How Gov. Walker's Budget 'Repairs' Wisconsin

This is a rush transcript from "On the Record," March 1, 2011. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Here's the bottom line. Wisconsin is broke, no money. The state's Republican governor is on the defense.


GOV. SCOTT WALKER, R-WIS.: We need the savings in the budget repair bill because Wisconsin faces a $3.6 billion deficit. Too many politicians have failed to tell the truth about our financial crisis. They left Wisconsinites in the dark about the extent of our fiscal problems. The facts are clear. Wisconsin is broke. And it's time to start paying our bills today so our kids are not stuck with even bigger bills tomorrow.



VAN SUSTEREN: So what is really happening in the governor's office? Now, we asked the state's number two, Lieutenant Governor Rebecca Kleefisch. She went "On the Record."


VAN SUSTEREN: Lieutenant Governor, nice to see you again.

LT. GOV. REBECCA KLEEFISCH, R-WIS.: Good to see you, too, Greta.

VAN SUSTEREN: All right, now, I know you're having a problem with the budget repair bill and the missing 14 senators, but let me talk about the budget that the governor has just released for the next year. Tell me, what is it he is cutting out of it? What's going to make people very unhappy across your state?

KLEEFISCH: Well, I think the thing that is making people have a few misgivings right now is still the collective bargaining, and I think that will continue to be the piece that people are confused by. But I think this budget is a perfect one for the state of affairs that we're in in the state of Wisconsin. You know that we're in the middle of the deepest economic recession in generations. We're facing a $3.6 billion budget deficit. This budget fixes that.

In fact, in the past, we have had structural deficits. In just the last biennium, in fact, we had a $2.5 billion structural deficit. This is a $250 million one, the lowest in recorded history. I think that our governor has stayed true to his morality, to his -- his virtues, to his frugality, and I'm tremendously proud.

VAN SUSTEREN: All right, let me talk about the collective bargaining issue. As I understand it, the governor wants to do away with collective bargaining as to public employees, except for the issue of salary, which he will agree to collective bargain. What is it that makes it such a big difference to your budget that you don't collective bargain on other issues?

KLEEFISCH: Well, you know, Greta, that you don't join together to bargain in order to ask for less. You join together to bargain, you collectively bargain in order to ask for more. And collective bargaining is a huge cost driver for us. So in addition to the 5.8 percent pension contribution and the 12.6 percent health care contribution, we need that collective bargaining piece in order to make our fiscal puzzle work.

VAN SUSTEREN: And does it make a difference -- I mean, that -- I mean, he said he's going to collective bargain as to salary. But are there other aspects of this collective bargaining which drive the costs up?

KLEEFISCH: Absolutely. Let me give you some examples. For example, through collective bargaining, there are a lot of teachers in the state of Wisconsin that are forced onto a teachers union health plan call the WEA Trust. It costs taxpayers $68 million that wouldn't be going directly into classrooms. That's money that could directly be going to helping students learn, books and desks, that type of thing. In addition -- go ahead.

VAN SUSTEREN: But if they get -- but if they get health insurance someplace else, where -- I mean, I take it that it's at a cost less than $68 million. Is that the savings?

KLEEFISCH: You're right, through the state health insurance plan, they would save that $68 million. In addition to that, through collective bargaining, Milwaukee public schools teachers have actually asked taxpayers to pay for Viagra to be covered to the tune of nearly $800,000. Now, that's money that's not going to go to enhance performance inside the classroom, and that's real dollars that we're talking about through collective bargaining that we're losing.

For example, our corrections officers can call in sick to a shift, but through collective bargaining, did you know that they could actually collect overtime if they went in to do a different shift on the very same day? These are the things that are the result of collective bargaining. These are real fiscal items, and they are serious cost drivers for us.

VAN SUSTEREN: Lieutenant Governor, nice to see you. Hope you'll come back. And we'll continue to watch what's going on in the great state of Wisconsin. Thank you.

KLEEFISCH: Thank you so much.