out of the top ten cities in america to do business. >> the governors of both states are in the crossfire tonight. martin o'malley of maryland and governor rick perry of texas. the first question to you, governor perry. in your ads, you say, think texas. i want to think about a couple of statistics from your states. you have the highest number of uninsured, one of the highest poverty rates and none of that appears in your ads. i'm curious why. those are things that i think businesses would want to know. >> i think it's interesting you want to cherry-pick numbers out there. we never thought in texas that you judge success by the number of people on public assistance. we made the decision that we don't want to force people to have to buy insurance. they have access to some of the finest health care in the world with the texas medical center there, one of the largest medical establishments in the country. the idea that we're going to

make people buy insurance to be a part of texas -- we're about giving people freedom, freedom to make decisions. when you see places -- or companies like facebook, ebay, some of the -- apple, soon to be one of the largest employers in the city of austin, caterpillar, every engine manufacturer in the united states is now in the state of texas. when you see toyota decided to build every pick-up truck in america in the state of texas, they didn't come there if they were worried about whether or not there was not going to be a skilled workforce and the people were going to have health care. 95% of all the wages in texas are above minimum wage, 95%. >> one out of ten minimum wage workers in the country live in texas. and when you talk about -- >> i think the issue is this -- i also want to talk about opportunity. for the uninsured, where is their opportunity to afford health insurance if you're not providing them the opportunity to get health insurance.

>> the real issue is give people the freedom of whether or not they want to have a good job to be able to take care of their family first. if you don't have that first, then their only alternative is some government assistance program. >> but those on minimum wage can't afford health insurance. and the other piece of the argument, if you don't have insurance, you can't afford insurance, the only way you can get health care is to show up at the emergency room. what about the freedom of people paying their premiums every month? they're paying for the uncompensated people showing up at emergency rooms. >> i want to talk about the minimum wage jobs that you want to focus on. sounds like you'd rather have no job than a minimum wage job. >> no, definitely not. >> let's talk about the number of jobs created in the state of texas. 30% of all the jobs created in america were created in texas in the last ten years. some of those were minimum wage jobs. but if you know the statistics,

40% of individuals that have minimum wage jobs are out of it and moving up in the first year. 80% of them after the second year. you have to have these minimum wage jobs to get people in the workforce and then they work their way up. that's how it works. we also have the number of highest paid jobs created in america. >> let me ask governor o'malley, you wrote an interesting piece the other day -- >> thank you. >> interesting dialogue. one of the challenges that i'd like to have you comment on is, one of the things which gives your economy a unique position in the country is you have places like montgomery county where you have federal employees who are averaging $95,000. federal workers in the washington area are among the highest paid workers in the country. doesn't that put you in a very different kind of box than any other state because of the sheer number of federal workers who are being paid by the whole country but who are able to live in three or four of your key counties?

>> we certainly have competitive strengths and we have competitive advantages and we build on those. but 90% of our new job creation in maryland have come from the private sector. they are i.t. and cyber that want to be near places like ft. mead. and i'm proud of the federal employees who do the jobs in science and security and they are certainly well-trained people. the debate here is really -- i think the governor has it half right. i think job creation is critically important. there is no progress without a job. but we have to be about building an economy from the middle out, an economy that creates middle class opportunities. an economy where we're strengthening that talent pipeline, improving the skills of our people and able to actually create more and higher jobs. one of the key differences between our two states is that our state was ranked among the top three in upward economic mobility.

texas was ranked among the worst states in terms of downward economic mobility. >> as an objective fact, texas has gained 440,000 people. maryland has lost 20,000. if we're having all this upward trajectory, why is texas doing 22 times better in population migration over the last five years than maryland? >> actually, you need to check your facts. we've actually added 230,000 people. and we've actually grown by 4%. but that fact is dubiously put out by some -- >> this is the u.s. census. >> and people coming to texas are low-wage workers looking for jobs -- >> you're absolutely incorrect on that. how do you justify, say you have all these low-wage workers coming to texas when facebook, ebay, all of the technology companies, apple, caterpillar,

