• With: Gov. John Kasich, R-Ohio

    This is a rush transcript from "Your World," December 10, 2014. This copy may not be in its final form and may be updated.

    NEIL CAVUTO, HOST: All right, that $1.1 trillion spending bill, well, this governor says, try something new and just pay the bills, rather than create new bills.

    Republican Ohio Governor John Kasich telling me just moments ago it is time to put Washington on notice.

    (BEGIN VIDEOTAPE)

    GOV. JOHN KASICH, R-OHIO: What I saw, it's like $1.1 trillion. And I was thinking, I don't even know how you put those numbers together, right?

    CAVUTO: Incredible.

    KASICH: But, you know, look, I have felt from when I was very young, and even stronger now than before, that you have got to put something into place to force them to make choices and balance the budget.

    This is the most important thing in the country, because if you don't have a financial foundation that's solid, everything else becomes so secondary.

    So, look, I was a member of the state Senate. I was 18 years in the Congress. And now I'm governor. And I can tell you, Neil, that if we didn't have a balanced budget requirement in Ohio, we'd still be in the hole. So you have to force the legislators to make choices. And without a requirement, they're mostly unlikely to do it.

    CAVUTO: Yes, I think 46 governors have that requirement. And you do as well. But -- so you have to deliver the goods.

    Many say that you can't apply that to Washington, because very different standards, much bigger ball game. What do you say to that?

    KASICH: Well, I was the chairman of the Budget Committee that actually got the budget balanced at one moment in time.

    And -- but I don't think we should leave it to just a handful of people. It ought to become a permanent requirement. You can make exceptions for war. You can make exceptions for, you know, fiscal calamity. You can do all that.

    But when, year in and year out, we're unable to make choices, politicians, whether they're Republican or Democrat, it's just sort of part of being one is that you spend money. And, Neil, this is like -- look at Germany. Germany has a balanced budget requirement, and the rest of Europe is complaining that they're fiscally responsible. And Germany's economy is booming and the rest of them are struggling.

    Even Italy passed a balanced budget requirement. So you can fashion this with circuit breakers so that it makes sense. But, Neil, look, I can't think of anything more important that we talk about than having sound finances -- finances for the United States of America. And we don't have them today.

    CAVUTO: But do you think, Governor, the problem is a lot of people saying, oh, these doom-and-gloomers, you're talking about the deficit and the debt, that we have been whistling past the graveyard, because they say, well, it hasn't impacted us.

    And when I try to explain to a lot of folks that we are increasingly paying such a huge chunk of our budget just on interest payments to the debt just to keep our head above water and liken it to what it would be like a visa bill and being -- families being strapped paying just the minimum to get by, it still falls on deaf ears.

    What are Republicans not doing? Because Democrats say Republicans talk a good game; on the federal level, though, they don't deliver. What do you say?

    KASICH: Well, first of all, this ought to be an issue that unites Republicans and Democrats.

    I mean, I will bet the approval for it is stratospheric. And if we can get two or three or four more states to get closer to calling for a convention, all of a sudden, the eyes of the world are going to be on this. And they will have...

    (CROSSTALK)

    CAVUTO: Oh, no, no, I agree. But, Governor, what I'm saying is that everyone's for it in the whole, but until you get to the pieces that affect that.

    KASICH: Yes.

    But, Neil, that's where -- that's the problem. If you do not force them to do it, they will always punt it down the street. That's what's sort of natural to politicians. Here's the other thing, Neil. We spend a lot of time talking about income inequality. You think about this economic growth we have had post-recession, post-disaster -- economic disaster there.

    It's been weak. And if you really want to grow a strong economy, you have got to have some essentials. Take Ohio. When I came in, we had an $8 billion hole. We lost 350,000 jobs. Now we have a structurally balanced budget, and there's so many other things we can do. And we're up over a quarter-of-a-million jobs.

    If you do not have a strong financial foundation, whether you are a business, whether you are a family, or whether you are the government, things just don't work very well. And so the first step to trying to help all Americans to rise and have more opportunity is to get their budget balanced and be fiscally responsible and accountable.

    And, by the way, Neil, I'm convinced that you can produce much better products for the American people through the government at lower prices if you are forced to think outside of the box and aggressively. The problem with government, where's the bottom line? Business, if you don't do it, you go under.

    (CROSSTALK)

    CAVUTO: Well, yes, there is no accountability. You're right.

    But one thing the president has already postured since the midterms, Governor, is that he's obviously not changing his stance. He's not changing his strategy when it comes to more spending.

    A great deal more has been announced, I think better than $800 billion worth for just the next couple of years. Now, I guess the question comes back to this dare that he recently had for Republicans. You don't like my immigration plan, come up with one of your own, but you don't have the guts to remove what I offered, which is akin to what he has said about his health care plan on "Stephen Colbert," that it was easy for Republicans to pick apart, but they wouldn't dare come up with one of their own because they can't.

    What do you make of that dare, that the Republican Party lacks the guts to do what I guess the president is saying he is doing?

    KASICH: You know, first of all, I think it's a good dare.

    Secondly, I can remember, Neil -- Newt Gingrich and I were talking about this the other day. When Bill Clinton offered his tax increase, and he said, if you don't like what we have, offer your own. And so we did. But in the conference of the Republican Party, we had a meeting to figure out whether we should offer our own or just attack his.

    And there were 33 speakers, I think, and 31 of them said we should not have a plan, we should just attack him. And I walked to the back of the room. I said Newt, how do you think we're doing? He said, I think we're doing great. We actually have two people on our side.

    (LAUGHTER)

    KASICH: It's just kind of natural for Republicans to just not want to put something out there.

    But the most robust and exciting political operation is one that's full of ideas. So, look, we could have good alternatives to Clinton's health care plan. I have no doubt about it. We can have great alternatives and we can have a great plan on immigration. We can't go burying our head in the ground on immigration.

    We can't bury our head in the ground on race.