• With: Gov. John Kasich, R-Ohio

    This is a rush transcript from "Your World," April 2, 2012. This copy may not be in its final form and may be updated.

    NEIL CAVUTO, HOST OF "YOUR WORLD": Meanwhile, $800 million in tax cuts already, another billion dollars worth on the way. That doesn’t sound like what is going on with our country, but that is what is going on in Ohio.

    The governor of that fine state with us right now, a state that has added more than 73,000 jobs in just the last year.

    John Kasich, its governor, now with me.

    Governor, obvious you are trying to buck that trend in the Buckeye State and you are getting some results in doing so. But to what end? How long and how low do taxes have to go to encourage businesses that might be in one state to move to your state or to keep operating in your state?

    GOV. JOHN KASICH, R-OHIO: Well, first of all, Neil, we were the number one job creator in America in February and we are now the number four job creator in the last year, and that is coming back from where we almost slipped off the edge of the cliff here, having lost 400,000 jobs in the last four years.

    And we also got our credit upgraded, Neil. While you were covering about everyone being downgraded, S&P and Moody’s has taken us off negative watch and put us to being stable, and our rainy day fund has gone from 89 cents to $240 million.

    It is not just -- it's -- taxes are important, but it's the whole attitude. It's understanding the concerns for job creators. It's having certainty. It is being in a position of where your regulations make sense and it doesn't mean you shouldn’t have any. We will have very tough regulations on hydraulic fracturing. But we need to have them, but they cannot be confusing or they can't be duplicative.

    And we're not doing that. But I also believe that the whole business of incenting small business is important, and I think driving our income tax down which is at 5.9 percent really has to happen. Now, I listened closely to what your last guest said and I love the idea of bringing that money back to America.

    And I have even talked to the administration about it. We have a very big oil and gas administration, our oil and gas investments out here. But they only pay 20 cents on a $110 barrel of oil and nothing on liquid. So we want to modernize our severance tax and use the revenues to lower our income tax, also being able to keep some of the wealth that is generated in this state in Ohio. Our focus is consistency. Our focus is certainty. Our focus is driving every day for lower taxes.

    CAVUTO: But what is interesting, Governor, when we look at the energy picture, very few immediately associate, oh, Ohio an energy player.

    Your point is that you could be a much bigger player if the administration and others went beyond the notion of where the traditional oil and natural gas deposits are and that if we expanded that view of the where the potential is, we would be vastly expanding what type energy is available for us here, right?

    KASICH: Yes.

    Neil, you know, it is interesting. In Ohio we have just introduced what we think is an independent energy policy, clean coal, dig the coal, clean it, and burn it, and try to figure out ways to capture carbon. And we are big believers in natural gas. And we would like to have compressed natural gas vehicles.

    We believe in solar and wind and we believe renewables are important, but we are believe in capturing waste heat, doing co-generation and we also think the fifth fuel is efficiency. Put all those things together and you begin to get yourself in a position of where, and that is what America ought to do, to create independent energy policy.

    (CROSSTALK)

    CAVUTO: But by that you mean that the official public he gives, the president gives, that we have 2 percent of the world's oil reserves you say is way off?

    KASICH: What I'm saying is, is that the ability to now do hydraulic fracturing and capture oil that people never thought existed, tight oil, for example, being able to release this in these reserves has great potential.

    And I told the president -- he is very concerned about the environmental side of this and I said we are getting it right in Ohio and we want to make sure that the well head construction is correct, that passing gas through high-pressure pipelines is going to be safe. And when we do this -- and we are consulting with the feds -- we don't want the feds coming in here and trying to disrupt what we are doing and we think we are getting it right.

    (CROSSTALK)

    CAVUTO: What did he tell you, then, Governor?

    (CROSSTALK)

    KASICH: Well, he is very interested.

    And we have had conversations between our folks here in Ohio and the people that represent -- to the EPA in Washington, telling them about our plans. My sense was is that his response was pretty positive, and you know, he has been more bullish on hydraulic fracturing.

    But we have to make sure we do not sacrifice the environment. We don’t need to. At the same time, we can create a lot of jobs and also give us significant improvement in terms of dependence on foreign sources for energy.

    CAVUTO: I know you were talking about how the environment has dramatically improved in Ohio, and it has, but depending on what polls you believe, the president remains, has actually swung the momentum back in his favor as far as popularity in your state, a lot of other crucial swing states. And we will get into this later in the show, Governor.

    But why would that be the case? Is he then getting the credit for stuff you are doing, vice versa, what? What is going on?

    KASICH: Neil, you know that old Reagan sign on his desk don’t worry about who gets credit, it is amazing what you can do.

    When economies get better, executives get credit for it. The fact is, does he benefit to some degree in Ohio from that? There’s no question that he does. Do I? Yes. Are we responsible for it? From our perspective out here, we have just taken on a lot of tough problems and created a better environment.

    But as you know, Neil, unleashing people to feel secure that when they add jobs or create jobs or when they bring jobs to Ohio, it is because they have a sense of certainty in Washington. They give us headwind. They don't put the wind at our back. They give us a lot of headwind, because sometimes I don't think people in the administration understand risk- taking, investment, the crucial nature of capital.

    We have to keep pushing for that out here. And, Neil, you and I have talked about this for many years. The real change in America is coming from the states up, not from the federal government down. If you are waiting on Washington to fix your problem, you might as well be waiting on Godot.

    CAVUTO: Godot does not get mentioned as a possible running mate. Your name comes up. And maybe it has a lot to do with what you have been doing in Ohio. What do you make of that talk?

    (LAUGHTER)

    KASICH: I think it is funny. First of all, I don’t take it seriously.

    (CROSSTALK)

    CAVUTO: See, I think that was a fake laugh. I think that was a fake laugh right there.

    KASICH: I have -- no, it is not a fake laugh.

    (LAUGHTER)

    KASICH: I think it’s funny.