Transcript of California gubernatorial debate - 9/24/03

Transcript of California gubernatorial debate

Sacramento, California -- September 24, 2003

Here is a transcript of Wednesday's debate between the California gubernatorial candidates, sponsored by the California Broadcasters Association at California State University, Sacramento.

The participants were Democratic Lt. Gov. Cruz Bustamante, Green Party candidate Peter Camejo, independent candidate Arianna Huffington, Republican state Sen. Tom McClintock and Republican Arnold Schwarzenegger. The moderator was Stan Statham.

MODERATOR: What do you think of this recall, Mr. Schwarzenegger?

SCHWARZENGGER: I think it is a great idea, and I thank God every day that we have Hiram Johnson that created this more than 90 years ago. His intention was to create this recall because of special interests controlling politicians, which is exactly what is the case today. And when six million people have signed the recall petition, they basically have said we're mad as hell and we're not going to take it anymore. And the 60 percent of the people have said in the polls that they want to have a recall, so it is terrific that the people's will is being acted out.

MODERATOR: Let's take this question, just down the line. From this point forward, jump in after the question is first answered.

McCLINTOCK: The recall is there so that people can correct a mistake that was made at the ballot box. Our entire form of government is based on the assumption that more than half the people are right more than half of the time. That doesn't mean that every now and then they're not entitled to make a mistake. The re-election of Gray Davis and the course that he has taken this state down was a mistake and it must be corrected. We cannot afford to go down this road another three years. It has led our state to the brink of bankruptcy, and despite the highest percentage of personal income being spent in the history of California and less to show than any administration in the history of California.

CAMEJO: This recall exists because we have a crisis in California. There's no question that in the last five years we have the highest income the state has ever had, and instead of ending up with a surplus we ended up with this disastrous deficit. The polls have taken the governor, Gov. Davis, down to 22 percent and that can't be done by the Republicans alone. They were only 35 percent of the registered voters. So we do have a crisis here. And this election is the worst election we've ever had and best election we've ever had. Why the best? Because the public has really gotten a chance to see more than two points of view. To all of a sudden have two candidates here who are not Democrats or Republicans... And it's the worst because we don't have a runoff system. We have no way for the will of electorate. ...

MODERATOR: Thank you. If we can make this as quickly as possible. Arianna Huffington, what do you think of the recall?

HUFFINGTON: I'm troubled that Darrell Issa could spend close to $2 million to collect signatures, paid signature gatherers. There are a lot of elements which are troubling. But nevertheless there is an unprecedented, historic opportunity here to elect an independent progressive governor on a simple plurality. And the state desperately needs that because the two party political system is dropping and that opportunity will not come again in a. ...

BUSTAMANTE: I think the recall is a terrible idea. I think it's bad for democracy. I think it's bad for our state. I know people right now who are organizing to recall the next governor if it's a Republican. I think that's a bad way of doing politics. I think it's a perpetual type of politics. I agree with my colleagues that there is some good that could come from this as a result. But I think that to do it in this way, even Hiram Johnson as Arnold talked about in terms of him creating the recall process, even in his inaugural address said that it wasn't the panacea. The recalls are not the panacea for government. I really think that we have a situation here that we have to deal with in terms of the budget crisis. That's true. ... But this recall could end being an era of perpetual politics that I think would be bad for California.

CITIZEN QUESTION: What should California's top priority be right now?

SCHWARZENEGGER: I think that our top priority right now should be turning the economy around. We have the worst economic atmosphere, worst business atmosphere in California. And what we see is that because businesses are leaving the state and jobs are leaving the state. We have the have highest workers' compensation costs. We have the highest energy costs here. We have the worst money management. We have the worst credit rating. We have all of those things that drive business away. And we are over-regulated, over-taxed, over-burdening our businesses. And so no matter where I go in this state it is the same thing -- that workers' compensation is killing business and we have to stop and reverse that.

HUFFINGTON: Actually, you know, I agree with one thing you said, that the worker's comp system is broken. But everything else you said is simply untrue. In the last year, there is an increase in business in the state of 3.7 percent. This state right now is taxed at a lower rate than when the chairman of your election committee, Pete Wilson, was governor. This gloom and doom statistics about business leaving are simply a perpetuation of the Republican idea that if you simply do everything that businesses want, if you simply let them have all the loopholes they want, that all will be well. And we saw in the 1990s that was not the case. You ended up with Enron, Global Crossing and billions of dollars lost in shareholder wealth and in pensions. And I would really like you to tell the people the truth because these illusions are simply hurting us.

