This is a partial transcript from Your World with Neil Cavuto, October 8, 2003, that was edited for clarity.

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

NEIL CAVUTO, HOST: Arnold Schwarzenegger has vowed not to raise taxes on Californians, but will he be able to keep that promise?

Julie Meier Wright says, yes, he will. She is a member of Arnold’s Economic Recovery Board, former trade secretary of California, the president and CEO of the San Diego Economic Development Corporation.

But Steve Westly is not so sure. He is California’s state Controller.

Steve, end with you, begin with you. Do you think he’s got an uphill fight?

STEVE WESTLY, CALIFORNIA STATE CONTROLLER: Well, I think it’s going to be very tough for the new governor, and, let’s be honest, no one wants to see new taxes, especially in California.

But when you’re talking about an $8-billion budget deficit and if the governor goes ahead and rescinds the vehicle license fee, he is going to be looking at a huge hole to fill.

I will certainly help him do anything he can to fill it, but, realistically, he is going to have his hands full.

CAVUTO: All right. Julie, that vehicle license fee which tripled the earlier fees is a $4-billion price tag. You remove that. That’s an extra $4 billion you have to come up with. Is he in a box?

JULIE MEIER WRIGHT, SAN DIEGO ECONOMIC DEVELOPMENT CORP. CEO: Well, I think you look at the growth in state spending over the last five years of nearly 40 percent, and you can see that we need to get inside programs and understand what we can cut.

One of the members of his counsel of Council of Economic Advisers says that when he acquires a company, something he does very successfully, he goes in line by line and understands every element of spending in the company so that he can make prudent decisions about what to cut.

We need to do that in a highly compressed timeframe, and, frankly, it is going to take the active support of people like my friend, Steve Westly, to make it happen.

CAVUTO: Steve Westly, the dirty little secret about the governor in your state is that he doesn’t have a lot of power in your state. He has a big bully pulpit but very little beyond that. So what realistically can Governor Schwarzenegger do?

WESTLY: Well, I think the first thing he’s going to have to do is to reach across party lines and form some sort of consideration with the Democrats who control both houses of the legislature. One of the things the governor did...

CAVUTO: Well, they hate him, right? They hate him.

WESTLY: Well, I wouldn’t go that far. Some do. I think some are eager to work with him.

But what people need remember is that Gray Davis already stopped ongoing growth in government. He’s called for a 16-percent across-the-board cut in government. That’s already been factored in. We still have an $8-billion hole on top of that.

So all of us, including myself, are very eager to see where the governor-elect is going to go to for these cuts. Again, I will help him any way I can because every Californian should want him to be successful, but he sure...

CAVUTO: But will you really, Steve? I mean, the fact is, Controller, you’re getting great political buzz yourself. Many say you’re a future governor. Is it really in your interests to help him that much? I mean jaded political soul that I am, I wonder.

WESTLY: Well, that’s only because I get on the Neil Cavuto show so often. But no, let’s be honest here. I think all of us in California are glad the recall is over. It’s time to roll up the sleeves. We have to solve these problems as Californians. I want to see the governor be successful, and I plan to help him do just that.

CAVUTO: Julie, do you think ultimately this governor’s going to be forced to raise taxes.

WRIGHT: I think his first priority has to be an intense focus on spending cuts. I would give you two things that I think are very important for us to consider.

Number one is, if you look at federal welfare reform, we got inside that program, and that is how we made dramatic shifts in the cost of that program. We’re going to have to do that with the 75 percent of the state budget that’s case-load driven and help welfare, corrections, and education.

In addition to that, we have a whole series of non-budget things that we need do to fuel the growth of the private sector in California so that we have revenues for the needed programs of government, and that’s like workers’ company.

CAVUTO: All right. Julie Meier Wright, I want to thank you. Controller Steve Westly.

Thank you, both, very much. Appreciate it.

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