TRANSCRIPT: ABC News' Chris Cuomo Interviews Gov. Arnold Schwarzenegger

July 22, 2009 — -- The president's health care push comes at a time when some states are slashing budgets. California Gov. Arnold Schwarzenegger faces a $26 billion shortfall in his state. He discussed the president's health care initiative and his thoughts on what it means for California.

CHRIS CUOMO: Your state is somewhat of a window into the reality of health care. You've been pictured at your desk with a big knife having to cut the budget. Over $1 billion in health care cuts. It's gonna affect low income families. It's goin' to affect the coverage that children get. Is this absolutely necessary?

ARNOLD SCHWARZENEGGER: Well, you know, when you have a $26 billion shortfall in revenues, then you have to go and do a combination of things. And one of the things you have to do is make deep cuts in various different programs. But the important thing at the same time is that the cuts are not just cuts.

They're also coming from reforms. Very important reforms in welfare, for instance, or in in home services where we cut some of the fraud and the abuse in in home services. That will save us billions of dollars down the line and also the same is with CalWorks or welfare reform where we finally created a system where people'll get a second chance, but at the same time it shouldn't become a way of life like it has been in California. So we saved billions of dollars also there. So there were good things that happened, but also it was without any doubt a tough budget but a necessary budget.

CUOMO: Some controversy surrounding reform in the prison system. That some 27,000 prisoners may get out early just to save money. Is that too much just for cost savings?

SCHWARZENEGGER: Well, first of all I think that there's all kinds of rumors flying around about prisoners getting out early and all of those things, which is incorrect. You have to understand that we have thousands of undocumented immigrants that are incarcerated. Those will be handed over to the federal authorities, for instance. There's others that will be, you know, being locked up in their homes with electronic devices so they can't leave their homes and so on. So no one will be released. That is incorrect information.

CUOMO: OK. Thank you for the clarification, Governor. Looking at your fate of the state with respect to the federal government on health care, many governors do not support President Obama's health care bill because of what it will mean to their budgets. You do support Obama's bill. Why?

SCHWARZENEGGER: Well, first of all, I cannot say that I support exactly everything that is in the health care bill because I don't know exactly what is in that bill. It changes all the time, as you know. What I have said was, and I told this to the president, that I will support him 100 percent in health care reform, because I think it's necessary.

It's inexcusable that we have 48 million people in Califor-- in the whole United States that are uninsured. In California we have our own shared of uninsured. It's six-and-a-half, 7 million people right here in our state. So I think we need health care reform. And it has to be done the right way.

And of course I also made it clear to him that there will be a lot of forces and special interests out there that would try to derail him, because we have seen that also in California here. We tried to do health care reform two years ago and we were derailed. We almost made it. We had passed it through the assembly. But when it got to the Senate, then it was voted down because the special interests had that much power.

So one has to be aware of that. So you have to just navigate through that. It will be a difficult job. I'm sure he has an uphill battle in order to get there. But I think that the way he is going and the way he is promoting it and campaigning for it and the energy he's putting into it I think that he has a chance of being successful. But it's gonna be a tough road ahead.

CUOMO: Well, just to be clear, are you leaning towards supporting what the president has been talking about? I mean he's put out lots of information about his proposals. Or are you leaning away from supporting it? Which way are you leaning at this point, Governor?

SCHWARZENEGGER: I'm leaning towards reforming health care in America. And I think the whole idea of having everyone insured is a great idea. And I think it's also important to put a lot of emphasis on cost controls because we got to bring the costs down. I think that he's right on the mark on that one.

And I also like his whole idea of prevention, because we can save a lot of costs by -- through prevention and I think that we do not have enough emphasis that puts on the path of prevention, because that's where the action is.

CUOMO: Now what do you think about what it could mean for the tax burden? There are estimates that for the top level of Americans in their tax bracket, over 55 percent of their money could go to one government agency or another. I don't have to tell you -- as a top earner yourself how big a burden that could be. What do you think of that?

SCHWARZENEGGER: Well, first of all, I don't think that you can get anything like that done without paying for it. So we have to pay for it somehow. I think the trick is just to find a way of doing it so it makes sense. And I think that what happens right now in the United States is that people are not clear on what is the way of getting the funding for this health care reform.

Would it be taxed? By how much would they get -- be taxed? Who will be taxed? There's a lot of uncertainties. And so if there are uncertainties, then suspicion is created and that's what's going on right now. So I think there's a lot of uncertainties out there.