McCLINTOCK: Arianna, if I may, the statistics that we're seeing reported across California directly contradict what you have said. We've had a net loss of nearly a third of a million jobs in the last two-and-half years. We've had the first net out-migration of domestic population in our state's history. And a lot of that is going to Arizona and Nevada. Now that's a pretty profound development in the history of the state -- when families looking for a better future, a better place to raise their kids, look at our beautiful state with all of the blessing that God could bestow upon a land and find a better future out in the middle of the Nevada and Arizona deserts than they found here in California. When Fidelity National announced they were leaving for Jacksonville, Florida, their CEO, taking 400 jobs with them, their CEO was quoted on local TV. He said this wasn't a complicated decision. In Florida there is no income tax. The sales tax is 6 percent. It costs 40 bucks to register your car. Why is everybody surprised we're leaving?

MODERATOR: Thank you. What side are you taking, Mr. Camejo?

CAMEJO: I think both Tom and Arnold are both factually wrong here. First of all, corporations are now being charged the lowest tax rates that they have been for decades and decades. Their tax rates have gone in the last 60 years from 9.6 to 5.3 percent. In fact, Utah, Wyoming and Arizona, three states where the Republicans dominate, have higher taxes than California. So I want to ask Tom and Arnold to go visit those states and have a talk with them before they come and tell us to lower taxes when their Republican Party has higher taxes than our neighbors. People are not leaving California. They're pouring into California. This is a place people want to come to. We're right now hitting a record GDP. But we have too much unemployment because we're having a jobless recovery. That is, the corporations are making more money than ever before but not the people. We need to look at the fact that people are paying much higher taxes than the wealthiest people in our state or what the corporations are paying. I want to cut taxes on the majority of the people, but I want the richest people, that 1 percent that have more income than 70 percent of our people to pay the same taxes you're paying, the average person, so we can balance our budget and start moving in the right direction.

BUSTAMANTE: There are a couple things first. During the dot-com boom, we were doing about 7,100 new business startups in California. Today we're averaging 7,700 new business startups in California. The work productivity of the workers of California are more productive than Texas and Florida combined. There are problems, however. We do have a great economy. We are a $1.5 trillion economy, but we do have to fix this workers' comp issue. And what I would propose is that we do it much like we do the safe-driver proposal. There's no incentive for a good workplace and a bad workplace because they get paid or they get a premium that's exactly the same amount. So if we were to provide a worker a safe workplace discount, and we'd be able to have an incentive for those people who are not doing a good job to do a better job, we could lower premiums on those that are good worksites and increase the premiums on those that have the bad work sites.

McCLINTOCK: Let me do you one better. Let's just replace our workers' compensation law with Arizona's. Arizona's costs one-third of what ours does. Injured workers are being fully compensated.

BUSTAMANTE: No, they're not. No, they're not, Tom.

McCLINTOCK: And just replacing the systems, that's a two-thirds reduction in workers' comp costs, which not only lifts an enormous burden from business, but it also reduces direct state and local cost by $2.5 billion.

HUFFINGTON: First of all, you know, this is the two parties that brought us the broken workers' comp system. In 1993, you voted for the deregulation of workers' comp. And Pete Wilson was over there, your chairman. You can't just say we did that and now we're thinking something different because that really has been the problem. Workers' comp deregulation, energy deregulation and all the problems of this past are now coming to haunt us, and there has to be some accountability, Cruz.

BUSTAMANTE: No, I think you're absolutely right. In the first situation, we really did try. You're absolutely right, what we tried to do is tried to fix the workers' comp issue by squeezing down on the insurance companies. They were clearly price-gouging. They were clearly doing things that were affecting the premiums, and we tried to squeeze down on that. Unfortunately, they went into some predatory pricing. They drove the small guys out, and then the rates started going out, going back up again. Here, we have an opportunity to change fundamentally the system by providing work safe places where they have good solid work safety places that will ... give them a lower premium.

SCHWARZENEGGER: ... That you guys just did was total pre-election bogus and you know that. This is all trickery, just like the budget was trickery. This was a trick again ... because you wanted to put wool over our eyes.

