This is a rush transcript from "Your World With Neil Cavuto," January 26, 2010. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: Shot down before he even gets a chance to pipe up.

Welcome, everybody. I'm Neil Cavuto.

And nevermind Scott Brown got elected senator railing against spending, Senators he will soon be joining today slapping down a task force to get a handle on the spending, mixing a measure that would have allowed Congress to punt on tough deficit-busting decisions, and instead let a group of select academics and lawmakers and Obama administration officials offer some recommendations, and this just a day before the president plans to present a freeze on federal spending in his State of the Union address tomorrow. We will be in Washington for that. But it's a freeze with very much big exceptions, like Social Security and Medicare. Does it sound weird?

Well, it does to Meg Whitman as well. The former eBay boss says she knows a thing or two about scoring some good deals, and, for taxpayers, these ain't good deals, which is she's running for California governor and now has a new book that pretty much states her case, "The Power of Many: Values For Success in Business and in Life." Meg, good to see you.

MEG WHITMAN,R-CALIF. GUBERNATORIAL CANDIDATE: Nice to see you. Thanks for having me.

CAVUTO: So, you can't pick and choose across-the-board cuts, I guess, right? They have to be across-the-board?

WHITMAN: Yes, I think they have to be across-the-board. We have an enormous deficit. And you have got to look at every single department, every single line item in order to get this back into shape. And I think that would be pretty self-evident.

CAVUTO: What did you think — and it was a lot of Republicans who rejected the idea of this commission. And it was a bit of a shell game here, but at least it would have absolved them of any onus in coming down with ideas, right?

WHITMAN: Yes, but I think the American people want Congress to be accountable. They want the president to be accountable.

CAVUTO: But they're not.

WHITMAN: And I think we have got to find a way for the president and Congress to lead on getting the costs down at the federal government.

Here's some bad news. We have a government we can no longer afford and we better face up to the reality and we better start trying to figure out how we are going to get it back line with what we can afford.

CAVUTO: You apply a lot of these businesswoman principle. We should just state, for the people who don't you, you're the highest paid female CEO in history. So, you stand out in that regard. I know you don't like that, but it's attached to you. It's quite a success.

But you point out in your book the largest point is this. Don't just know the cost of everything. Analyze the value of everything. You extend it to government obviously here. And we're not looking at that, right?

WHITMAN: Correct.

CAVUTO: We're just leaving large blocks off the table and we're not getting anywhere.

WHITMAN: And it doesn't make any sense to do that, right?

There is so much bureaucracy. There have programs that have been layered upon program after program. No one is looking at a return on investment. No one is looking at why are we spending this money.

And I was interested to see an article the other day you probably read that the current administration has the smallest percentage of people who have worked in business of any administration in the last 20 years.

CAVUTO: Well, the whole — if you think about the whole economic team, they really don't have any...

(CROSSTALK)

WHITMAN: Right.

CAVUTO: They're academics. I don't know...

WHITMAN: And if you have never met a payroll and you have never — you don't understand the conditions that are required to create jobs, I think it is a huge issue.

And it's not the government's job to actually create the jobs. It's the government's job to create the conditions that small businesses and entrepreneurs can grow and thrive in. So, let's focus.

If I was the president, I would be focusing on deficit reduction, obviously getting spending under control, but I would be focusing on jobs, which, as I travel around California, that seems to be the number-one issue.

CAVUTO: Now, you had said early on, Meg, that this multi-approach that the administration took was just — whatever value there was in addressing health care just was muddied in just this blitzkrieg of programs, right? What would you have done?

WHITMAN: Well, I'm a big believer in focus, especially given the times in which we live and how complicated things have become.

Let's do three things at 100 percent, as opposed to try to 10 things at 50 percent. And in California, what I want to focus is on creating and keeping jobs in California, cutting government spending, not reducing the rate of increase, actually cutting government spending.

(CROSSTALK)

CAVUTO: Every governor that comes in says that. If you were so fortunate to get in, I'm sure you would want to stick to that. But time and again, Republican and Democrat, they all said it. They can't do it.

WHITMAN: Yes, but we have to do it this time.

CAVUTO: Well, I know that. You have to do it nationally, but we don't.

(CROSSTALK)

WHITMAN: Well, but we're going to have to, because...

(CROSSTALK)

CAVUTO: Look at what we did today. We have got to get this under control. The president proposes this spending, leaves huge swathes of entitlement programs off.

