'This Week' Transcript: Gov. Schwarzenegger

SCHWARZENEGGER: Well, no one should be that worried about any of that, because remember, the way it works is that the governor puts up a proposal, and then the legislative leaders go and start debating over that and looking into it, if they maybe have a better idea or a different idea. So we have a very collaborative kind of approach to the whole thing. So they may come up with different type of taxes.

I totally agree with you. It is very hard when you have to increase taxes, no matter when you have to increase taxes...

STEPHANOPOULOS: You don't want to do it.

SCHWARZENEGGER: I don't want to do it. I hate taxes. I hate the word "taxes" and all of those things. But there's certain times when you have to forget about the ideology, and, you know, all of this, and fix problems...


SCHWARZENEGGER: Because people want their fixed problems.

STEPHANOPOULOS: That is exactly the same debate that's going on in Washington right now. And there's this question whether the federal government should step in and throw a lifeline to the automobile industry, the domestic automobile industry. Should they?

SCHWARZENEGGER: Well, first of all, I think the important thing for the federal government is to look and follow through with what they intended to do in the first place with the $700 billion. I think the key thing is to show consistency to the financial community and to the American people, so you don't have to, you know, going back and forth and changing too many times, and also to show to the world's financial community that America has its act together. We know there's a problem in the economy, and here's how we fix it. So that's number one.

Number two, I think it's important for the United States and Washington to look at the states, which states are struggling, and maybe helping them out.

Number three, if they go in the direction of helping companies like the car manufacturers, I think it's very important to not just put money in, but let's go and see if they have been fiscally responsible, and if they're really operating the right way. Because right now, all of those -- you know, if you pay the auto workers or the benefits and all of those things, are maybe too high. Right now, if you compare it to Germany and to Japan and to other countries, they can build cars cheaper, and they don't have that overhead with the amount of what they pay to the workers, the benefits they provide.

SCHWARZENEGGER: We have, like, in America, you sell a car, and you have $2,000 of each car just goes to benefits.

So I think that there's a way of reducing all of that, make them more fiscally responsible. And then, if they have to act together and have renegotiated those deals, then, yes, you can go in there and help them out, financially.

STEPHANOPOULOS: So Democrats have said that some of that $700 billion should be used for the auto industry. You're for that if the auto industry agrees to make some changes?

SCHWARZENEGGER: Make, really, changes that are fitting our time today. This is a different world. Anyone that wants to go and think that they don't have to shift down and make changes -- if it is states; if it is local government; if it is the auto industry, or any other industry, as far as that goes, they're living in a dream world or in a fantasy world.

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