SCHWARZENEGGER: Let me just tell you that the next year, you say this reform, but next year the workers' compensation costs are going to go up. This is not what's going to help our businesses in California. Our businesses are moving away because we're not competitive in workers' compensation. There's tremendous fraud there and all those kinds of things. What we have to do is, when I go into office I will create real workers' compensation, cut the cost in half. That's what we need to do. I visited companies here in California. I visited the farmers and the small companies, big companies, bankers and all that stuff. Everyone is saying the same thing, that our workers' compensation is way too high. We are paying three times the amount of the national average, and as Tom was saying, that our neighboring states are much more competitive. This is the problem we have, and that's why business are moving out of the state.

MODERATOR: Mr. Schwarzenegger, thank you very much ... convinced we've pretty much done with this subject.

McCLINTOCK: We all have friends, family, neighbors who are leaving California and finding a better place out in the Nevada and Arizona desert. That's what's happening.

MODERATOR: Excuse me. We're going to wrap this subject up in one minute. Go ahead, Mr. Schwarzenegger.

SCHWARZENEGGER: It's ridiculous for Cruz and Arianna to say that everything's fine and dandy and everything's perfect. It's not. Let me tell you something, we have never seen a situation like this, a $38.2 billion budget deficit. We just found out that they did the operating deficit, this is operating deficit ... up to $10 billion. There's so much trickery ... Remember one thing, in California we have a three-strike system. You guys put wool over the people's eyes twice, the third time now, you're out. On Oct. 7, you guys are out. It's that simple, OK?

CITIZEN QUESTION: My question is how would you propose enhancing revenue and or what specific cuts would you make to spending in order to achieve a balanced budget?

MODERATOR: Senator McClintock, this question is yours.

McCLINTOCK: It's a great question, and I do have to correct Arnold. It's not called a three-strikes law. That's the lemon law where you have a car that doesn't work, you get to take it back. That's a very important question. First of all, this state is already spending a larger portion of people's earnings than at any time in its history. We are not suffering a revenue problem. In the last four years of this administration, inflation and population combined has grown 21 percent. Our revenues are up 25 percent. That's after the dot-com collapse, after the car tax and after state revenues. We're taking in significantly more revenues than inflation and population. The problem is, we have a 38 percent increase in state spending in that same period of time. We haven't gotten a 38 percent increase in highway construction and school construction. We're paying through the nose for this government to provide. And it's not hard to find ways to find a system that produces as little as California and costs as much. Let me just give you some examples. If we simply restored to the California government the same freedom that every family or every business has to shop around for the best service at the lowest price, there's about $9 billion in savings across all departments in that one reform alone.

MODERATOR: Let me you cut you off for a second. I'm going to let you continue. You've got a minute and a half, we're gonna try to get as many questions as possible, so wrap this up if you could, please.

MC CLINTOCK: Let me come to about $8 billion of specific cuts and then we'll move on. Six billion dollars can be saved simply by reorganizing the state's bureaucracy. That means abolishing agencies that duplicate federal functions, or that overlap each other's jurisdiction. As I said earlier, workers' compensation reform ... simply swapping our plan for Arizona's. That's about $2.5 billion of direct savings to local governments and state governments alone. That's about $18.5 billion without even breaking a sweat.

MODERATOR: Mr. Camejo?

CAMEJO: Look, we pay ... the average person in California pays about 9.2 percent of their income in taxes. The wealthiest one percent pay 7.2. If we just had the wealthiest 5 percent, who receive all the advantages of the great strides in the economy in the last 10 years -- their income rose 113 percent. Your income only rose 8 percent. Latinos actually declined 3 percent. If we taxed them at the same rate that you pay, we would now have a surplus in the budget. We're 27th in education, we were No. 1 in the nation in the economy. And Tom wants to cut, cut, cut. I want to put more money into education. I want a fair tax. On my Web site, votecamejo.org, we showed exactly how it can be done. How we can have a $19 billion surplus, and that means we can start developing affordable housing, we can make California the leader in renewable energy. These are the things California could be doing, and all they want to do is cut, cut and rip, rip over here on my right, and the others, I don't know what they do. They get all the money in the world, they spend it all, we don't know where it went. I'm calling for a five-year audit. I want a five-year audit to find out how we had a $30 billion surplus turned into a $38 billion deficit. Because I think we just don't know for sure how some good things were done. And let's say it, more money was put in to give teachers a higher pay, some steps were made in taking care of some of our infrastructure. We don't want to go back on that, but it was done irresponsibly. They didn't worried about the income. They were cutting the taxes on the wealthiest people while they raised your taxes. I want to reverse it.