toyota, major manufacturers coming into the state of texas? martin's state lost 4,700 jobs in july. that's the fact. you lost 4,700 jobs in july. texas created 18,200. so this idea -- >> and in august, we created 9,700. >> there's a real disconnect here about the story that's gone on that we're hearing at this table and what the facts are. everybody in this country understands that there's something really fascinating going on in the state of texas and it's been going on for some time. how in the world would you -- what's the reasoning that you would give if the story that you're painting, stephanie, is even close to true, why would facebook, ebay, those major technology companies move to the state of texas if it was such a dark and ominous place -- >> i think governor o'malley wants to answer. >> it's great that you have those companies in texas. we have great companies in

maryland. and they're great companies. but the fact of the matter is we have the number one median income in the country. you have the 25th median income. your state is tied for last place, along with mississippi now, in the percentage of your people who work in minimum or less than minimum wage jobs. that's not an economy that is actually lifting up the middle class and expanding economic opportunity. we made college more affordable. you made college more expensive -- we've made our schools the number one in america for five years in a row. >> you're trying to say that texas and maryland are the same are talking a lot like -- >> oh, no, they're very different. >> they truly are very different. you led the nation in the creation of government jobs in

2008 to 2012. >> not true. >> yes, you did. that's factual. next door to washington, d.c. is a pretty good draw. but at some point in time, this issue is really about who has the best idea about how to grow america, how to put americans to work. and it's the private sector. >> i agree. 90% of our jobs have come from the private sector since the bush era -- >> but your job growth has been abysmal compared to states last texas. >> last year we led the region -- >> we had this dialogue earlier about low-paying jobs. i want to ask from that perspective, the city of baltimore, one out of every four people is in poverty. wouldn't they be better off to have a job, even if it was a minimum wage job? >> oh absolutely. there's dignity in all work. every job is important. this year, we moved more of our

citizens from werfel into work. that's important. but what i'm trying to underscore here, newt, is that there's a mix required. you have to not only cut your budget and be willing to be fiscally responsible, you have to be willing to make the smart investments that actually improve the levels of education for your people, improve their skill. we have the third best talent pipeline of any state in america. that's according to the u.s. chamber of commerce. we rank number one in innovation and entrepreneurship. we believe that you need to educate, you need to innovate, you need to rebuild and need to give your next generation the opportunity to move up the ladders of success, not simply to see their wages decline, which is what's been happening in our country -- >> absolutely not correct, that is not correct if you're

pointing to texas with that. when you look and see what we've done in your public schools in the state of texas, particularly over the last decade, we have seen the national assessment of educational progress, that's kind of the gold standard, i think you'll agree, when you talk about how kids are doing in school. eighth grade african-american and eighth grade hispanic kids in the state of texas scored the second highest in america. that's the type of progress you're looking for, particularly in the areas that people care about, which is those stem courses in where you're moving them into college. we've had almost 500,000 young hispanics access higher education in the state of texas from 2000 to 2011. >> and the second to worst dropout rate in your high schools. >> our graduation rates are 86% in the state of texas. in maryland they're 83%. that's less than 86, governor. >> look, i think that we're throwing a lot of statistics around. i want to change course a little bit.

today the chamber of commerce put out a letter asking house republicans to stop playing games with the debt limit. you previously told house republicans no to raise the debt limit. is that still your opinion? >> it is. they need to address the spending issue. americans realize that one of the great problems that we have in this country is this massive debt that's been created. multi generations -- >> the business community versus republican politics, that's where you're coming down? >> i'm coming down with the people of the united states. >> even though you've increased your debt by 300%? >> the bottom line is we've been growing at a state. we've got a bond rate as high as -- >> and your debt. >> the debt in the state of texas is one of the -- per capita -- our debt in the state of texas is one of the fourth lowest in the country. so the idea that we've increased

debt versus our ability to be able to pay it off and what we're doing in the state of texas, again, you're apples and oranges on -- >> the numbers are the numbers. but we're going to take a quick break. one person at this table is turning down billions of dollars of money to help his state citizens. i'll ask him why next. dad! dad! katy perry is coming to town. can we get tickets, pleeeeease??? tickets? hmm, sure. how many? well, there's hannah, maddie, jen, sara m., sara b., sa -- whoa, whoa. hold on. (under his breath) here it comes... we can't forget about your older sister! thank you, thank you, thank you! seriously? what? i get 2x the thankyou points on each ticket. can i come? yep. the citi thankyou preferred card. now earn 2x the points on entertainment and dining out, with no annual fee. to apply, go to citi.com/thankyoucards [ male announcer ] some things are designed to draw crowds.

