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Transcript: Govs. Barbour, Granholm on 'FNS'

The following is a rush transcript of the February 21, 2010, edition of "Fox News Sunday With Chris Wallace." This copy may not be in its final form and may be updated.

CHRIS WALLACE, ANCHOR: The nation's governors are holding their annual conference in Washington this week, and we are delighted to be joined by two of their leading lights, Jennifer Granholm, Democrat of Michigan, and Haley Barbour, Republican from Mississippi.

And, Governors, welcome back to "Fox News Sunday."

GOV. JENNIFER GRANHOLM, D-MICH.: Thanks.

WALLACE: Governor Granholm, let's start with jobs. Michigan, unfortunately — I don't have to tell you — has the highest unemployment rate in the country, 14.6 percent.

Can you honestly say that the president's stimulus is working and that it is worth the $800 billion of borrowed money that has been spent to fund it?

GRANHOLM: Right. Well, let me just tell you what it has done for us. I mean, we've see long-term and short-term investments. And obviously, the stimulus has helped to transition people through this recession, through unemployment and all of that.

But what the — and Haley and I were just talking about this. What the stimulus has done is given the companies the ability to invest — and when I say "these companies" (inaudible) the auto industry — in the electric vehicle and the batteries that will propel that electric vehicle — that whole supply chain. MSU economists say that it's going to create a whole new sector for our economy, 40,000 jobs.

So we've got 15 companies in Michigan today that are now doing that, starting to hire people. It's got a whole bright future and a future industry. So it's a short-term and a long-term strategy that has really helped us.

I'm just telling you that if we had not seen the aggressive action on the part of the Obama administration, not only would we have seen General Motors and Chrysler not emerge from bankruptcy, possibly, we would have seen a liquidation.

Millions more people would have been out of work, because not just the auto companies but the suppliers to them would have been without a customer. So it's really been — it hasn't fixed the problem, and nobody's going to say that. But it has certainly slowed the trajectory of job loss.

And I think — I mean, I hope, knock on wood, that we've hit bottom and we are starting to emerge.

WALLACE: Let me bring in Governor Barbour.

Mississippi, I don't have to tell you, has 10.6 percent unemployment, also above the national average. A year ago you were talking about not accepting the stimulus funds. And let's look at the record here.

Your latest state budget included $370 million in stimulus funds. Public schools are getting more funding than eve before. And stimulus road project signs are up around the state with your name on them. Have you changed your mind—

GOV. HALEY BARBOUR, R-MISS.: No. In fact, we—

WALLACE: — about the stimulus?

BARBOUR: In fact, we did not take $56 million that was offered to us because it would have forced to us raise taxes later. That's why we didn't take it.

State government has benefited by the stimulus package, because it's poured in billions of dollars. The problem is we need private sector jobs. And you mention the Department of Transportation and the highway projects. The Department of Transportation's independent of me.

They have a independently elected board who announced last week that the stimulus package created 500 jobs for a cost of $350 million — $700,000 a job. I was flabbergasted.

WALLACE: So let me — let me ask you both — and I want to continue this conversation — Congress, as we just discussed with Senator McConnell — talking about another jobs bill.

Let's start with you, Governor Barbour. Should they pass something? And what would you like to see come from Washington?

BARBOUR: Well, first of all, the first stimulus package was twice as much money as was needed. Then they could have created twice as many jobs with half as much money.

If they're going to have a stimulus package, let's do something like have a holiday on the payroll tax. Let's do something that helps small business.

Jennifer and I were talking a while ago — our small businesses can't get credit. They can't borrow money. And small business is the backbone - - I don't think just of my economy. I think it's the backbone of America's economy. And freeing up small business to have some credit I think is something everybody could support.

GRANHOLM: Well, in fact, the — I mean, the president is proposing small business tax cuts, which is terrific; investing in the banking industry in the terms of small and community-based banks to get loans out to small businesses — got to be a piece of it. I agree with you on that.

But I mean, I — I think your recovery site, Haley, says that you guys have created 3,300 jobs as a result of the stimulus. I know that you've been using it to help the private sector to be able to subsidize employment and you've been using stimulus money for that. That's great. I agree with that 100 percent.