MODERATOR: Thank you, we're going to have Arianna Huffington. How are you going to balance the budget, Ms. Huffington?

HUFFINGTON: Well, the first thing I would do is close corporate tax loopholes because right now, just in terms of how they're assessing commercial properties, we are losing about $2 billion in revenues. And if we just change that, if we just assess commercial properties fairly, that would be $2 billion. If we just close the loopholes when it comes to tax shelters -- both domestic and offshore tax shelters -- that would be another $2 billion. And what I find amazing is that Republicans really do not believe that morality applies to businesses. You know really for them it's just sexual morality. And I think it's time. You know, Arnold mentioned the three strikes and you're out law. I'd like a three strikes and you're out when it comes to corporate spenders. And right now we have something like that right in front of the Legislature, and it should pass because it should be absolutely unacceptable that companies defraud the California public and then the state continues to do business with them. Is this the kind of business climate that we want to bring to the state? The same kind of business climate that brought us Enron and Global Crossing and Adelphia? And it's cost millions of jobs and we're still paying the price? And one more thing Arnold, you know you talk about ...

SCHWARZENEGGER: I love it. Arianna, let me say one thing. Your personal income tax has the biggest loophole -- I can drive my Hummers through it. That's how big your loophole is. Let me tell you something. I don't know what you're talking about. I cannot believe you.

HUFFINGTON: We've got advanced notice in the New York Times that you're going to say that. And you know very well that I pay $115,000 in property taxes and payroll tax. And you know what? I'm a writer. In these two years, I was writing and researching a book and I wasn't making $20 million violent movies. I'm sorry.

MODERATOR: We need to move, we need to move.

HUFFINGTON: Let me finish, because we're talking about something very, very (unintelligible).

MODERATOR: Can you do it 30 seconds?

HUFFINGTON: Yes, I can do it in 16 because the truth is that small businesses sometimes make losses, sometimes make profits. When my book (unintelligible) was published in 2003, it became a best seller. That was a great year, and I'm going to be paying a lot of taxes. There was no loophole. And instead of focusing on distorted information, you should be focusing on the huge loopholes that the Bush administration and other Republicans around the country have allowed that have defrauded us of billions of dollars.

MODERATOR: Thank you, and before we get to the lieutenant governor, I'd like to admonish the candidates very politely. Because we're supposed to stay on topic, I don't know how Ms. Huffington got to Republican sexual morality and balancing the budget, but she managed to do so.

SCHWARZENEGGER: That's our Arianna.

MODERATOR: Let's get to the lieutenant governor. He's been around for some time, and he just came from being speaker of the Assembly before that. Mr. Bustamante, how are you going to balance the budget?

BUSTAMANTE: Well clearly we spent too much. We spent more as a government, we spent more than it was coming in. There's no rocket science to this. We clearly knew that there were certain incomes that were coming in, and we spent more than we had. But what I've decided to do, what I've decided, to face this realistically, to deal with this practically, to understand it and not tell half-truths about what we're likely able to do. We've done all the easy things, and now it's time to do the tough things. That's why I submitted a plan. A plan that I called tough love for California. In that plan, I raised tobacco taxes, I raised alcohol taxes, I raised the upper income tax brackets on the largest and the highest 4 percent of all Californians. I do that, but in return we close the budget gap, we fully fund education, we put 123,000 community college students back into our colleges, and we relieve the car tax for all those vehicles that are under $20,000. We do something in terms of raising taxes. She called it raising revenues. We know what it really is. But at the same time, we get something good for California.

HUFFINGTON: You know it's tough love for everybody except for Indian gaming tribes and the prison guards union. And that's really the problem here, it's tough love for everybody except for big campaign contributors.

McCLINTOCK: It's certainly tough on taxpayers, that's for sure. And here's the problem that I would pose. What makes you think that your $8 billion in tax increases is going to do anything differently than when Pete Wilson raised taxes $7 billion in 1991? Those taxes broke the back on the economy and they turned a recession into a near depression. And we actually ended up collecting a billion dollars less total revenue after those tax increases went into effect than what we had been collecting before they had gone into effect.

