Union Battleground Goes to '$8 Billion in the Hole' Ohio

This is a rush transcript from "On the Record," February 21, 2011. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Well, it's not just Wisconsin, there is unrest seizing our nation. How about Ohio? Protests are now rocking Ohio's state capital. Union workers are blasting the Ohio governor for pushing a bill very similar to Wisconsin's "budget repair" bill. Senate bill 5 strips collective bargaining rights from Ohio public workers.

Ohio Governor John Kasich joins us on the phone. Good evening, Governor. And your reaction to the protests in your state?

GOV. JOHN KASICH, R-OHIO (Via Telephone): Well, Greta, I mean, you know, protesting is -- you know, it's the all-American way, right? But you know, to understand what we face out here, we're $8 billion in the hole. And we are not a competitive state. We've lost 600,000 jobs in the last 10 years, and only California and Michigan have done worse. And our young people leave after three years, a third of our college graduates.

What I'm doing is I'm going to cut taxes, preserve the tax cut we have, and I'm going to balance this budget and I'm going to restructure the state. And collective bargaining is just one piece of an overall reform program designed to make us competitive again. And if we're not competitive again, Greta, and we can't create jobs, we're going to continue to slide. And I cannot let that happen on my watch.

VAN SUSTEREN: Governor, is the president or his stimulus bill helping you in any way?

KASICH: Helping in what way, Greta?

VAN SUSTEREN: In dealing with your deficit problems, I mean, and sort of -- sort of revving up your economy.

KASICH: No, Greta. We really are struggling here. I mean, when you take a look at the ability to really be a state where people want to come and create a job, it's very, very difficult. We're under siege here in Ohio, to tell you the truth.

What's going to fix it for us is if we can balance our budget, if we can reduce our taxes, if we can reduce our regulations and create an entrepreneurial atmosphere so people have the confidence to risk-take and invest in our great state. And we have not been doing well on that score, Greta. And the collective bargaining reforms are just one piece of a whole series of reforms to get us into the 21st century before we don't have much left here.

VAN SUSTEREN: Governor, well, it is certainly not received well by some in your state. Brian Brennan, head of the Youngstown State University Association of Classified Employees, made an Adolf Hitler reference and was quoted as saying, "In 1933, Hitler gave Germans something they always wanted, a day off on May 1st. On May 2nd, they woke to find Hitler had abolished the unions and confiscated their assets. Fast forward, 2011 Ohio."

So it sounds like it's getting pretty rough in your state, the level of vitriol. Some don't like what you're doing.

KASICH: Well, Greta, look, I mean, first of all, we're not abolishing anybody's jobs. We have over 9 percent unemployment in this state. And you know, we have to get people working again. I was just in Youngstown, you know, with the shooting that occurred up there, and part of it happens because people lose hope because they can't get a job. They can't be successful. We need to change that.

Furthermore, look, Greta, when the average private sector employee in Ohio is paying 23 percent of their health care costs and the average city worker in Ohio is paying 9 percent, all we're searching for is a balance. All we're trying to do is to give our managers, our cities, our schools and even our state the tools to control their costs. If you can't control your costs, you can't survive in business. You can't survive as a state.

Furthermore, frankly, the reforms that we're going to put in place are going to provide an opportunity for workers to not be cut off somewhere down the line because they've been over-promised, Greta. Look, this is not about attacking anybody. This is about saving our state and making sure that Ohio can be prosperous again. And it fits into an overall plan to make us competitive.

VAN SUSTEREN: We only have 30 seconds left. What happens if this bill doesn't pass? Tell me what you think will happen.

KASICH: I believe it will pass. I believe it will pass.

VAN SUSTEREN: So that we understand the impact of it, I've been trying to -- I'm trying to figure out, like, why you're -- why you're passionate about it.

KASICH: Well, I'm passionate about the whole reform package, Greta. I mean, we're $8 billion in the hole. If you were $8 billion in the hole and you realized there are things that you can do to control your costs or to give other people the means to control their costs, wouldn't you do it? And that's exactly what this bill is. It says that people can still negotiate for their pay, but there's a number of things -- for example, one of our public employees can get an automatic step increase plus a cost of living raise. People in the private sector don't get those things.

So it's restoring a sense of balance and allows us to control our costs. If we raise taxes in Ohio, Greta, we will go backwards. We will lose more jobs and more people will be punished. We'll have more homelessness and more joblessness. If, in fact, we can move forward, reform this entire government, reduce the cost of creating a job of creating a job in Ohio, balancing our budget, we can be a bright light not just in Ohio, in the Midwest, but in the country. And maybe they can get a little message in Washington about how to balance a budget, which I helped to do in 1997 as the Budget Committee chairman.

VAN SUSTEREN: Governor, thank you, sir.

KASICH: Thank you Greta.