Meg Whitman, former eBay CEO
Source: AP
Meg Whitman, former eBay CEO

When: Today, Friday, October 15th

Where: CNBC’s “Your Taxes, Your Vote: Countdown to the Election”

Following is the unofficial transcript of a CNBC interview with California Republican gubernatorial candidate Meg Whitman on CNBC’s “Your Taxes, Your Vote: Countdown to the Election” today, Friday, October 15th at 7:30pm ET. Excerpts of the interview will run throughout CNBC’s Business Day Programming.

All references must be sourced to CNBC.


JOHN HARWOOD reporting: Meg Whitman, thanks so much for being with us.

Ms. MEG WHITMAN: Happy to be here.

HARWOOD: In your book, you talk about a part of your professional life that was before eBay, when you were at FTD, and you said at one point before leaving, `This company isn't fixable, at least not by me.' Why shouldn't anyone who's looked at the recent history of California conclude that's exactly what you...?

Ms. WHITMAN: Well, California's a huge challenge, no question about it, but to really--the thing we have to do, first and foremost, is we've got to get Californians back to work. We've got a 12.4 percent unemployment; 2.3 million Californians wake up without a job every morning. And if we don't get people back to work, we will never have enough tax revenue from personal income tax or corporate taxes or business taxes to invest in the things we really care about. So job one is getting people back to work, and I've got exactly the experience that we need to do that. I mean, I've been in the business of creating jobs. My opponent has been in the business of politics for 40 years. So I really understand, you know, the needs of small business and what we need to do to keep jobs in California.

HARWOOD: So how do you do that when you've got--you walk into a $19 billion deficit hole from the get-go?

Ms. WHITMAN: Yeah. Well, the budget plan, first you've got to work the revenue side, right? We've got to get Californians back to work. But then I've identified $15 billion of savings that will, frankly, I think make California stronger, not weaker. And I'll tell you the categories they fall in. First is we do have to shrink the size of government. We have too many people who work in government. Second, we've got to reform the public employee pension crisis, which is in many states, not only California. But this will cause California to run out of money if we don't fix it. I'll give you a little statistic. In 2000, we spent $300 million to support the public employee pension. This year it's 3.9 billion. Then we have to reform welfare. We've become a welfare state. Twelve percent of the population, a third of all the welfare cases. And then we really need to run this government more efficiently and effectively. Using technology would be a place I'd start.

HARWOOD: But now don't you think that if it were as easy as cutting wasteful and obviously frivolous programs, that it would've been done long ago by Governor Schwarzenegger and others?

Ms. WHITMAN: I bring, I think, a unique expertise to this. You know, in Silicon Valley, when we have a problem we can't solve, we figure it out. We go around, we go underneath, we use technology to do things that haven't been done before. We haven't even begun to use technology to make the government run more efficiently and effectively. For example, to find the fraud, $3 billion to $4 billion of fraud in the administration of Medicare and Medi-Cal. I mean, can you imagine? So there are...

HARWOOD: Don't you think Governor Schwarzenegger wants to get rid of fraud, too?

Ms. WHITMAN: He does, but he, you know, he and I have quite different backgrounds. I mean, I applaud Governor Schwarzenegger on many dimensions. He did a number of good things, but hadn't had the experience of running a big, large organization where you have to focus people on doing a small number of things well. And boy, my technology expertise, I think, is going to make a big difference here.

HARWOOD: Talk a little bit about the fundamental difference, though, between working in the public sphere and working in business. I was reading one of the profiles of you in the--someone who had watched California politics for a long time said she's going to be shocked to discover how powerless a governor is compared to how a powerful CEO is in a company.

Ms. WHITMAN: Well, the government should never be a business, and it isn't. But I think there's lots of things that we can apply, managerial expertise, that will help put California back on track. I mean, what we have here is a crisis of very significant proportions and what I can tell you is doing the same thing over and over again and hoping for different results isn't going to get you here. So I think there's a lot that I bring from the private sector, bringing people together, focusing on a small number of things, doing things in ways that have not been done. And, you know, California's been on a downhill slide for many years, and we're going to have to fundamentally change how we do things.

HARWOOD: You said that you've got to get the revenue side in order.

Ms. WHITMAN: Mm-hmm.

HARWOOD: Every single, at the national level, big deficit reduction package by President Reagan, by the first President Bush, by President Clinton, has involved tax increases, revenue, as well as spending cuts. Is the better part of honesty and candor with the voters of California to say that's what you're going to have to do as well?