(CROSSTALK)

WHITMAN: In California — and I can't speak as well for the country - - but, in California, this is all about leadership, creating a clear vision of what we're going to do, a clear focus area, and getting people to focus on three things. And if you are off doing lots of different things — and I will tell you firsthand, in politics, the gravitational pull to try to please everyone is enormous. And you have just to have discipline and leadership, saying, these are the three things we're going to get done, and then you have got to lead through it.

And you're going to have to work with the Democrats. There's no question about it. But I think there's common ground that we can find that we have not yet found.

CAVUTO: But what is this Scott Brown message? A lot of people say he got in there because there was this anti-spending wave, more to the point, this anti-health care spending wave. Obviously, you hope to see that rage or whatever benefit in California. You're leading in the Republican race. You still trail the likely Democratic victor, Jerry Brown, the former governor, I think by 10, 12 points, which isn't bad, which isn't bad.

WHITMAN: Yes, about 10 points.

CAVUTO: Scott Brown was trailing by 30...

(CROSSTALK)

WHITMAN: Yes, we were trailing 20 points two months ago. So, we are coming up.

CAVUTO: But how do you capitalize on that? You're not a rage candidate. You're not a shouting populist.

WHITMAN: I am not a career politician. I'm a business person, that what I have delivered over the years in my career is results. I know how to fix things. I know how to lead.

And I will tell you, I think this is very, very important. And I think what Scott Brown showed — and it was an earthquake — it was just remarkable, what happened — is that, yes, to some degree I think it was about health care. He, I'm going to be 41st senator to vote against health care.

But I think people don't like the process. They didn't like what happened with the Nebraska compromise. They didn't like the Louisiana purchase. And they...

CAVUTO: But will they forget it by November?

WHITMAN: I don't think so.

CAVUTO: Really?

WHITMAN: Because I think people have had it. I see it every day on the campaign trail.

CAVUTO: But you are worried, as a billionaire yourself, that they have had it fairly or not, with rich people? I get it all the time. And you hear.

WHITMAN: Yes.

CAVUTO: We cover all these speeches of the president. The fat cats, the banks. He's really talking about them. He's not talking about Internet sensations like you.

WHITMAN: Sure. Sure.

CAVUTO: But it more or less is sort of disparaging wealth and success.

WHITMAN: Yes.

You know what I think? All Americans, they want an opportunity to be successful. They don't begrudge other people's success if they feel like they have a chance at success. And I think what's happened is, people don't feel like the government is working for them, that it's a problem.

And you know what? If we can create the conditions for small businesses to grow and thrive, then I people will feel a lot better about their opportunities, and they have got to feel that the process is working in Washington. And it's clearly not.

CAVUTO: We have kidded about this before, Meg, but would you ever use your eBay background to just take this stuff that's on the state and just auction it off?

(LAUGHTER)

WHITMAN: Yes.

You know, there's lot of surplus...

(CROSSTALK)

CAVUTO: How much would the Golden Gate Bridge get?

WHITMAN: Yes. Well, the Golden Gate Bridge is priceless.

(LAUGHTER)

CAVUTO: No bidders.

WHITMAN: But there are surplus materials of course that could be sold on eBay.

But it speaks to a broader point, which is where we started this conversation. We have got to go every agency, every department and say, do we still need this program? Can we use technology to do more with less?

What is fascinating about California, for the most technologically advanced state, you know, home to eBay and Yahoo! and Google, the state government is running on technology that's 20 years old. And...

(CROSSTALK)

CAVUTO: Nevertheless, it's still — and attack the fat cats, but when it's convenient on — for certainly this administration.

This is Robert Gibbs earlier today on this sort of weird juxtaposition on the Wall Street thing. Let's listen to this.

(BEGIN VIDEO CLIP)

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: We have to pay the bills for what we've spent already.

QUESTION: But that's a lot more than you're going to need in one year.

GIBBS: But I think to send certainty to the market that the government isn't about to default on the money that it spent is part of what — what that's about.

(END VIDEO CLIP)

CAVUTO: You know what struck me about that, Meg? Now they care about the market.

WHITMAN: Yes, I know, I know.

(CROSSTALK)

CAVUTO: So, what did you think of that?

WHITMAN: So, I don't think that we ought to increase the debt ceiling. We need to get our fiscal house in order. And what this will allow is to kick the can down the road, as opposed to get the fiscal house in order.