BUSTAMANTE: Exactly. I believe, Tom, that the future of California really is investing in our education. You know we're closing down community colleges, 123,000 students are not going to be going to community college this year. Everything we have done in California has been based on research, you know that. Unfortunately, those of us who have been working diligently to try to make sure that we keep tuition low, and allow (unintelligible) for every single student, we know that our future really is .... It's not just some slogan, it's not something we put on a brochure.

MODERATOR: All right, you've both made your points on this. Except for Mr. Schwarzenegger needs another shot at this.

SCHWARZENEGGER: Yeah, I don't understand all this ... so what you're saying all this ... The politicians make a mistake, they keep spending and spending and spending, then when they realize they made a mistake and spent money they don't even have, then they go out and go tax, tax, tax. That's the answer to the problem? What about finance spending?

BUSTAMANTE: Well, in fact, when I was speaker, we voted a middle-income tax cut.

SCHWARZENEGGER: What you have to do is put a spending cap on it. You guys have an addiction problem. You should go to an addiction place because you cannot stop spending. What happens then is if you keep spending.

BUSTAMANTE: Well, that's what happens when you simplify things.

SCHWARZENEGGER: What happens then is if you spend, spend, spend, then you have tax, tax, tax, but all of a sudden you say, 'Where are the jobs?' Gone, gone, gone. That's the problem that we're facing here.

MODERATOR: All right, thank you. Hang on right here, what do you got, Arianna? Short?

HUFFINGTON: Arnold's analysis fits perfect the Bush administration in Washington. They keep spending, spending, and you have to...

SCHWARZENEGGER: Arianna, you can campaign against Bush. Arianna, if you want to campaign against Bush, go to New Hampshire.

HUFFINGTON: No.

SCHWARZENEGGER: Go to New Hampshire. It's the perfect place for you. You're in the wrong state right now.

HUFFINGTON: No, you know, because otherwise, it's so hypocritical for you...

SCHWARZENEGGER: Or maybe a little bit more decaf.

HUFFINGTON: No! You know what?

CAMEJO: It is amazing that you will not say, you will never say that the wealthiest people should at least pay the same tax rate as the average person. You will never say those words. And in fact, you've been raising the taxes in California on the poorest people who pay the highest tax rates. And I'm the only candidate saying cut taxes on 60 percent of our people that are overpaying. I'm the only one who says it. But I want the rich to pay their fair share. And neither Tom or Arnold will say it. All you got to say is, 'Yes Peter, you're right, the rich will pay the same amount as the average person.'

SCHWARZENEGGER: Peter...

CAMEJO: It's just four words.

SCHWARZENEGGER: You know something, you talk about Bush and all this stuff. Let's talk about California. This is ... We're not in Hampshire. We're not in Washington. Arianna, it's our problem...

MODERATOR: Your attention. Your attention. Candidates, can I have your attention? I think I actually I have a budget-related question that may be on point and you can all get specific because somewhere in all of this, somebody mentioned a vehicle licensing fee. So let's, I'll jump in and see what you're going to do about vehicle licensing fees in California. Who wants to go first?

CAMEJO: Let's let Tom go first. I agree with you on this.

MC CLINTOCK: That's actually the campaign that I started five years ago, to abolish California's car tax. It is a tax on a necessity of life. Not a penny of it goes to fixing the roads. I have said from the beginning of this campaign, that the very first act that I will take within moments of taking the oath of office will be to sign an executive order to rescind the governor's crippling of this tax. If he can claim that he has the authority to raise the fee, then by God I can claim the same authority to lower it right back again. But I want to see it abolished. That's why we're circulating an initiative right now to abolish that entire use of tax and to guarantee local governments full reimbursement.

CAMEJO: Amazing, Tom, but as a Green I agree with you.

SCHWARZENEGGER: I agree also, Tom, on this because I think it's a difficult situation for you to (spend) too much money and now you want to tax the poor people. That is the problem.

HUFFINGTON: Everybody agrees with the (unintelligible) and the car tax. But I want to return to something very important because the people of California need somebody who is going to fight the Bush administration for that, because you know what? Let me just tell you the facts, let me tell you the facts. The repeal of the estate tax alone is costing us over $3 billion.

MODERATOR: We're starting the clock. Two more minutes left on this. Two more minutes on the budget.