Ms. WHITMAN: I don't believe we are going to have to do that. I am against increasing taxes on Californians.

HARWOOD: You can close a $19 billion budget deficit simply by cutting spending?

Ms. WHITMAN: And growing the economy. What we need is a bigger economy, not a bigger government, and so if we can get Californians back to work, bring unemployment down, that will increase tax revenues and then we have to, as I said, we have got to take a look at every line-item in this cost of the state of California, and we're going to have to run it more efficiently and effectively. The truth is, we have a government we can no longer afford and Californians are overtaxed. We have among the highest sales tax, the highest personal income tax, the highest business tax rates. And part of our economic problem in California is we're not competitive to neighboring states. You know, I know what it was like as a CEO, you look over the landscape and you say, `What's the easiest, best, simplest and cheapest place to do business?' California doesn't win on most of those dimensions today.

HARWOOD: But why shouldn't one of our viewers listening to this interview, in hearing you say, `We're going to cut waste, we're going to cut welfare. We don't need to raise taxes. We can cut the budget deficit by growing the economy while cutting taxes,' say, `Yeah, she may have--used to have been a straight-talking CEO, but she's totally a politician now.'

Ms. WHITMAN: Well, I'm not a politician. I've, you know, been in business for 30 years. I mean, I am a fiscal conservative, and that is born out of 30 years in business, deeply understanding you simply cannot spend more money than you take in. Deeply understanding, you know, how we can do more for less. That's what the private sector does. That's not what the government does, and we need a different approach. And there is absolutely a way forward here. You know, look at what Chris Christie has done in New Jersey. He had a worse budget deficit as a percentage than we had--than we have. Look at, he's reduced costs, he's, you know, streamlined the bureaucracy, and he's closed the budget deficit. And that's exactly what we're going to do in California.

HARWOOD: Governor Pete Wilson's former speechwriter said, `She's been spending $2 million a week on generalities.' True?

Ms. WHITMAN: Absolutely not. I have the most specific plan to get California turned around of any political candidate, I think, in many, many years. I've got a book that talks about my exact plan to create two million new private sector jobs, a very detailed plan to save $15 billion.

HARWOOD: But every analysis of the race I've seen says that you and Brown both have ducked specifics on exactly how you're going to close that budget gap.

Ms. WHITMAN: Absolutely not true. I have been so specific, far more specific than my opponent, Governor Brown. He has no plan. In fact, the other day he said, `The process is the plan.' Well, if you like the process in California right now, in Sacramento, and the complete dysfunction of that state government--you know, the budget was 111 days overdue--then Jerry Brown is your candidate.

I've got a very specific plan because what I know is, in a crisis, you've got to focus on doing a small number of things well. I believe you can't go to Sacramento and try to boil the ocean. You've got to focus on a small number of things because there's lots of people who want to stop you: the Democratic legislature, the bureaucracy--which is completely out of control in Sacramento--and the entrenched interests. So you've got to focus like a laser, you've got to get the right appointments in your administration, and you're going to have to work productively with the California State Legislature, which I've got a plan to do.

HARWOOD: Sarah Palin used to talk in 2008 about how, in Alaska, she had taken the state plane and put it up on eBay. Now there was a problem or two with the telling of that story, but when you look at California government, what goes up on eBay, what gets privatized?

Ms. WHITMAN: Well, we have to look and say, first of all, we have a government we can no longer afford, and we've got to look at everything to reduce the costs. And, in California, we have hired over 33,000 people from just five years ago when, by the way, the revenues of the state were about the same. So how can we shrink government, use technology to do more with less. There are opportunities, I think...

HARWOOD: So less for schools, less for roads, less for prisons, less for police?

Ms. WHITMAN: No. No. I'd say, first of all, less people. We've got to get the pension program under control, we have to reform welfare, and then we have to manage it better. Let me give you an example, the Bay Bridge. We needed to do seismic repairs for the Bay Bridge. The budget was $1 billion. It came in at $5 billion. In the private sector, if that happened, you would lose your company, you'd lose your job. In Sacramento, everyone just blames the other party. So there's lots we can do here to run this far more efficiently and effectively and then give us the capacity to invest. The challenge that we have in California right now is because revenues are perennially less than cost. We have no capability to invest in infrastructure. The water bond is the perfect example. We need to invest in the water infrastructure in California. We have no money to do it right now.

HARWOOD: How do you grade your own investment on the campaign?

Ms. WHITMAN: Mm-hmm.

