This is a partial transcript from "Your World with Neil Cavuto," February 9, 2006, that was edited for clarity.

NEIL CAVUTO, HOST: Targeting the Terminator.

Governor Arnold Schwarzenegger is up for reelection this year, but the word is, he's out of campaign cash, after promoting those failed ballot initiatives last November — good news for my next guest.

He is one of two Democrats looking to unseat the governor.

From Sacramento is Phil Angelides. He is California's state treasurer.

Good to have you, sir.

PHIL ANGELIDES, CALIFORNIA GUBERNATORIAL CANDIDATE: Good to be with you. It's good to be with you. And welcome to the Golden State.

CAVUTO: It's a beautiful state. Thank you very much.

How do things look right now?

ANGELIDES: Well, look, this is going to be a long, hard campaign. I'm running against Arnold Schwarzenegger, who is one of the most known figures in the world.

But, look, Neil, I believe Californians are ready for a change. They showed it in the special election last year, when they roundly defeated all the governor's initiatives. And I believe people want a new governor. They want a governor who will stand up for working people, small-business people, for students. They want a governor who will do more than just photo-ops, a governor who will actually do the hard work of governing.

And I'm very optimistic that I will be the next governor of California. It will be a full-throated debate, though, about the future of this state.

CAVUTO: All right.

But, of course, I don't want to disparage all Californians, but they appear a tad fickle. I mean, they threw the last guy out. They love this guy, and now they hate this guy. I don't get it. What's going on?

ANGELIDES: Well, look, I believe there is a hunger for real leadership.

And the fact is that, under, you know, this governor, he promised to balance the budget. We're facing a $6 billion budget deficit next year. He promised to improve our schools. And we're 43rd out of 50 states in educational spending, 48th out of 50 states in educational achievement, 40th out of 50 states in the number of young people who go directly from high school to college.

Traffic congestion is worse. Californians really want a governor who will roll up his or her sleeves and do the hard work of governing, and really come down on the side of ordinary working Californians, who don't want a handout. They want a hand up. They want their kids to go to good schools.

CAVUTO: Well, are you saying, Phil...

ANGELIDES: They want their kids to have a chance to go to college.

CAVUTO: Wait a minute. I can understand the education and all that other stuff.

ANGELIDES: Sure.

CAVUTO: But you're blaming the traffic congestion on him, too?

ANGELIDES: Well, here is what I'm really saying, Neil.

This governor came in with immense political capital, an immense opportunity, and he squandered it. Two-and-a-half years later, he has not made measurable progress of any sort of education, on expanding the number of kids going to college, and, until this month, never did anything to try to even address the growing traffic congestion in the state of California.

So, I'm saying that, after two-and-a-half years, Californians have looked at this governor and said he has not really fulfilled his promise, hasn't lived up to their expectations, hasn't tried to do the hard work of governing.

You know, Neil, in the face of all our problems, schools, college access, transportation, this governor called a special election that no Californians wanted. He wasted a full year in a political bloodbath that moved us backward, not upward and forward.

CAVUTO: All right.

But you can argue that that traffic congestion, whatever you want to call it, is a result of more Californians working. Under his stewardship, the California economy has fairly improved, and unemployment has gone down, right?

ANGELIDES: Well, the economy has been moving up nationally, and California hasn't been moving up at any faster pace.

But here's the truth, Neil. Traffic congestion is worse, because, in the governor's first two budgets, he — quote, unquote — "borrowed" or took all the money slated for transportation projects. So, there has been a dead halt to transportation projects in this state, in large part because the governor hasn't balanced the budget, and he keeps borrowing, borrowing, borrowing, taking from transportation, taking from education, selling bonds that our kids will have to pay, because he is borrowing against the future.

CAVUTO: OK.

ANGELIDES: So, he has contributed to this problem.

CAVUTO: All righty, Phil, thank you very much — Phil Angelides.

ANGELIDES: Great to be with you.

CAVUTO: We tried to get Governor Schwarzenegger and he could not do us today.

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