For Michigan, it's 42,000 people who are working today who wouldn't be otherwise working. And across the country it's 2 million. So if we didn't have the stimulus — I mean, remember what it was like when he took office — 750,000 jobs lost in the month that he took office.

WALLACE: Wait, wait.

GRANHOLM: So this month it was 20,000.

WALLACE: Governor Barbour?

GRANHOLM: It didn't stop it, but it slowed the trajectory of jobs lost.

BARBOUR: In a big way, state government's benefited. A lot of those jobs, quote, "saved" are state government jobs. And we've got states spending 8.7 percent, but a lot of that's been made up of federal government stimulus.

So there's no question that state government has benefited. The private sector in Mississippi has benefited—

WALLACE: Let me—

BARBOUR: — very, very little—

WALLACE: Let me—

BARBOUR: — particularly in the area of job creation.

WALLACE: We could continue on here. Let me move on to health care reform.

And I want to put up some astonishing numbers that we found this weekend, and you can argue with them. According to a Gallup study done last August, 24 percent of people in Mississippi are uninsured when it comes to health care reform — health care coverage, and 14 percent of people in Michigan.

Starting with you, Governor Barbour, what should Washington do to get those people covered?

BARBOUR: I tell you that I guess that's from a poll—

WALLACE: Well, no, it was a — no, it wasn't.

BARBOUR: The official government statistics are somewhere between 16 and 18 percent of people in Mississippi. But what should we do?

WALLACE: That's a whole lot of people.

BARBOUR: It is a whole lot of people. What should we do? One thing is to bring down the cost of health insurance. And of course, one of the things we don't like about the bill that Congress was passing — both of them, House and Senate, would drive up the cost of health insurance.

We shouldn't put a huge unfunded mandate on states that would make me raise taxes $150 million in Mississippi. We shouldn't put a huge tax on small business.

I'm like Jennifer. Small business is our bread and butter. And I'm glad the president's proposed some small business loan programs. But don't then offset it by put an 8 percent tax on their payroll if they don't give them health insurance. I'll be quiet. I'll—

WALLACE: No, no. I just — I just want to—

BARBOUR: I'll be — I'll be a good boy.

WALLACE: Governor Granholm?

GRANHOLM: Yeah. I mean, For us, health care is an economic issue, because there were — there were more cars built in Ontario two years ago than in Michigan. And those auto companies weren't going there because of regulation, or taxes, or anything — they were going there because there's a partnership on the part of the Canadian government with health care.

Now, we don't want to create that exact same system, but I can tell you that other countries are providing health care for their businesses so they can compete globally. This is an economic issue. For us, it's a real issue.

Every car has $1,600 worth of health care cost embedded in it, whereas other countries — and they're our competitors — don't have that cost.

WALLACE: All right, but—

GRANHOLM: So we need to do something.

WALLACE: All right. You agree you need to do something.

But, Governor Granholm, all the polls indicate that there is overwhelming opposition to this comprehensive Democratic plan that the president and congressional Democratic leaders are offering.

And we also saw it was a big issue in Massachusetts, and we saw the stunning upset there where Scott Brown won.

If Democrats — and you must have — you — at the very least, you saw my interview with Mitch McConnell. If Democrats decide to try to push this through on a parliamentary maneuver called reconciliation, aren't they just asking for a beating at the polls in November? Is it arrogant, as Mitch McConnell says?

GRANHOLM: I think it would be incredibly arrogant of everyone to assume that we should do nothing. And I think there is a lot of common ground.

WALLACE: That's not the — that's not the question I asked.

GRANHOLM: Well, I mean — no, I mean, honestly, I think getting something done is what people expected. I don't think that people expected that 60 is the new 51 — in other words, that you have to get 60 votes for everything in order to push an agenda through.

So I'd like to — I'd like to see us get something done that does insure people who are uninsured but also gives the tools to states and the private sector to bend that cost curve, as they say, to reduce the cost.

WALLACE: Governor Barbour?

