Schwarzenegger Makes No Apology for Reversal on Tax Increases

The governor went on to say that Republicans in Washington should put aside their ideology and work with the president to solve the economic crisis. "I think that they should make an effort to work together and to find what is best for the people, because by derailing everything, it's not going to help anybody, and it creates instability and insecurity," he said. "You've got to go beyond just the principles. You've got to go and say, 'What is right for the country right now?'"

The governor was asked by Stephanopoulos why -- given that he supports the stimulus, backs the president's budget plans and his policies on energy and the environment, and agrees with Democrats on gay rights and abortion -- is he still a Republican.

"I still believe in the Republican principles," Schwarzenegger said. "But remember one thing... it doesn't really matter if you're a Republican or Democrat. I think that so many people get caught up with this whole thing. We are elected to be public servants. So what does it matter if you're a Democrat or a Republican?...We should go beyond all this. Is it a Republican idea or is it a Democratic idea? Which philosophy does it fall under? It doesn't matter."

California is also facing one of the worse foreclosure crises in the country. Critics have responded to Obama's plan, laid out last week, saying it creates a moral hazard by bailing out people who are unable to pay their mortgages while offering no government help to those who were responsible with their mortgages.

Asked if this is fair, the governor explained "every situation is different... I think that people just need a little bit of help. What does the bank do when they get stuck with a house that is 40 percent -- has 40 percent less value? I mean, that has been a huge problem in this country in general, because eventually they think that the banks have to -- and the lending institutions have to figure out what to do with that asset. You know, should it be written off, those trillions of dollars of assets?"

On the banking crisis, Schwarzenegger said he may be open to the prospect of nationalizing some of the nation's struggling banks. "Well, with some banks, that's maybe necessary," he said. "I think the most important thing is, how do we create stability in this country? And I think this is why it is very important that the administration has a very clear message and not change it. I think that what America has really gone through, a huge challenge just this last year, because we have had a different administration. They have a different way of thinking. No -- no one here is right or wrong, but a different way of thinking."

Get George Stephanopoulos' latest tweets and reporting by following him on Twitter, Facebook, and George's Bottom Line blog.

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