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maryland democratic governor martin o'malley and texas republican governor rick perry are in the "crossfire" tonight. what i most want to ask, governor perry, is about health care. as i said in the break, i'm sure you've been asked this a million times. so the answer should be great. you've been very critical of the president's health care law, now the national law on health care. yet one in four of your citizens are lacking insurance. they can't get the care that they need. you are refusing to implement the law or take any of its funding. how do you rationalize that with your own citizens? >> i think you're wrong in your synopsis there that you say they can't get the care they need. they have access to health care in the state of texas. we made the decision in the state of texas that this is how we're going to operate our state that we don't count as a big success, the number of people that you put on government assistance, we allow them the freedom to -- >> where are they getting their care? >> they get health care in a

multitude of different places. >> did they pay for it? >> some do, some don't. but the fact is they do have access to health care. it's a bit of a misnomer for them to say they don't get health care. we don't want to participate in obama care. we know it's a broken system, even the expansion of medicaid was one of those things that we said we're not going to participate in. the reason is because even the president himself in 2009 said medicaid is a broken system. and i agree with him, medicaid is a broken system. and why would we want to put thousands -- tens of thousands of people on a system that is broken because it would be tantamount to putting another 1,000 people on the "titanic" knowing how that's going to turn out. >> if you did, you'd cut your uninsured rate in half, including hundreds of thousands of veterans who are lacking insurance. >> if we were to put $18 billion over the next ten years is what it's going to cost the state of

texas, $100 billion in total costs is what medicaid would cost the state of texas in the next ten years, we would only see 3% drop in the uninsured rate in the state of texas. so the idea that you're going to put -- >> i don't think that that's accurate. the other thing is, you are talking about -- for the one in four texans lacking insurance, maybe some of them could afford to buy insurance and they're choosing not to. but many of them cannot afford it so they don't have insurance. >> they have access to health care. i think the idea that -- the left wants to say everybody has to go get insurance. >> regardless of that, though, they are showing up at the emergency room to get their health care. >> the people of the state of texas have made the decision that that is how they would rather run their health care system rather than allow for washington, d.c. -- >> the cost of that falls to local communities, hospitals,

people with insurance are carrying those without the insurance. but if you implemented obama care, all of that cost would go down. >> i suggest to you that the cost -- why are the unions standing up and saying that they're against obama care now? the unions which were one of the strong supporters of obama care through the years? we heard, you're going to see your premiums go down by $2,500. we know they're going up by $3,000. you said you're going to be able to keep your doctors. we know that's not right. the whole premise of which obama care was sold to the american people, even the labor unions are saying, you know, we don't think we want to participate in this. thank you very much. >> let me ask governor o'malley about that. you are a strong supporter of the president. and you run a government, so you understand the importance of actually running something. obama care so far has missed 41 out of 82 deadlines. and we're coming right up on october 1st. doesn't it trouble you that there are that many different parts of the system that are

literally not meeting the -- for example, they have no check on who's going to apply to get money from the government and they're going to rely on, quote, an honor system. somebody who runs a government, balances a budget, doesn't that well, i think we were talking when i was listening to the governor earlier, talking about a broken system. what we have right now is a broken system. for our part in maryland, i can't speak to the 41 misses in the federal bureaucracy, but i can tell you we've decided to be an early implementer of the affordable care act and we know there's going to be hiccups. we know this won't be easy. but we also know that it's crazy that to part with 17% of gdp for our health care, no other industrial nation does that. when i was a boy it was about 5% of gdp for health care. so we believe we're going to have a competitive advantage on states like texas that don't implement this. >> so i'll ask you two other

questions. one is you just saw walgreens announce that they're dropping their corporate insurance and will give people money to go out and buy their own insurance. doesn't that concern you when you see big companies like that in essence saying to people we're now going to dump you onto the exchanges, good luck? doesn't that change what has been the number one insurance model for the whole country, which was an employer-based system? >> sure, it's concerning. and we need to be able to be willing to adjust and make changes as we move forward with this. if this were easy, we would have done it long ago as a country. for our part, though, we will be meeting the deadline come october 1st. we have a lot of smart people working to implement the exchanges and we're moving forward, not back. we're excited by the challenge. we know also, we think this. we think we are actually going to be able to increase our competitive advantage and even more people will start businesses when they don't have to worry about losing their health insurance if they move from another plan. so we're excited about what this

