• This is a partial transcript from "Your World with Neil Cavuto", March 11, 2004, that was edited for clarity.

    Watch "Your World w/Cavuto" weekdays at 4 p.m. and 1 a.m. ET.

    NEIL CAVUTO, HOST: In little more than four months on the job, Gov. Arnold Schwarzenegger (search) is on a tear. He rammed through a referendum to help bail the biggest state in the country out of the biggest fiscal mess in the country. Not bad for an actor who was thought to be in over his head.

    That's what they were thinking then. They're not saying that now.

    So don't discount the guy when he's going after employers in this state to start hiring more workers in this state.

    The governor telling me exclusively just minutes ago, he's got a plan to do just that.


    Governor, welcome to Fox.

    GOV. ARNOLD SCHWARZENEGGER, CALIFORNIA: Well, thank you. It's nice to be here.

    CAVUTO: Let me ask you. Jobs (search), big issue for you. The question is how we get them back to California.

    SCHWARZENEGGER: Well, I think that the most important thing that the government has the responsibility to create a positive atmosphere so that businesses can really bloom and the economy can bloom. And that brings the jobs back. So the government really has to sit back and not create obstacles.

    And also, it has the responsibility to reduce the cost of doing business here. Like, for instance, in California the costs have been very high for business. And since there are a lot of businesses have left, especially when it comes to workers compensation costs, high unemployment insurance costs, higher energy costs and so on.

    So what we're doing, for instance, right now is we're in the middle of negotiating workers' compensation to really create reform to lower those costs so business can come back again. Very important to create a good, positive environment, deregulate some of it, and make it cheaper to do business here.

    CAVUTO: The problem is more systemic, is it not, Governor? There's a big concern that technology jobs, which used to be the money leader in California, a lot of those jobs are going. That 775,000 of them in this country, just technology, since 2001. A fifth of those in California. How do you entice them back? The Packard people, Cisco, are going to India.

    SCHWARZENEGGER: Well, I actually had a meeting with Silicon Valley, which has been the second time since I was elected. And I'm in close contact with all the leaders, with the CEOs of all of those companies.

    And I have them sort of coming up to Sacramento, and we have, you know, all the Democratic and Republican leaders sitting down with them to see the things that we can do.

    There's a lot of things we can do for them. If you get all of the jobs back it's really not the question. The question is how can you create a positive atmosphere, that we can sell it by shop (ph), get jobs back. And those will create new businesses.

    The new businesses end up in the United States and all over the world every day. How can we bring those businesses here? This is why I'm starting a commission today. And they will be in charge of really bringing jobs back and bringing our economy back.

    CAVUTO: High tech CEOs, Governor, say, you know, if you talk to the governor, remind them of a couple of things. What's to stop me from outsourcing jobs when I can hire workers to answer telephones in India for a tenth the price I pay them in the United States?

    With all due respect, Mr. Governor, then that is compelling enough for me to say India.

    SCHWARZENEGGER: Look, there's some shops that will always go overseas. That's just the way it is because we are now a global economy, and people do business all over the world.

    But that is not an excuse. We cannot just use that number, that 11 percent went to India with their services. The fact of the matter is that California, we have a terrible business climate. And what we have to do is we have to strip down the obstacles. We have a lot of self-inflicted wounds in this state, and we maybe we have to do is some limited (UNINTELLIGIBLE) so that businesses can come back.

    Look, I know about the businesses that went to Nevada. During the campaign when I ran for governor, I visited those businesses. They packed up and they left for Nevada because they said, "Look, I cannot afford to do business here." Their workers' comp costs were $300,000. This year they're $800,000. You're cutting away the profits and they cannot remain competitive.

    Agricultural businesses and industries are suffering because of the high workers' comp costs. But they cannot pack up their farms and move to another state. They're stuck here.

    So really, you have to protect those businesses and do something preventative, rather than just always beating up on them and making it difficult for them to do business. What I promised in my campaign was always that we have to start and create a positive environment here. This is why I'm creating, also, this commission now.


    CAVUTO: ... bad now because they're hiring people abroad.

    SCHWARZENEGGER: That's not the point. We're trying to become better at this, and we have to just put our best foot forward and really make it clear, make the profits better for businesses to do business here.

    There will always be some businesses that will go to Germany or to Africa or to China or to Taiwan and all those places, but we should create a good business environment here.

    CAVUTO: Let me ask you, Mr. Governor, your biggest success has been the $15 billion bond referendum. Now you're going to have some money (ph) here. But many of your critics have been saying, including Fresno Mayor Alan Autry, with this Proposition 57, we've sent those spending addicts the biggest fix they've ever had, and I hope the state of California doesn't O.D.

    What do you say to those who say you're just borrowing time?

    SCHWARZENEGGER: Well, first of all, I never pay any attention to those critics. Because I was elected. I have put forward certain proposals when I was running for governor, and people voted for me to go to Sacramento to create action, not the dialogue.

    All those people that are criticizing, all those people that are making those comments and that the critics, have been around for a long time and they didn't help to bring our economy back.

    So now I'm the new sheriff on the block. I'm in Sacramento. And I will create a positive business environment, and I will change our financial equation, our fiscal crisis that we are in and step with that move forward.

    Is it the answer? The $15 billion bond? No. But we have to do 10 different things. But it is one step in the right direction to get us out of the hole. That's all we said, this is the first step to get us out of the hole, because we have such a huge debt.

    I've inherited a $22 billion debt. We have to deal with that. We cannot keep looking away and shoving it down to the back, which they have done for the last five years. What I do is I bring it back to the daylight. I say, here is the problem. For instance, there's a $22 billion debt, and we have to deal with it.

    And I'm going to go directly to the people, and I'm going to ask the people to help me. Because they should take some action at the polls, and they should be part of the decision making process. And they are. The people are very smart in California. They know what's going on.

    And this is why I'm very happy now and very thankful that they trust in me. They trust in me, and they will help me with those decisions.

    CAVUTO: How much of the success you've had do you think is owed to your celebrity?

    SCHWARZENEGGER: Well, you know, I really don't care. That's not the bottom line. The bottom line is to get the job done. You don't want to (UNINTELLIGIBLE) because it was because you liked my name, was it because you liked my movies or because they think it's a good idea.