Okla. governor: 'Everyone' is to blame for sequester mess

Okla. governor: Everybody's to blame for sequester standoff

Oklahoma Gov. Mary Fallin wants Pres. Obama and Congres to sit down and put the nation first, for once

This is a rush transcript from "On the Record," February 28, 2013. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Governors across the country scrambling to deal with the sequester fallout in their states. When asked who is to blame for the mess, Oklahoma Governor Mary Fallin answered, "Everybody." She joins us. Nice to see you, Governor.

OKLAHOMA GOV. MARY FALLIN: Good to see you, too, Greta.

VAN SUSTEREN: OK, Governor, so who -- who are the everybodys? I mean, I got my list of everybodys, but who's yours?

FALLIN: There's a lot of people. Well, first of all, beginning at the top with leadership, and that's the president. You know, the president suggested the sequester, and of course, it went to Congress. Congress put it in there as a default, that they were going to work on trying to balance the budget, lower the deficit. They didn't do it. So now we have this default of the sequester.

So I think everybody is to blame, whether it's Republicans, Democrats, the House, the Senate, the president. But in the end, it starts at the top with the president.

VAN SUSTEREN: All right, I've looked at the -- the White House issued a paper, and I'm looking at the part that goes to your state, Oklahoma, where they say that all -- this is where the cuts are going to affect Oklahoma. And I'm curious whether you agree. It says Oklahoma will lose approximately $4.9 million in funding for primary and secondary education, putting 70 teacher and aide jobs at risk.

Now, that $4.9 million funding -- maybe you know this or don't -- is that additional money that you weren't expecting? I mean, where -- what's this $4.9 million? Is it -- are you going to be below the baseline of what you've had, or this slowed growth?

FALLIN: I think it's going to be slowed growth. I mean, it's hard to tell. I mean, a lot of the governors just don't know exactly what to expect. And all we hear is these scare tactics that we're going to have to cut teachers, we're going to have to cut this, cut that, all these different scary things that are going to happen.

But you know, in my state, when I took over two years ago in Oklahoma, we had around a $6 billion budget. We had a $500 million budget shortfall, and I didn't go around scaring people, telling them I was going to have to kick granny out of the nursing home or fire all the teachers or do these kinds of things.

What I did was go about prioritizing my spending, looking at ways I could eliminate government waste, make things more efficient. I was able to close that budget gap, which was close to around 8 percent cut in spending in Oklahoma. And the result of that has been that my unemployment rate dropped from 7 percent down to 5.1 percent. Now I have actually economic growth in our state. And we went from having $2.03 in our rainy day savings account to over $600 million in savings in just two years.

So if states can do it, the federal government can do it. What I don't hear the president talking about is how are we going to make government more efficient, more effective, eliminate waste? He just talks about how we got to have tax increases, how we got to cut all these programs and how we're going to just scare everybody into believing that the nation's going to heck in a handbasket.

VAN SUSTEREN: Let me ask you about your prior life when you were in Congress, and just so you can explain. -- I think this is an important point to drive home for the American people because they hear the word cut, and they think that means that we're going to have less this year than we had last year. That's what -- that's what most people think cut is. But in Washington language, what cut means is that we're just not going to grow as much as -- we're not going to spend as much extra that we planned to spend, right?

FALLIN: We're going to slow down the growth.

VAN SUSTEREN: Now, how...

FALLIN: And in fact, you know, spending has increased so much in Washington, D.C....

VAN SUSTEREN: How does Washington, D.C., get away with calling that a cut, the slowed-down growth?

FALLIN: I don't know.

VAN SUSTEREN: I swear, everyone thinks -- everyone thinks it's a cut. It's just -- we're just not going to spend as much as we thought we were going to spend extra.

FALLIN: Absolutely. We're just not going to spend as much as we have been, and we shouldn't be spending so much. I don't think people think we don't have enough money in Washington. I think they think we have a spending problem. I think we have a spending problem in Washington, D.C.

I know for the time that I was in Congress to the time I've been governor, we've just seen spending go up and up and up in Washington. So what we're really talking about is slowing down the spending growth in Washington, D.C., and we can do that. Governors across the nation, Republican governors, are proving that they can do that.

VAN SUSTEREN: Well, I'm not -- I'm not convinced that we even need to cut programs because there's so much fat in the government and there's so much waste...

FALLIN: Absolutely.

VAN SUSTEREN: ... that if we even made even one effort to locate it, to locate the fat, the repetitive payments, anything -- I'm not even sure we have to cut any of these services!

But anyway, Governor, I take the last word on that. Thank you.

FALLIN: Thank you.