BARBOUR: Well, the history of the country when you have unbelievably broad, powerful change that's going to change 18 percent of the economy — it's life and death for every American — to say, "Well, if we can scrape up a partisan majority and get this by by one vote" — we've never done that.

Those kind of things have always had to get over the hurdle of 60 votes. Always. And there's a good reason why. The American people really don't like — don't want a government-run health care system. Their idea of health care reform is the cost should go down. And in this one, CBO says the cost will go up.

So this is a system that's very bad for jobs because it clobbers small business, the biggest job creators that we have. But one thing is right. Doing nothing shouldn't be the only option. There are lots of things that even Jennifer and I could agree on.

GRANHOLM: That's true.

BARBOUR: There are — there are lots of things. So the idea they've got to have this comprehensive package that costs a trillion dollars, and despite what they say in the out years it'll be another trillion and a half, two and a half all told — to say that the — if you're not for that, you're for doing nothing is just simply not—

WALLACE: OK.

BARBOUR: — a fact.

WALLACE: I was going to cut you off just as — we're running out of time, and there are a couple of things I want to ask you about. You say, both of you, doing nothing is not an option. Doing nothing seems to be what happens a lot here in Washington.

You, Governor Barbour, have been around Washington for a long time. You've seen how this place operates. When you have two parties unable to come together to solve — even to create a bipartisan deficit commission or to deal with health care reform, is this town broken?

BARBOUR: Well, let me tell you what happens when Washington doesn't work. We fix the problems in the states, Democrats and Republicans alike. You know, have a health insurance exchange — that's something Democratic governors and Republican governors have done to—

WALLACE: But do you think this town is in trouble?

BARBOUR: I think that health care reform is likely to turn out like welfare reform. After a handful of governors did it very successfully in the '90s, it finally pushed it over the edge and President Clinton ultimately signed the bill.

But I think that's where people are going to look for health care reform, is to the states.

GRANHOLM: And I think that—

WALLACE: And, Governor Granholm — let me just ask you, Governor Granholm, when you see a moderate Democrat like Evan Bayh basically say — turn up his hands and say, "I just can't take this town anymore," isn't that a serious indictment of Washington?

GRANHOLM: Oh, I think that there is no doubt that people view what's going on here in D.C. as not being relevant to what they are experiencing. The fact that nobody can get anything done is extremely frustrating.

But I do think that Haley's right in the sense that taking health care as an example of what states have done and using that as a model nationally is important. That's exactly what is happening in Massachusetts.

In Massachusetts, people love what's gone on with their health care plan. And that's what they've tried to embed in this national health care program, looking at what the state did, looking at what's successful, taking it across the country. And that's what they're trying to do.

WALLACE: We've got a minute left. I've got to ask you about yourselves and your futures.

Senator — Governor, are you going to run for president?

BARBOUR: This year, I'm chairman of the Republican Governors Association, and I'm going to spend all the political energy and effort I got till next — to this November election — Republican governors. Then if there's anything to think about, I'll think about it. But I do want to say one other thing they can learn from states here in Washington — we cut our budgets. We cut — you can actually cut government spending. And they could learn that from governors, too.

WALLACE: Governor Granholm, your two terms are up at the end of this year. Do you have any interest in moving here to Washington and working in the administration?

GRANHOLM: Are you offering me a job? No, I—

WALLACE: Yes, because I'm a conduit for the Obama White House. Exactly.

(LAUGHTER)

GRANHOLM: No, I'm totally focused this year on creating every single job I can until the last moment. December 31st at midnight is when I'll stop. So I have no idea what I'm going to do next, but I'm not going to run for president. I can tell you that.

WALLACE: Yes, that's true. We should point out Governor Granholm is a Canadian and cannot run for president.

GRANHOLM: I'm American. I've got dual citizenship.

WALLACE: Who are you rooting for in the Olympics?

GRANHOLM: U.S., come on!

WALLACE: OK. There you go. Anyway, they're doing—

GRANHOLM: I left Canada when I was four. Come on.

WALLACE: And they're doing better.

Governor Barbour, Governor Granholm, thank you both. Thanks for coming in today. Always a pleasure to talk to both of you.

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