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CNN "State of the Union with Candy Crowley" - Transcript

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CROWLEY: In the post-election analysis, most of the attention has been on changes in Washington, but the impact of the 2010 red wave was wide and deep. Now Republicans want to make it lasting. Friday, the soon-to-be House Speaker John Boehner sent out a call for reinforcement, a letter to Republican governors, writing, "We have an opportunity for unprecedented collaboration on behalf of the American people in the effort to stop the expansion of federal power in Washington in hopes of returning power and freedom to states and individuals."

Joining me now, two of the country's most prominent Republican governors, Rick Perry of Texas and Tim Pawlenty of Minnesota. Thank you both very much for joining us. Let me start with you, Governor Pawlenty. It seems to me that the subtext of John Boehner's letter was you need to help us stop health care. You're an outgoing governor, but I want to ask you if you think that's a good idea.

PAWLENTY: I think it's a terrific idea, Candy, and good morning to you and good morning to Rick. I think Obamacare is one of the worst pieces of legislation passed in the modern history of the country. I'm doing everything I can in Minnesota to stop, delay or avoid its implementation in my state, including signing an executive order saying we're not going to participate unless required by law or approved by me. We've been given opportunities to early enroll in that program and take advantage of other aspects of it. We declined, and I hope between now and 2014 when it's fully kicked in that as many states as possible do what they can to reel that program back, or that the new Republican Congress, better yet, can repeal it, because it's dragging stuff into Washington, D.C., creating a new bureaucracy, spending a new -- a lot of new money that they don't have, isn't going to work. We should have market-based solutions.

CROWLEY: I want to show both of you, and Governor Perry, have you respond to this. This was from our CNN exit poll. The question was what should Congress do with the new health care law? Expand it -- 31 percent said yes. Leave it as it is -- 16 percent said leave it as it is. Repeal it, 48 percent.

So basically 47 percent of those who went and voted said either expand it or leave it alone; 48 percent repeal. So really there's a tie in the country. What kind of mandate is that?

PERRY: Well, you've gone from a lot of people thinking this might be a good idea to every day people find out the cost and -- my wife's a nurse, father-in-law a physician -- they understand intuitively that what this is going to do, if it goes into place or if it goes into as it is written, we will be rationing health care. Doctors will get away from Medicare, Medicaid type--

CROWLEY: But if you're listening to voters, as Senator McConnell says you want to do, the voters didn't say repeal this thing, stop this thing.

PERRY: I think they did.

CROWLEY: They pretty much split down -- but 47 percent didn't.

PERRY: Let me tell you -- let me tell you why they said that, and here is what's not penetrated really through to the public yet, is the cost of this.

The state of Texas, $27 billion more, over and above what we're already paying over the next 10 years, $2.7 billion every year. This is the type of money that will bankrupt states.

So people are looking at it from the standpoint of, well. does everybody need to have coverage, does everybody -- and I think intuitively folks say yes, but they haven't thought about the cost. You know, is this a great product to buy? Yes, but you don't know what the real cost is. Once you see the cost, it's kind of like, you know what, we can't afford that, so let's look at something else.

CROWLEY: Governor Pawlenty, also in these exit polls, we found that 52 percent of voters had an unfavorable opinion of Republicans. That is 10 percent higher than had an unfavorable view of Democrats. Your name often mentioned as someone who might want to run for president. I would think that those would be concerning numbers to you.

PAWLENTY: Well, I think the message of this election, Candy, primarily but not entirely related to the economy. People see and understand the economy is still in the doldrums, and when you mess with people's livelihoods, they come looking for you and they want change. And that's what happened. But it's not so much that people reembraced Republicans. It said they didn't like the direction President Obama and Nancy Pelosi and the Democratic Congress was taking the nation, and now they're at least opening the door to reconsidering supporting Republicans, and now we have to govern and lead and produce results. And if we don't, we'll be thrown out in two years.

And so I agree with the premise of your question. It's a second chance really for Republicans, not an affirmation of the great work we've done in the past. It's an open door for the future.

CROWLEY: Governor Perry, most Republicans, you among them, have said the federal government has got to stop spending money. Yet in Texas, you face an $18 billion deficit at least coming into January. Governor Pawlenty, although he's outgoing, has about a $6 billion deficit they're looking at in Minnesota, and yet you want the government to cut back, which necessarily means they will not be giving money to the states. Doesn't this just worsen your problem? There's an idea out there, let's cut spending but hold off on it. Pass a law to cut spending, hold off a year or two while everybody stabilizes themselves. What about that?

PERRY: Well, my book is called "Fed Up: Saving America from Washington," and that's exactly what the issue is. We don't have budget deficits in Texas because we have a balanced budget amendment there.

