'This Week' Transcript: Gov. Schwarzenegger

You've got to recognize that this is the time, now, to renegotiate and to work in a different way -- like we have proposed a furlough to have, you know, our state workers, for instance, not work one day a week and not get paid for that day.

We've got to find ways to cut down, because there's not that much money around, right now. It's a different world.

STEPHANOPOULOS: So reform, but if they reform, then they can get some of the federal money?

SCHWARZENEGGER: Then I'm fine with that, yes.

STEPHANOPOULOS: You mentioned a stimulus, aid to state and local governments, as well. You've actually petitioned President Bush and leaders in Congress, saying that they should pass a stimulus package.

Now, yet President Bush is resisting that. So are your Republican colleagues in the Congress.

SCHWARZENEGGER: Well, I think that there's different ways of thinking. You know, that doesn't mean that when I, as a governor, who have my stated interest -- you know, I represent the state. You know, I don't care about what anyone's philosophy is. I will fight for the State of California. And so I proposed that we should get help from the federal government, if we can -- again, also, like the car manufacturers -- can prove that we have our fiscal house in order, and that we can solve our problems ourselves.

But give us, in this emergency kind of a situation, or in this crisis, some additional money. Help us with Medi-Cal and with some other kind of things that -- because, remember that Washington is collecting from California so much money that they are, you know, giving us 80 cents on the dollar.

So I think, when we are in a state of emergency like this, I think that Washington can give some of that money to the state. And we're not talking about a lot of money, but maybe $5 billion a year, for the next three years, until we get out of this economic crunch that we're in.

STEPHANOPOULOS: The economic advisers to President-Elect Obama see this emergency, as well. And some of them say, you know, next year we're going to have 8 percent or 9 percent unemployment in this country.

The Federal Reserve is out of any room to maneuver. And they say that it might even be necessary to consider a stimulus package of $500 billion, $600 billion. Do you support that?

SCHWARZENEGGER: Well, I cannot get into the numbers, you know? But I can tell you one thing.

The most important thing, right now, is to recognize the fact that this is not the end of the economic slowdown. There is no sign that shows that there's an upswing next year.

So when you come up with rescue packages, or with economic stimulus packages and all those things, don't think just about now. Think what will happen within the next few months or the next year. Things will get worse. Unemployment will get worse. The housing crisis will get worse. The mortgage situation is going to get worse.

So what we have to do is we have to plan for that worst situation, rather than always one month at a time. And then, each month, we have to make the adjustments and adjustments and adjustments.

And that's when the people of the United States and of the various different states start losing faith in government. They say they don't have their act together. They change all the time. They change the package all the time. They have a rescue package number one, and number two, number three, and number four. Why not just come up with a good program?

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