HARWOOD: You've spent an awful lot of money. What sort of metric have you used to evaluate what's worth it and what wasn't? Or do you simply say to your consultants, and I know you've got some very good ones, `Whatever you say, guys, we're doing it.'

Ms. WHITMAN: So, at the very beginning of this campaign, we laid out a strategy to win. And we, you know, got very detailed on policy, created a very detailed plan to turn California around. But what I can do here is get my message out and give Californians a choice. I'm up against a career politician who has one of the best-known names in California politics. This is his 14th election. He's been in office for 40 years, and I also face huge amount of money from the unions. Over the last four or five years in California, they've poured $300 million into controlling politics in Sacramento. So what I've been--what I've been able to do is get my message out, give voters choice. And it's a very stark choice this time in terms of who they think will be the best to govern California.

HARWOOD: Public polls indicate you're a couple points down. Do you think you've gotten exactly what you've paid for?

Ms. WHITMAN: You know what? In a state where we have 2.3 million fewer Republicans than Democrats, I'm happy to be in--where we are. This is a dead heat race. It's going to be a dogfight to the end. But you start 2.3 million votes short of where a Democratic candidate starts. And, of course, I had a very contested primary. Jerry Brown had no primary at all. So I'm happy with where we are, and we're going to spend the next 20 years looking for votes in every part of California.

HARWOOD: Two things, quickly, before I let you go. The first is, you know, there's a reason why some people go into business and some people go into politics, different set of motivations, different skill sets. Nobody doubts that you're smart and you were successful at eBay, but is it possible that the string of controversies that have been thrown up about you, issues with employees and the housekeeper and all that sort of stuff, suggest that, at the level of the personal touch, the emotional intelligence that really successful politicians have to have, that that's not what you're good at?

Ms. WHITMAN: You know, I guess that's going to be up to the voters in California to decide. I've spent, you know, 30 years in leading teams of people, bringing people together. I led a community at eBay that, you know, was 80 million unique visitors a month strong, and so I think I understand what California needs to turn itself around. I know how to bring people together. I know how to create a shared sense of vision and values, and I know how to create confidence in people. And what California lacks right now is confidence. Every place I go, people say, `Can California actually be fixed?' It can be fixed. It's going to take a different approach, but we have a great state. And you know what, it matters to the country because where goes California goes the US.

HARWOOD: Clearly the issue that's dominated the race the last couple of days is this "whore" comment...

Ms. WHITMAN: Yeah.

HARWOOD: ...that an aide to Jerry Brown made. I want to go back to the idea of you as a straight-talking, no B.S. businessperson. If that's who you are, realizing the way that word is used colloquially, why don't you just step up and put it to rest and say, `This is silly. It's not an issue. I'm not insulted by it. So many things in politics people pretend to be outraged because they use it, that's old politics.' Why don't you get rid of that?

Ms. WHITMAN: Well, I think what you're seeing in California is old style politics, which is personal attacks and slurs, that is not befitting to the people of California. And I think those are...

HARWOOD: That was a recorded telephone call with somebody who was not attempting to put that out in public at all.

Ms. WHITMAN: Well, I think your personal conversations, of course, reflect, you know, who you are and the kind of campaign you're running. But, listen, I agree with you. I think voters want to talk about the things that are going to make a difference. While all this has been going on, unemployment has gone up, not down; we haven't gotten better schools; we haven't cut one dollar out of, you know, government spending in a way that's really meaningful. So my view is, I want to get back to talking about the issues and--because I think this is a very serious election. Californians, have a very big choice in front of them: `Which direction are we going to go? Are we going to be led by someone who has a fresh approach, brings an outside-in perspective?' You know, California and America was supposed to be a citizen democracy, wasn't it? You know, that you would serve, maybe, in the real world of the private sector, have some common sense and bring it to make government better and that's what I want to do here. I know we can restore the California dream, but the choice is between that and a 40-year career politician who's never spent a day in the private sector.

HARWOOD: But just to clarify, in that spirit of getting back to the issues...

Ms. WHITMAN: Yeah.

HARWOOD: ...are you willing to say that you know that Jerry Brown was not attempting to slur you in that way and that you're not insulted by it?

Ms. WHITMAN: Hey, listen, that's going to be up to the voters of California. You know, I think I deserve better, I think the voters deserve better, but each and every Californian is going to have to make a determination as they look at both our campaigns and both our candidacies and say, `Hey, who do we want to lead the state for the next four years?'

HARWOOD: Meg Whitman, thanks so much for being with us.

Ms. WHITMAN: Thank you. Nice to see you.

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