GOP governors frustrated after meeting with Obama

This is a rush transcript from "Your World," February 26, 2013. This copy may not be in its final form and may be updated.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: So I look forward to our partnering. And with that, what I want to do is clear out the press so we can take some questions. All right?


NEIL CAVUTO, HOST: So, who really got the shove? The press or the governors whose questions the president wanted to take when he threw all the journalists out?

Reports when a very frustrated South Carolina Nikki Haley asked Mr. Obama if he would back a last-minute plan to cut 2 percent from the budget without raising taxes, his very quick answer was, and I quote, "No."

To Nebraska's Republican Governor Dave Heineman, not too keen on that answer.

Well, at least he was direct. What do you make of that?

GOV. DAVE HEINEMAN, R - NE: He was direct, Neil, but the fact of the matter in the $3.5 trillion budget, the idea that you can't cut 2 percent is absolutely ridiculous.

Every governor in America knows how to do it. We have done it the last four or five years. I have balanced our state budget eight years in a row by controlling spending, not by raising taxes. That is what they ought to be doing at the federal level right now.

CAVUTO: Now, he says as things stand now, the White House does, Governor -- maybe you can enlighten me -- there -- he is limited about this. He has to kind of cut in these very restricted, some would argue, severe areas, because there is no alternative.

And Republicans, hearing that, said, Mitch McConnell chief among them, Republican leader in the Senate, well, we will give you broader parameters. We will give you the discretion to decide what in those agencies and departments to cut. Democrats quickly scoffed at that.

That to me -- I don't care whether you're Republican or Democrat -- sounded like a good idea. All right, Mr. President, you're arguing that we risk eating horsemeat next week if we don't get a handle on not firing beef inspectors the end of this week. Why not give you the discretion to avoid just that?

HEINEMAN: Well, Neil, I think that would be a great idea.

Any chief executive should want that authority. But I will share with you, when the president was asked that question in our governors-only meeting, he said he didn't want that authority either. I was absolutely shocked by that answer.

CAVUTO: Why? Why?

HEINEMAN: I don't understand.

I would argue, instead of going to Virginia today to campaign, he should have brought the House and the Senate leadership together and they should have stayed together until they worked out a deal.

Now, sequestration isn't the best way to do it, but if it's the only way to reduce spending, we are going to have to move forward. They're engaged in a bunch of scare tactics right now, and the American people are smarter than what they're hearing from our leaders right now. They understand that is not going to happen.

CAVUTO: Well, they have lost respect, that is, average voters for both parties, through this whole debacle.

But, having said that, Governor, in this give-and-take session with governors, did the Keystone pipeline come up, an issue of course very near and dear to you? Because there's talk that the president might decide to go ahead with it, ticking off environmentalists, maybe making a lot of unions happy. What's the latest on that?

HEINEMAN: Well, it came up indirectly in a question from the Oklahoma governor, but he didn't really respond.

On the other hand, I have been led to believe maybe there's a possibility, after doing something on climate change, the president might in fact approve the Keystone pipeline, but I have no direct knowledge of that. That's only several sources when I was in Washington, D.C., indicated they thought that might happen.


HEINEMAN: So, ultimately, I hope he does approve it. It is more jobs. That would help the economy, reduce our dependence on foreign oil. Everything about that would be good news for America.

CAVUTO: All right, we will see hopefully soon one way or the other. Governor, always good. Thank you.

HEINEMAN: Thank you, Neil.

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