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

Interview

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CROWLEY: Joining me now Virginia Republican Governor Bob McDonnell and Massachusetts Democratic Governor Deval Patrick. Thank you both, governors, for being here.

There's a lot of talk in Washington these days about the fiscal cliff. And part of that fiscal cliff is huge cuts in the Defense Department. And for you, governor, you are number two in the states that it is estimated by the National Association of Manufacturers will lose almost 115,000 jobs if these defense cuts go through. At what point do you begin to try to figure out what that's -- what the fiscal cliff, if we go off it, will begin to affect Virginia?

MCDONNELL: Well, we're very concerned about it. Deval, I think, in Massachusetts is the fifth largest potential loser at about 38,000 jobs. And, you know, this sequestration bill that was put in place a couple -- last year was one that nobody really thought was going to go into effect. And, unfortunately, with the failure in congress and no leadership from the White House, they put $600 billion of defense spending at risk. Even Secretary Panetta said it's a bad idea.

So I'm worried not only about jobs in Virginia but I'm worried about the security of the United States of America. They can't wait until the lame duck session. They need to act, I think, now, Candy, to try to address this because defense contractors might have to send out warning notices in the next couple months to hundreds of thousands of employees saying you might not have a job.

So I think the president needs to lead on this, get congress back, and do something about sequestration.

Look, we need to cut spending. We're $16 trillion in debt, $5 trillion more because of the president's lack of leadership, but we can't do it this way and sacrifice the United States military.

CROWLEY: Governor Patrick, in fact, you will lose according to these estimates over 30,000 jobs if these defense cuts alone, this doesn't even address some of the federal funding that goes to states, just from the defense cuts alone...

PATRICK: That's right.

CROWLEY: My question to you then is the administration has said, look, this is in place. If it happens, it happens. Do you go along with that position?

PATRICK: Well, I don't think anybody wants this to happen, but, remember, we have sequestration because the Republican congress wouldn't reach out -- reach back to the president on a balanced approach, which was a combination of cuts and tax increases, particularly for the most fortunate, to pay for bills that they helped to run up.

And so when I hear about issues of leadership, remember, it was the president who reached a deal with Speaker Boehner more than a year ago now. Speaker Boehner couldn't sell it with his Tea Party caucus back in the House.

CROWLEY: You know we kind of are where we are.

PATRICK: ...is willing to reach back.

CROWLEY: And the question, I guess, is for the states does this then threaten you when you look at it -- you all actually have economies that are doing quite well, both of you, but does it make you worry...

PATRICK: That's right.

CROWLEY: ... about sending the economy in your states and elsewhere back down?

PATRICK: You had...

CROWLEY: Governor McDonnell?

PATRICK: ... better believe it does, and I think the same is true of Governor McDonnell.

CROWLEY: Governor McDonnell?

MCDONNELL: Yes, I think we both agree. Look, it's a bipartisan failure that we got to the point where we're at, where we're running up this much national debt. But this president, $5.2 trillion in new national debt, we need to be able to cut spending, and $1.2 trillion in sequestration, Candy, honestly with the American people, that's not enough.

That's not even one year of deficit spending, and those cuts are over 10 years. So we've got to cut more. But to do it in this reckless way where the Defense Department doesn't have a plan on how this is going to be done and to put hundreds of thousands of defense jobs at risk in the next 60 days and no action by Congress in the near future is irresponsible.

The president needs to take leadership and say, let's get back and let's fix this now to create certainty.

CROWLEY: Let me move you now to the Medicaid...

PATRICK: Candy, may I just...

CROWLEY: Yes, of course, go ahead, Governor.

PATRICK: I just wanted to add I don't think that the argument is really about a willingness by the Obama administration or the president, particularly, to cut spending. He has done so. He has proposed to do so. And he has shown a willingness to do more. The question is whether we are going to have a balanced approach, which includes raising some revenue, which is what every responsible economist and financial analyst says is necessary. And the Tea Party Caucus, which has, as you know, an outsized influence in the Congress today, says "heck no" to that. And until we clear that up and clear them out, frankly, we're not going to get the kind of solution that makes a difference for the long term interests of the American people.

CROWLEY: Let me ask you while I have you...

MCDONNELL: Well, Candy, that's just...

CROWLEY: Go ahead. Go ahead, Governor McDonnell.

MCDONNELL: Well, that's just flat wrong. I mean, if you look at the states that are raising taxes and increasing regulations, like Maryland or Massachusetts or Illinois and California, they've got big problems.

You look at the states that are actually maintaining a lid on taxes and balancing budgets without raising taxes and having pro- growth strategies, 12 out of the 15 top states for business have Republican governors. And every one of new Republican governors elected in the last two years have cut their unemployment rates.

So there's something different going on and that's why Mitt Romney is saying, look, you like the way the governance works in Republican-governed states, elect me and you're going to see more of the same.

So these tax policies are important. President Obama's big tax increases in "Obama-care" and on...

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CROWLEY: Let me...

MCDONNELL: ... all small businesses, that's the wrong approach.

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CROWLEY: Governor Patrick...

PATRICK: I've got to straighten out that...

