you say is the governor-elect's main challenge once he's in office?

SIMON: I think, right now, it's the budget. We've got a significant structural deficit of about $9 billion. And if and when Governor Schwarzenegger repeals the car tax, which he said he wants to do, that will add to the deficit by about $3 billion. So the structural deficit will grow to approximately $12 billion to $13 billion.

That is a very significant number, as you know. And I think that's probably his most significant issue at this point in time.

WOODRUFF: Any doubt in your mind that he's going to repeal that car tax?

SIMON: No doubt.

WOODRUFF: And assuming he does, any doubt in your mind that he can make up that deficit without raising taxes?

SIMON: I have no doubt about that either.

I put forward a budget plan myself a couple months ago showing how you could do both, repeal the car tax and also balance the structural deficit going forward. You're going to have to make some very difficult decisions, no question about that. But I do believe it's possible.

WOODRUFF: Well, I want to ask you a little bit more about how, because a number of reputable people who have looked closely at California's budget say, with 40 percent of the budget off limits -- that's the part that deals with education in California -- off limits -- the governor said he wouldn't cut that -- Mr. Schwarzenegger has said that -- where do you get the money to make up this $12 billion, $13 billion shortfall?

SIMON: Well, first of all, the governor's announced he wants to do an audit and appointed someone to head up that audit. And I think that's going to result in very, very significant savings. We thought during my campaign that that could total somewhere around $3 billion to $4 billion.

And so I think there's a lot of savings right there. That could, in effect, go a long way toward covering the hole made by the repealing of the car tax. In addition, if you go back now a couple of years, Judy, you'll see that the government out here in California has grown by about 40 percent during the time that the underlying rate of growth was about 20 percent.

The bottom line really is that the government grew too quickly. There are plenty of places to cut. And so, although much of the budget, 40 percent -- I actually think it's a little higher than that -- is not open to discretion, I think the part that is discretionary to the governor and the legislature will provide plenty of room to cut.

WOODRUFF: I'm sure you're aware that the Democrats who have -- the state comptroller and other members of the state legislature have said, this budget has been gone over with a fine-tooth comb, and they don't see where another $3 billion or $4 billion in saving is going to come from.

SIMON: Well, with all due respect, I don't think that fine-tooth comb -- it was missing a couple of slots, I think, because I think that there's plenty of places to cut.

And, in fact during the plan that we submitted, whether it Medi- Cal fraud or waste and mismanagement, that we thought we could find $3 billion, I just think that, frankly, we need a new broom to sweep clean. And that's why I think it's great to have Governor Schwarzenegger in Sacramento, because I think he's going to provide that new leadership.

WOODRUFF: All right, Bill Simon, a former gubernatorial candidate himself, thank you very much. Good to see you again.

SIMON: Nice to see you too. Thank you.

WOODRUFF: Thank you for talking with us.

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 October 14, 2003 - 15:04   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JUDY WOODRUFF, CNN ANCHOR: President Bush is getting ready to rub shoulders with the GOP's newest star. The White House announced today that Mr. Bush will meet with governor-elect Arnold Schwarzenegger in California on Thursday. In an interview yesterday, the president had good things to say about Schwarzenegger.
(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: One of the things he did initially, as I understand it, was to put together kind of a blue-ribbon panel of smart people to help make -- help him make decisions necessary to get the California economy growing again, to create the conditions for economic growth.

One of the people on that panel was my friend George Shultz, who's really a smart guy. And I look forward to hearing what Arnold's plans are. And I look forward to congratulating him on a pretty darn good victory.

(END VIDEO CLIP)

WOODRUFF: Schwarzenegger has said that he will ask President Bush for a lot of favors. Right now, the House says it's not making any promises about how it might help him out.

Well, Schwarzenegger's working with the various members of his transition team these days as he prepares to take over the state's top job and its economic problems.

Former gubernatorial candidate Bill Simon is a member of that transition team and he joins us now from Los Angeles.

Mr. Simon, first of all, what is the transition team doing, and what are you doing as a member of the team?

BILL SIMON (R), FORMER CALIFORNIA GUBERNATORIAL CANDIDATE: Well, Judy, we have been getting together by telephone, been meeting privately and in smaller groups. And we have some phone calls set for this week. So we've been very busy. And we're looking forward to advising the governor-elect.

WOODRUFF: Are they listening to your advice?

SIMON: Absolutely. They're moving very quickly and I think very prudently and working very hard. I think Arnold is taking some very significant steps. And, as President Bush, in forming the transition committee, there are a lot of smart people on this committee. And they represent a lot of different beliefs and backgrounds, which I think is very healthy.

WOODRUFF: We notice there are a number of Democrats, as well as Republicans on this transition team. Are they being listened to as well?

SIMON: Everybody's being listened to. And everybody's opinion is being solicited, which is very, very healthy I think.

WOODRUFF: What would you say is the governor-elect's main challenge once he's in office?

SIMON: I think, right now, it's the budget. We've got a significant structural deficit of about $9 billion. And if and when Governor Schwarzenegger repeals the car tax, which he said he wants to do, that will add to the deficit by about $3 billion. So the structural deficit will grow to approximately $12 billion to $13 billion.

That is a very significant number, as you know. And I think that's probably his most significant issue at this point in time.

WOODRUFF: Any doubt in your mind that he's going to repeal that car tax?

SIMON: No doubt.

WOODRUFF: And assuming he does, any doubt in your mind that he can make up that deficit without raising taxes?

SIMON: I have no doubt about that either.

I put forward a budget plan myself a couple months ago showing how you could do both, repeal the car tax and also balance the structural deficit going forward. You're going to have to make some very difficult decisions, no question about that. But I do believe it's possible.

WOODRUFF: Well, I want to ask you a little bit more about how, because a number of reputable people who have looked closely at California's budget say, with 40 percent of the budget off limits -- that's the part that deals with education in California -- off limits -- the governor said he wouldn't cut that -- Mr. Schwarzenegger has said that -- where do you get the money to make up this $12 billion, $13 billion shortfall?

SIMON: Well, first of all, the governor's announced he wants to do an audit and appointed someone to head up that audit. And I think that's going to result in very, very significant savings. We thought during my campaign that that could total somewhere around $3 billion to $4 billion.

And so I think there's a lot of savings right there. That could, in effect, go a long way toward covering the hole made by the repealing of the car tax. In addition, if you go back now a couple of years, Judy, you'll see that the government out here in California has grown by about 40 percent during the time that the underlying rate of growth was about 20 percent.

The bottom line really is that the government grew too quickly. There are plenty of places to cut. And so, although much of the budget, 40 percent -- I actually think it's a little higher than that -- is not open to discretion, I think the part that is discretionary to the governor and the legislature will provide plenty of room to cut.

WOODRUFF: I'm sure you're aware that the Democrats who have -- the state comptroller and other members of the state legislature have said, this budget has been gone over with a fine-tooth comb, and they don't see where another $3 billion or $4 billion in saving is going to come from.

SIMON: Well, with all due respect, I don't think that fine-tooth comb -- it was missing a couple of slots, I think, because I think that there's plenty of places to cut.

And, in fact during the plan that we submitted, whether it Medi- Cal fraud or waste and mismanagement, that we thought we could find $3 billion, I just think that, frankly, we need a new broom to sweep clean. And that's why I think it's great to have Governor Schwarzenegger in Sacramento, because I think he's going to provide that new leadership.

WOODRUFF: All right, Bill Simon, a former gubernatorial candidate himself, thank you very much. Good to see you again.

SIMON: Nice to see you too. Thank you.

WOODRUFF: Thank you for talking with us.

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