So I think that the more the president campaigns, the more Congress is going out there and explaining what they're trying to do. And to do -- let the sun shine in. Let the people have a look inside rather than keeping it kind of hidden and, you know, that's what always then creates suspicion.

CUOMO: Well, if that is a reality that the top tier of earners in America is gonna be paying over 55 percent in taxes, do you think this bill will make it?

SCHWARZENEGGER: I don't think so. I think that you have to come up with interesting ways of funding this health care. And we have for instance done different things here in California. We have tried to do, you know, go to the tobacco industry and try to get some money, some money from the hospital association. Some money from the employers. So we kind of spread it and sprinkled the responsibility all over so that not one particularly gets hit too much.

CUOMO: Now you're talking about reform as an absolute need, but right now down in Washington there's a lot of politics going on here that may determine the fate of the bill. Let me play you some sound here of what the president said about what may be going on in D.C.

PRESIDENT OBAMA (ON TAPE): There are folks who think that, you know, we should try that's, you know, dust off that old playbook. What they don't recognize is that this isn't about me. It's about the American people. And things have gotten worse since 1993.

CUOMO: You're always honest about both political parties. Governor, do you believe that the Republicans are playing politics here at the risk of people's health care?

SCHWARZENEGGER: Well, hello. (LAUGHS) I mean since when has anything been done in Washington or in Sacramento or at any capital where politics didn't play a big role in the outcome? I think that yes, politics is in ---

CUOMO: Just to clarify the point you were making, Governor. I, of course, there's always politics going on. The question is it upstaging the need to help people right now? Is this getting to be a little bit of a reckless situation?

SCHWARZENEGGER: Well, look, I think that is nothing unusual because every time you try to address the issues like that, you always run into this problem that people make decisions based on what's, you know, good for the politics. What is good for the special interests. And sometimes the last thing they think about is what is good for the people.

And, you know, that's nothing new. But I think that it is very important in the legislature, in Washington (UNINTEL) through that. And I think the president is doing a good job. He's (UNINTEL) around from campaigning all over the country and to make people aware of the importance of health care reform.

And I have made it clear myself to him that I will do everything that I can to help. The key thing is now is not to overburden people with taxes and all those things, obviously, because everyone is struggling. Businesses are struggling in America. The economy's down. So now is a very sensitive time to do that.

And I think the Republicans will go and use the (UNINTEL PHRASE) if you raise the taxes because, you know, next year will be a big, heavy (UNINTEL) year. Will be election year again. And since has to be very careful if they want to vote for something like that or not.

CUOMO: What's your best guess as to whether or not President Obama can get ---

(OVERTALK)

CUOMO: --- a health care reform bill passed?

SCHWARZENEGGER: Well, I think that I'm always a positive person. I always feel that anything is possible. And I think that he just has to go all out and keep campaigning and keeping and keep it together. I think the more you bring the state (UNINTEL) together and the more you explain to the people and the faster that you can get it done, the better it will be.

CUOMO: Do you think the president needs to call out the lion? Do you think this takes your wife's uncle, Sen. Kennedy? Do you think he needs to get involved for this to be successful?

SCHWARZENEGGER: Well, the question is if Sen. Kennedy is capable to be out there campaigning because, as you know, he is fighting brain cancer. But I think that he was a very important player to get it as far as it is today. I think that it was Sen. Kennedy who brought continuously the spotlight upon health care reform.

And so I think he's done his share. I think that now the people on Capitol Hill and the president have to pull it off and just, you know, close the deal. But I think it's a very important thing to do for America. I think that well, 100 years from now (UNINTEL) since Teddy Roosevelt who was the first one to talk about universal health care. So I think 100 years later, I think America can manage to do this because we are still the best country and the greatest country and the richest country in the world. So I think we can manage and do that.

CUOMO: Does it get done by August?

SCHWARZENEGGER: I don't know. I mean, you know, I'm not in Washington. I'm out here. All I can tell you is that I hope that this health care reform doesn't put an additional burden on the states, because the last thing we can handle at this point is another burden and another pressure. So we don't have any money for health care reform. I think ultimately it has to come from the federal government.

CUOMO: All right, Governor. Thank you so much. We appreciate what you're going through in California and appreciate your insight into the president.

SCHWARZENEGGER: Thank you very much.