This is a partial transcript from On the Record with Greta Van Susteren, August 27, 2003. Watch On the Record  weeknights at 10 p.m. ET.

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GOV. GRAY DAVIS, D-CALIF.: I'm not into the speculation business. I'm focusing on question No. 1, which is whether to recall the governor. And obviously, I think it's a bad idea and I think it's bad for California (search).

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GRETA VAN SUSTEREN, HOST: California governor Gray Davis, under fire for his handling of state finances, is fighting for his job tonight. Joining us from Los Angeles is California's first lady, Sharon Davis.

Welcome Mrs. Davis.

SHARON DAVIS, CALIFORNIA'S FIRST LADY: It's great to be with you, Greta.

VAN SUSTEREN: All right, Mrs. Davis, how come the governor finds himself subject of a recall?

DAVIS: Well, it's very interesting. This recall started just 30 days after he took the oath of office. He obviously didn't have any time to do anything that would have caused it. But the Republican consultants behind this didn't like the outcome of the election, and now they're trying to undo the outcome of the election.

VAN SUSTEREN: Well, what's wrong with the finances in the state of California? Out East, we hear you've got these huge deficits, that the place is a mess. How come? Who's responsible? And any idea how to fix it?

DAVIS: Well, Greta, there was a deficit (search) in California, just like there was in 46 other states, and also like the federal government. But in California, we have a balanced budget this year. We have about an $8 billion problem going forward in the next year. But they're already starting to work on that.

VAN SUSTEREN: All right, Mrs. Davis, you got something new. You got a weblog, a blog, as it's also called. What are you doing with a weblog?

DAVIS: Well, I'm getting a chance to talk about what's happening on the campaign, different things that I have seen along the way, and I'm kind of enjoying it. I do it while I'm traveling. I have a little Blackberry. I enter all the information and write my own blogs, send them in and edit them up.

VAN SUSTEREN: All right. Well, you've got my heart with the Blackberry, sending them in. I got to admit, I'm a little hooked on mine, as well.

Let's talk about the lieutenant governor. Any hard feelings about the lieutenant governor entering the race?

DAVIS: No. The most important thing in this race, as far as we're concerned, is defeating the recall. And that is a stand that the lieutenant governor has taken, as well as every other Democratic elected official in the state.

VAN SUSTEREN: In the event that there is a recall of the governor, are you going to vote for Bustamante?

DAVIS: Well, we're focused just on the first half of the ticket. We're not running against Cruz. We're running on the first half of the ticket that says, Should the governor be retained in office? And that's a no vote. You want to make sure that the voters know that because it's very confusing for most voters.

I want to get back to the top of your story. You mentioned that California was in difficult finances. But I wanted to point out where the funds went to. They went mainly for education. When my husband was elected, we were at the absolute bottom in per-pupil spending, and we've improved spending, put in reforms. Now test scores are up five years in a row. We also invested heavily in public safety, building crime labs so that they could do DNA testing and solve crimes sooner in California. And then also invested heavily in health care for children.

So those were investments that the voters wanted, and they're the types of things that Republicans, if they want to cut the budget, they're going to have to be cutting. And we'd like to know exactly where they're going to cut.

VAN SUSTEREN: All right, on a personal note. How hard is this for you?

DAVIS: Well, it's very difficult because this recall is not only unjust, un-democratic, but it's mean-spirited. It's about overturning the outcome of an election that just occurred last November, in which eight million people participated in an election. And now the Republicans want another bite at the apple.

VAN SUSTEREN: All right, let's assume worst-case scenario for the governor, that he is recalled. He's not eligible then for the vote. He's not on the second part of the ballot.

DAVIS: That's correct.

VAN SUSTEREN: And many people think it's Lieutenant Governor Bustamante versus Arnold Schwarzenegger. Why shouldn't someone vote for Arnold Schwarzenegger?

DAVIS: Well, I think the voters want to know specifically what you're going to do, and it seems he's been somewhat vague on his plans. And normally, when you're going to run for governor, you would spend at least a good year to figure out what's going on in this state, what the challenges are and understand all the issues. This recall came up so quickly, he didn't have the time to study the issues. Now he's learning about the issues.

But I think the voters are going to want to know, What are you going to do on the issues that are important to them, on education, on protecting the environment, on continuing to have sensible gun laws to protect our citizens, and to make sure that we can continue to move this state forward. He's talked a lot about creating jobs, but this is a governor that has actually created jobs -- three million jobs lost nationwide, but California, while my husband was governor, he's had an 800,000 job gain.

VAN SUSTEREN: All right, let's talk about advice your husband is getting. Is it true that former president Clinton has been one of his advisers, giving advice on how to deal with this recall?

DAVIS: President Clinton and Hillary are very good friends. We talk with them regularly, and they've given us a lot of advice. I think even people that don't agree with Clinton will tell you he's a great communicator. He's able to communicate in a way that lets people know what you want to accomplish. And he's been working with my husband in that regard.

VAN SUSTEREN: All right. Well, we're going to be watching. The whole nation's watching this one.

DAVIS: You're right. The whole country's watching.

VAN SUSTEREN: Thanks very much for joining us.

DAVIS: It was great to be with you.

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