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CROWLEY: I will let you straighten it out after we take a quick -- let me take a quick break. I promise you the first word when we come back and we also want to talk a little politics.

PATRICK: OK. Thank you.

(COMMERCIAL BREAK) CROWLEY: We are back with Virginia Republican Governor Bob McDonnell and Massachusetts Democratic Governor Deval Patrick.

Governor Patrick, I promised you the next word. PATRICK: Well, I was just going to say Governor McDonnell is a good man and a good governor, but he has misrepresented Massachusetts. I have got to straighten that out. I mean, the unemployment rate in Massachusetts is about what it is in Virginia and well below the national growth rate. We're growing -- unemployment rate.

We're growing twice as fast as the national growth rate. And many of the things that Mitt Romney left broken we have fixed. So a strategy, which is about investing around growth, investing in education, in infrastructure, and in innovation, which is actually quite like what is happening in Virginia, is working in Massachusetts as well. And it's precisely the strategy that the president has proposed at the national level.

The problem is that the Congress has been very reluctant to give him the tools to deliver on that strategy. There's a bill pending that has been pending for 11 months now in the Congress around investing in infrastructure and in education and the Congress has simply said no.

That's the kind of thing we are doing in our states that's getting growth and that we can do nationally.

CROWLEY: Let me move you all to the Medicaid argument at this point, states under "Obama-care" being asked to expand Medicaid in a way that allows more people in as part of how you get coverage to everyone.

Governor McDonnell, you know that there are a number of Republican governors who are resisting despite the fact that the federal government is offering to pay 100 percent of the cost of the additions that you put on those Medicaid rolls.

And in 2021 it's just going to be reduced to 90 percent. Currently it's only 50 percent of the cost. Why are so many Republicans turning this down? Is it as everyone suggests, politics?

MCDONNELL: No. The federal government makes a lot of promises that they don't keep, first of all. Secondly, when you're $16 trillion in debt and you're promising hundreds of billions of dollars of new spending to the states, we're having a hard time believing where they're going to get that money unless you put America in more debt.

Here is the issue. Expanding Medicaid without reforming Medicaid is a terribly bad idea and irresponsible. President Obama said exactly that three years ago when he was making proposals.

So a couple governors have said, no, we're not going to do it. But, Candy, most of us are not saying that. We're saying, look, we don't have all the answers. I sent a letter on behalf of 29 Republican governors to the president and the secretary a couple of days ago with 30 decent questions about what does this mean in light of the court's ruling?

We're waiting for some good answers on that, but we don't know a lot about what the implications are. For Virginia it's $2.2 billion of new entitlement spending over the next 10 years in a program that's already busting the budgets in every state in the country.

So we have to get more information, and, frankly, we're not going to waste taxpayer money now if Mitt Romney wins. On day one he said waivers to the states and we're going to repeal and replace this "Obama-care." So we ought to wait and see.

CROWLEY: Governor Patrick, I want to turn you to a different subject. We had this week dueling appearances by Joe Biden and Mitt Romney in front of the NAACP. The president chose not to go saying he had a scheduling conflict, but there's a lot of talk that perhaps the president is taking the black vote for granted, not that it will go to Mitt Romney, but that perhaps there is less enthusiasm there now than there was four years ago.

Can you speak to that and the enthusiasm gap as some are calling it?

PATRICK: Well, first of all, Candy, I think it's important for people to know this president isn't taking any vote for granted, not black people, not other minorities, not women, not people in the so- called battleground states, not people in the so-called red states.

This is a president who ran for office to serve as president of the whole country, not of a particular party or a particular group. And that means people who agree with him on this or that policy choice and those who don't, and that's how he has governed.

He has got an enormously challenging task in front of him in running for re-election while trying at the same time to govern. And that means helping to lift this country...

CROWLEY: Do you sense a lack of enthusiasm?

PATRICK: ... out of the worst economic collapse in history.

CROWLEY: Do you sense...

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PATRICK: No, I don't. As a matter of fact, I have been -- look, he has made some decisions. Not every one of which I agree with or that people agree with, but I think people understand that this guy is about all of us being in this together and trying to leave a better country than he found.

Not doing anything or saying anything, like this Republican nominee, to be president, but instead doing anything necessary to help the country.

CROWLEY: Governor McDonnell, I have exactly 30 seconds for you to tell me how Mitt Romney is going to win in Virginia.

MCDONNELL: You know, the president is a good man, a good family man, but he has been an abysmal president. The policies that he has put in place have hurt our state, 41 months in a row over 8 percent, in fact, disproportionately affecting young people and African- Americans.

Mitt Romney is going to win Virginia because the independent voters don't care about tax returns and Bain Capital. They care about getting the greatest country on earth out of debt, back to work, a coherent energy strategy, and strong leadership that will make us proud again around the world.

MCDONNELL: And that's why I think his ideas on making us more competitive, to compete with China and India and making us once again the economy that's the envy of the world, that's going to carry the day in Virginia.

CROWLEY: Governor Bob McDonnell in Virginia, Governor Deval Patrick in Massachusetts, thank you both for your time.

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