And I read a number of months ago we have taken — at the federal level, we have found the low-hanging fruit.

I don't believe that. There has got to be billions and billions of dollars of cost savings by deploying technology, by consolidating the number of people who work at the federal level, just in California. And until we are convinced we have done every single thing we can to get spending down, I don't think it makes sense to increase the debt ceiling, because it takes people off the hook.

CAVUTO: Yes, but, nationally, we have to address these entitlement program. And even when President Bush tried to do that, his own party turned on him.

WHITMAN: Yes.

CAVUTO: It was the third rail, and they said, no, don't touch this one.

WHITMAN: You know, but I think times have really changed. We can no longer push off that day of reckoning.

(CROSSTALK)

CAVUTO: Well, we just did.

WHITMAN: I know, but it's the wrong thing.

(CROSSTALK)

CAVUTO: So, you would lecture Republicans as well?

WHITMAN: I would. You have got to look at everything. And there are big cost buckets. You have got to go after those and try to do more with less. That's what business does every year: How do we do more with less?

CAVUTO: But you're trying to work this nerdy thing in your favor, which is no offense. You have got built a career over it.

(LAUGHTER)

CAVUTO: But it always reminded me, and then you repeat it against in your book, the great fortune exchange, you know, talking about yourself, she's frumpy, but she delivers.

I don't think you're frumpy.

WHITMAN: Well, thank you for that.

(LAUGHTER)

CAVUTO: What do you make of that, that that is an image that you have kind of treasured?

WHITMAN: Well, as I said, I'm a big believer in focus on a lot of things. And when I was at eBay, the great news is, we had a dress code of blue jeans and button-down shirts. And I focused on delivering the results.

CAVUTO: But you relish frumpiness. And, like I say, you're not frumpy.

(LAUGHTER)

CAVUTO: Then you have someone like Sarah Palin on the national stage, who is not frumpy. But you don't mention her in your book.

WHITMAN: I talk a lot about John McCain, obviously.

CAVUTO: Yes, you do.

WHITMAN: I talk a lot about Mitt Romney.

CAVUTO: I know.

(CROSSTALK)

CAVUTO: And that's why I thought, boy, missing that one was a biggie. WHITMAN: Well, Sarah Palin I think did a remarkable job, having been dropped into a very difficult situation.

(CROSSTALK)

CAVUTO: Do you think she was in over her head?

WHITMAN: Well, my choice would have been Mitt Romney as vice president, because even though,...

(CROSSTALK)

CAVUTO: Do you think she could be president?

WHITMAN: You know, that's going to be for the American people to decide.

CAVUTO: You don't think so, do you?

WHITMAN: You know, it's for the American people to decide.

(LAUGHTER)

WHITMAN: Fortunately, there's lots of people who I think are going to run for president. Maybe my friend Mitt will again. And that is what is great about America, is people get a chance to decide.

CAVUTO: But you weren't making any bigger statement on her and the message she sends to women or anything like that, right?

WHITMAN: I wasn't, no, no, no. My frumpy comment was many years ago.

(CROSSTALK)

WHITMAN: But I think the most important thing...

CAVUTO: There's nothing frumpy about this cover.

(LAUGHTER)

(CROSSTALK)

CAVUTO: Nothing frumpy about...

(CROSSTALK)

WHITMAN: Oh, thank you.

I was just going to say, in business and in life, in the end, what's the most important thing? You deliver the results. You get it done. And the people of California are crying for the California state government to get it done. They don't want all the details. They just want someone to go up there and fix it. And I think that's what I can help try to do.

CAVUTO: How do you and Schwarzenegger get along?

WHITMAN: I know him.

CAVUTO: Yes.

WHITMAN: We get along well. I admire Governor Schwarzenegger.

CAVUTO: He doesn't say stuff like, don't pick on me and my record, or...

WHITMAN: No. You know, he has done a number of good things, workman's compensation, redirecting initiatives.

CAVUTO: Sure.

WHITMAN: But it has been harder than I think he or anyone else thought.

CAVUTO: All right. "The Power of Many" is the book, "Values For Success in Business and in Life." Meg Whitman, the Republican gubernatorial candidate, she was an asterisk not that long ago. She's leading in the Republican race, within 10 points of the Democratic candidate, if there were a general election. All right.

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