CROWLEY: Right, you have to cut spending or raise taxes.

PERRY: We have a shortfall -- cut spending -- that's right, that's the options in Texas. We had the same thing in 2003. We reduced, and that was a $10 billion shortfall back in 2003. We reduced that. We filled that gap without raising taxes. We'll do the same thing this time.

And I've told Washington no two times on unemployment insurance, $550 million, and also a billion-dollar plus program called Race to the Top on education. We told them no.

CROWLEY: But you also took billions in stimulus money that really helped with your budget, and let me just turn to Governor Pawlenty here and ask you the same question. This is a time when states really are facing record deficits. The problem is they've been cutting spending, they've been doing a number of things to try to bring these things under control, and now Republicans want the federal government to stop spending. Doesn't this really limit the things you can do and aren't the states looking to stop some of their services? PAWLENTY: You know, I don't think it's just Republicans that want the federal government or others to stop spending at excessive levels, and I think Rick's book "Fed Up" summarizes it really well, which is they're telling the federal government, tighten your belt, live within your means just like everybody else.

Candy, I echo what Rick just said about budgets. In Minnesota, we're required to balance our budgets, we've done it, and our budget deficit by the way is based on a projected increase by the bureaucrats that spending is going to go up on autopilot over the next two years 17 percent.

That's outrageous. That's ridiculous. It's way beyond anything that's going to be growthed in the private sector, and it is that kind of autopilot spending and entitlement spending and that kind of mentality that creates a lot of this problem.

And what we're saying, what Rick is saying, what I'm saying is government needs to live within the revenues that are available, and we need to have a growth in government or a reduction in government that reflects reality. And right now it's insulated from reality and people are sick of it.

CROWLEY: Governor Perry, one of the things I believe you say in your book -- and forgive me for not having read it yet -- is that you think perhaps dropping out of Medicaid, the state dropping out of Medicaid, and you have even talked about dropping out of the children's health insurance program, otherwise known as CHIPs. You've got the last time I looked about 3.6 million children disabled or poor in Texas who would then lose their health benefits. What happens to them if you opt out of Medicaid?

PERRY: What we think works very well -- and I totally agree with what Tim was talking about from the standpoint of those bureaucrats who are shooting these huge numbers forward -- but let me back to the issue at hand.

We would create our own insurance program for them. And I've had a waiver request for four years--

CROWLEY: But the government gives you 60 percent of the money to fund this. How does that add up to help you?

PERRY: We understand that's our money. You talked about us taking stimulus dollars. We send hundreds of billions of dollars to Washington, D.C., and generally don't get very much of it back. We'd just as soon not send as much money to Washington, D.C. Let us in the states come up with the ideas. I can promise you, Pawlenty and Jindal and Barbour and some Democrat governors across this country as well will come up with really good ideas about how to deliver health care. Why not let us pick and choose, rather than this one-size-fits-all mentality that comes out of Washington, D.C., with strings attached?

I've had a waiver for four years in front of Department of Health and Human Services, and haven't gotten an answer yet, to free us from the strings from Washington, D.C. That is the issue at hand. Let the states be the laboratories of innovation and the good ideas will come out of that.

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PERRY: And I can promise you, Pawlenty and I will go snitch from each other and put them in place in our states.

CROWLEY: Governor Pawlenty, last one to you, two questions, actually. First of all, will you run for president? And second of all, I'm going to show you a poll here, when we asked Republicans their choice for the nomination, Huckabee at 21, Romney 20, Palin 14, Gingrich 12, Pawlenty 3 percent. What do you make of that poll?

PAWLENTY: Well, I don't know for sure what I'm going to do after I'm done being governor, Candy. I'll decide that early next year. And as to the poll, you know, a lot of those early polls, whether it's me running or somebody else, reflect familiarity, name ID, and I -- you know, you see front-runners in the past with similar situations that change over time.

So these early polls I don't think mean much for me or any other potential candidates, especially if you haven't run before and aren't well-known.

CROWLEY: And if I could get just a yes or no from you, would repealing health care reform be a major part of your platform, should you run?

PAWLENTY: Yes, I think having health solutions dragged into Washington, D.C., top-down command-and-control, bureaucratically run entitlement programs that they can't afford are a bad idea. I like markets, I like people being in charge of decisions, not the federal bureaucracy.

CROWLEY: Governor Tim Pawlenty of Minnesota, thanks so much for joining us. Governor Rick Perry, thanks for being here, appreciate it.

PERRY: Thank you.

CROWLEY: When we return, President Obama and the next speaker, John Boehner, a shotgun marriage if ever there was one.

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