From iTunes Tax to Caroline Kennedy: Gov. David Paterson's Wild Year

Jan. 6, 2009— -- The governor of New York has a lot on his plate these days.

He's trying to find a way to balance a state budget that's losing $60 million a day, thanks to the financial collapse of Wall Street.

He's under pressure to announce his pick to fill Hillary Clinton's soon-to-be-vacated U.S. Senate seat. And he's about to deliver his first State of the State address to an audience of New Yorkers already rankled by his proposals to tax their iTunes and soda purchases.

But what David Paterson really needed was some time to just listen -- 60 hours, to be exact. That, he said, was the time it would take him to memorize his hour-long speech, which the legally blind governor does by listening to a recording of one minute at a time.

"I can't read the speech. Since I'm not totally blind, I never learned Braille, so I can't read the speech by hand and then recite. So, I basically have to memorize it," he said.

"That's 60 hours I had to invest in this process that I probably could have used … in other areas," he said. "Certainly there are a lot of ways where one's disability limits them from succeeding as well as they might have otherwise. That's what a disability is."

While the process sounds tedious, Paterson seems like a man who relishes taking his time. Case in point -- his deliberate decision not to quickly fill the Senate seat that will open when Clinton is likely confirmed as secretary of state.

"There is a lot of pressure on me to make the decision early," he told "Nightline," acknowledging the widespread interest in who he will appoint.

"There are a lot of reports every day. We have the rumor of the day around here that I have to appoint someone," he said. "I am not going to be coerced. I am not going to be unduly persuaded. And I'm not going to be pushed around."

That pressure has been coming in large part from supporters of Caroline Kennedy, who many have seen as the leading contender for the seat since she publicly announced her interest in it.

One of Kennedy's most vocal allies has been Kevin Sheekey, a key aide to New York City Mayor Michael Bloomberg. Sheekey recently told the New York Daily News that "the idea that we would pass up appointing someone to the Senate who is both a friend and a critical supporter of Barack Obama is political malpractice."

But Paterson insists there are 15 to 20 people that he is considering for the job, including Kennedy, whom he defended against the charge that she lacks government experience.

"I think that that probably applies to a lot of others who have served with a great deal of distinction from New York. And you have to look at the world from my perspective," he said.

"The biggest argument against Sen. Hillary Clinton was that she wasn't even resident of New York when she wanted to run, and hadn't held public office. And now what people say about Hillary is that nobody can take her place," Paterson said. "So the question will be, who will be the selectee that would most make you think of Sen. Hillary Clinton in about eight years?"

Paterson also reiterated his timeline for announcing his choice, saying it would come once Clinton is confirmed by the Senate for her new job. Those confirmation hearings are likely to begin next week.

A New Look at Taxes

In the meantime, Paterson is focusing on his efforts to balance New York's budget, which is $15 billion in the red.

"I don't think that [people] get the number. Fifteen billion --- when you start hearing about $700 billion bailouts, what's $15 billion?" Paterson said. "That's fifteen thousand million. That starts to sound like real money."

And losing real money means making real cuts in the budget, which Paterson admitted has been painful.

"A lot of the programs feel there is too much cutting. And they are right. There is about $9.7 billion of cutting. That's probably three or four times the amount we've ever cut before," he said.

"But no one that exacts the criticism can explain to us how to cut this prohibitive amount of money at this time. So, rather than being upset about the criticism, I'm only disturbed if the criticism is coming from one sector. As long as everybody is equally annoyed with us, I think that we are probably doing the right thing," he said, laughing.

Of course, not everyone is laughing at some of his more unusual approaches to garnering revenue, including new taxes on iTunes downloads and movie tickets.

"If you had told me in August, 'what about these taxes?' I would have said this is ridiculous," he said. "But when your budget deficit goes from $5 billion to $15.4 billion in six months, you're going to have to find some other ways to retrieve money."

And he is very serious about his proposal to tax sugary sodas.

"This idea of taxing sugar in the sodas is very unpopular," he said. "And let me tell you something, if I am the only one standing, I am going to advocate for it. Because when parents find out the relationship between their children's eating choices and these horrible diseases, like type II diabetes and high blood pressure and high cholesterol that they receive, they're going to come looking for the government officials that didn't act at this time.

"The same way that people wanted to know why no one stopped the advertising of smoking for years when it was clearly linked to cancer. And when that day comes, my conscience will be clear."

Despite the dire budget situation, Paterson has not proposed increasing taxes on the wealthiest New Yorkers -- at least not yet.

"I'm not ruling out taxing the wealthy," he said. "In 2003 we taxed the wealthy and I was in favor of it."

A 'Very Vital Cog'

Paterson noted that leaders don't yet know the full extent of the economic crisis.

"We don't know where it's going to end," he said. "We have not hit the bottom yet."

Paterson, who was elevated from lieutenant governor to governor after the unexpected resignation of Eliot Spitzer, admitted that the job will be more enjoyable once the economy swings back. He said he recognized the gravity of the budget situation in July.

"I think that that was the moment that I realized that we have to tell New Yorkers the truth about the challenges that face us," he said. "And because I was able to do that, it has empowered me, I think, to realize that I can be a very vital cog in what will have to be a collective effort to ameliorate this crisis."

And while the governor battles with the budget, the political world waits with bated breath to see what this suddenly "very vital cog" will do with that open Senate seat, an inquiry so common these days that Paterson has taken to deflecting it with a favorite sports analogy

"There's an old baseball umpire. His name was Bill Klem," Paterson said. "And once there was a pitch, and he didn't say anything. And the batter and the catcher looked at him and said, 'Well, what is it?' And he said what I'm saying: 'It ain't nothin' until I call it.'"