can do for our competitiveness. >> do you think in that model, walgreens and others and in your own state two community colleges have announced they'll have shorter time periods. i think ocean city government has announced they have shorter time periods so they have fewer people who are eligible because they keep them under 30 hours a week. i think a major corporation has also done that. do you think it would also be fair then for state and federal employees to have to go to the same exchanges as the same employees like walgreens? >> i suppose if their government dumped their health insurance -- >> walgreens, just to correct the record here, walgreens is going into a private exchange. it's pathology its coverage with other private businesses. if they have the ability to lower costs and provide better care, why shouldn't they be allowed to do that. >> they're not going to provide group insurance. >> but their costs will go down. >> from the standpoint of a couple of governors who have the responsibility to make decisions in each of our states, wouldn't

you rather have the flexibility that washington, d.c., basically said, listen, we think maryland knows how to run the health care in the state of maryland. that's what i've been supporting the idea of block granting back to the states. we could never get the federal government to allow us to do -- >> the law actually allows you to do that. >> not as far as block granting goes but we've asked multiple times to have the ability to allow texas to set its own program into place. we think we're very capable, and i think you're capable of making those decisions better for maryland decisions than somebody in washington, d.c., with a one size fits all. that's my problem with obama care. it's washington, d.c., forcing the states to meet all of these standards and that's why we've said no, thank you, we're not going to participate with this. we're not going to be involved in the exchange. >> we haven't had that

experience. we've found hhs has been very responsive and we do receive the flexibility. even if we differ in capping it and block granting it and not letting people sign up. a lot of the other governors are receiving the flexibility. but if you don't want to do it, you know, you're not going to do it. >> that's going to be our choice. we're not going to sit there and allow for washington, d.c., to make decisions for how health care is delivered in the state of texas and bankrupt our state, because we've run the numbers. we think there is a clear path towards the bankruptcy not only of our states but of this country if this goes into place the way that it's set up today. >> you should come to the national governors association meetings again. i know texas seceded but you might be able to learn from some of the other governors implementing this, doing it well and actually doing a better job of supporting an innovation economy and their workers' well-being. >> well, the bottom line will be

by seeing which of these states success as we go into the future. right now on job creation, texas is leading the march. >> on schools and median income, maryland is leading the march. on innovation, maryland is leading the march. let me ask you both to stay with us. next the results of our fire back question. would you rather live in maryland or texas? just by talking to a helmet. it grabbed the patient's record before we even picked him up. it found out the doctor we needed was at st. anne's. wiggle your toes. [ driver ] and it got his okay on treatment from miles away. it even pulled strings with the stoplights. my ambulance talks with smoke alarms and pilots and stadiums. but, of course, it's a good listener too.

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welcome back. tonight we're talking about the governors of texas and maryland, which leads us right to another fire back question on facebook or twitter. would you rather live in texas or maryland right now? 54% say maryland, 46% say texas. and before we close out, i just want to point out one thing. i think i'm the only one sitting at this table who has never thought about running for president. am i right? i'm right. >> i don't know whether you've ever thought about it or not. >> let's assume the answer is yes. the bedate continues online at cnn.com/crossfire as well as facebook and twitter. from the left, i'm stephanie cutter. >> from the right, i'm newt gingrich. join us tomorrow for another edition of "crossfire." "erin burnett outfront" starts right now. outfront next, breaking

news. the dow surges to a record high, but washington may bring it crashing down. and then the man responsible for 12 murders. you know he heard voices, thought he was being followed, reportedly suffered from ptsd but he still got security checks. was it an oversensitivity to mental issues that did that? plus his mother today spoke out for the first time. you're going to hear what she had to say. police find two cars in a muddy lake with bodies inside, a lot of bodies inside. and these cars, you won't believe it. have they just solved a 40-year-old mystery? let's go outfront. good evening, everyone. i'm erin burnett. outfront tonight we begin with the breaking news. a record high stock surge today. the dow jumping 147 points. now, the dow and the s&p closed at new highs. you know, i just think this is so significant. nearly