HUFFINGTON: Right, well there's a huge connection between our budgetary problems here and the decisions made in Washington. And we need somebody who's going to fight for properly funded mandates -- whether it's on education or in health care -- and who's going to fight the administration when it's completely costing us jobs? It's completely hypocritical of Arnold to come here...

SCHWARZENEGGER: Arianna, we're talking about the car tax right now and not about education.

HUFFINGTOM: Let me finish. Let me finish. Let me finish. You know, this is completely impolite and we know this is how you treat women and we know that, but not right now.

MODERATOR: On that point, excuse me, excuse me, excuse me. Candidates please, let me take control of this for a moment. I'm going to decide it is my privilege as moderator that that was a direct and personal attack on Mr. Schwarzenegger, so would you respond?

SCHWARZENEGGER: I would like to say that I just realized that I have a perfect part for you in 'Terminator 4.' That's it.

MODERATOR: All right, I think at this point.

CITIZEN QUESTION: How are you going to ensure that all Californians have adequate health care?

CAMEJO: All advanced Western countries have established universal health care. We are the only nation that hasn't. And we really have to realize that having the insurance business running our health care is not working. We have to turn to a single-payer system. I support (state senator) Sheila Kuehl's proposals. I think SB2 that John Burton has raised is a step in the right direction but not the real answer. Actually, if we did this, a study was done that shows that we would save $7.3 billion in California, about $4 billion actually out of our budget and we'd have everybody covered. We've got to learn from Canada and Europe. There are things that other people can teach us. America is not always right at all, and in fact this is one of those issues where we have to move to universal health care for everybody. Single-payer system, that's what we advocate and that's why the whole world is watching. Why America? Because of a (unintelligible).

BUSTAMANTE: Well, I actually agree with Peter about universal health care, but we're in a budget situation where I don't think we can get there. I do believe, I do believe also that SB2 is probably the most important piece of legislation that has not yet been signed by the governor. I think it is very important because it would provide one million working people health care in California. It's probably the most significant piece of legislation I believe that is going to come out this year in California.

HUFFINGTON: As for the John Burton thing, there is nothing good on cost control. And that's the problem with these half-baked measures out of the Legislature. That was the problem with workers' comp. This is the problem again now. I don't believe we should implement another thing that does not include cost controls. (unintelligible). It's another half baked measure But ultimately we need universal health care and the only reason we don't have it is because of the millions of dollars being paid by insurance companies and the medical industry to politicians, and that ultimately is the only reason. If that were not the case, we would have universal health care by now. You know what is the only state that has universal health care? Maine. And you know why? Because it has introduced a public financial campaign limitation. And that is why tomorrow morning I am introducing an initiative in Sacramento for publicly funded campaigns. There is no other solution to break the hold of special interest.

MODERATOR: What is your solution to California's health care problem, Mr. Schwarzenegger?

SCHWARZENEGGER: I think first of all that it is very important we have as many companies bidding for (unintelligible) and make it available. What Cruz is suggesting, that to have health care and have the companies pay for it, they cannot do it right now. We have really a crisis here with our companies, with our businesses, because they are overburdened as it is right now with workers' compensation and with Medi-Cal and all those kinds of things -- high electricity costs that are much, much higher than anywhere in the nation. They cannot afford it. What you will have then is no jobs, no businesses and no health care. What we need to do right now is protect the businesses and protect the people so they have jobs. It doesn't surprise me that this comes from you because you've never run a business. I am the only one here that has run businesses, developed them and met the payroll and has paid for workers' compensation and taken care of the health care of the employees. You have never done it. It's easy for you to sit there because you are only used to signing the check on the back, but not on the front. You've never signed in the front. So this is what you have to do. You have to realize that.

BUSTAMANTE: I understand. I'll just have a very brief response. You know, when you have a mega-corporation, the biggest in the history of the world like Wal-Mart who are underpaying their people and then as a result give them official documents to go and apply for food stamps and public health care. That's a burden that taxpayers can't afford any longer either.

MCCLINTOCK: I think there's a much better way to do it and it's not SB2, which requires businesses to provide health care plans for their employees -- that the businesses own and the businesses control and are paid for through the lower wages of employees. The very first impact of that bill, Cruz, is going to be an awful lot people who are thrown out of work as businesses pare back their payrolls to avoid the threshold that triggers that obligation. I do believe that we ought to have a society where everyone has access to health care. Unfortunately, I believe we can do that in a much more rational way through a simple tax credit on a sliding income scale that will bring within the reach of every California family a health plan of their own choosing and selection that they will control. They don't have to worry about losing a job or staying in a dead-end job because they have to keep their health care. If your employer chose your grocery store for you, I'll guarantee you two things: It will be cheap for the employer and it will be very inconvenient to you. And health plans are no different. We've got to bring within the reach of families again control over their own health plans. When I proposed that as an alternative to the Healthy Families Plan, the legislative analyst's office reviewed it and said we could provide much, much broader coverage at much lower cost than the bureaucratized system that was ultimately offered.

MODERATOR: I've thought of something to make this a whole lot more controversial in the area of health care. So why don't each one of you tell us how much money the state of California should spend on health care for the kids of illegal immigrants? Who wants to go?

BUSTAMANTE: I'll go. I'd be more than happy to deal with that immigrant issue because I think that you know the one thing you shouldn't do in life is take it out on the kids. It's not their fault that their parents are here. Let's put that aside for a minute. The people who are here. You know, I know, that sometimes people think that their food comes from Safeway or Ralphs, but it really doesn't. It comes from 70 percent of the people who pick our food and put it on our table are these immigrants. They are also the same people who work hard every day. They pay their taxes. They stay out of trouble with the law. Thirty percent of the construction, 40 percent of the hotels, all these folks who are here, who are working, they are taking care of their families. They are paying taxes. You know, for them not to be able to have a driver's license or to be able to put their kids in school is just plain wrong.

CAMEJO: I just want to say this, the people we are talking about are the lowest paid workers in California who work the hardest, who pay taxes and receive almost no benefits. They are essential to our economy. We loosely use this word, I think totally inappropriately, illegal. No one is going to arrest them. If somebody is illegal, you arrest them. But nobody is going to arrest them because they are essential to California. Everybody knows they are here to stay. They are part of our family. We have to end this apartheid system that we have toward them. They are part of our community and are essential to our economy. I really object to this term illegal. I mean, you know, in the first debate I referred to who came over here totally illegally and it was European Americans who came over here. But they are here. So give them a driver's license, give them their rights. I'm not going to object to that. But these are the people of the indigenous people of this continent. Let's understand that if your economic situation was the same as theirs, you would do exactly the same thing. People all over the world are moving through borders to try to feed their families. Let's look at this as a human problem we face, not as criminality. These are part of our families. We need to help them and work with them and give them medical insurance and the cost that will come about, they are paying for it because right now they are contributing as taxpayers.

SCHWARZENGGER: We have to make sure that every child in California is insured. That is the most important thing. I'm very passionate about children's issues. It is very important because they cannot fend for themselves. The children, we have a healthy family program here in California, and it is a very, very good program (unintelligible). The only problem with the program right now is that only two-thirds of the people that are eligible are not having this health care. And because the government has not done a good job in reaching out and finding the people and letting them know to sign up and find easy ways for them to sign up. Two-thirds of the people that are eligible do not have the child care. It is really terrible. If I become governor l would immediately go out there (unintelligible) and get it out so everyone knows about it and every one signs up because we must insure our families, the low-income families, especially the children.

HUFFINGTON: I'm very glad that Arnold is in favor of providing health care for illegal immigrants. That's really good news because you did vote for 187. And also I'm really glad that you say that because you have also come out against licenses for undocumented immigrants. There is a bit of a contradiction here. In fact, I was really saddened that you are an immigrant who has come out against giving the basic right to immigrants here like trying to drive to go to work or take your kids to school. It's all very well that that you say you are for children, you want them to be insured. But if their parents cannot legally drive them to work in a way that they are insured and safe, don't you think that is a bit of a contradiction?

SCHWARZENEGGER: Arianna, again, as usual, you are off here. We are talking about health care and you are talking about driver's licenses.

HUFFINGTON: But they are connected.

SCHWARZENEGGER: I am against the driver's licenses because it is (unintelligible) Therefore it is dangerous to the security of California. Governor Davis came out about a year ago, had made it clear, has said we cannot do that because it is dangerous. It is a security problem. Notice now because there is an election coming up on Oct. 7, now all of a sudden he says let's get some more votes. That is the idea of this thing. It is wrong to do that. And he knows we have a security problem. The governor is supposed to represent the people of California not special interest. That is the problem.

Next Page......