the election. watch "road to the white house" sunday at 6:30 and 9:30 p.m. eastern and pacific. >> maryland governor martin o'malley and governor rick perry are next. they disagree on a number of fronts. >> thank you, everybody, for joining us. this weekend we have most of the 50 governors in town to talk about policy, to talk about what's happening in the state.

it's a great moment for them to be here. it seems like most of the energy, most of the political action in the state is driven by governors, including in my home state of wisconsin where i thought i'd never see the day that something other than the packers crushing the steelers would get this much attention. we are honored to have two of the most influential governors here today. we have the head of the democratic governors association, maryland governor martin o'malley, and republican governor association chairman rick perry, governor of texas. we're going to have a conversation here led by jonathan martin. two housekeeping items before we get-going. one, there's cards by your chairs where you can write questions and ask them of the governors later in the day. and also, there's information for the hash tag, which is state solutions to engage in the conversation on twitter. so i'll turn it over to jay martin.

thank you, governors. >> thank you for joining us here on a rainy morning in washington. let's get straight to the news, and that is, of course, what is taking place in madison and in wisconsin. governor, what lessons do you take away from what has happened there in madison, looking at the standoff now going into its second week? >> i guess the lesson i take from that is one i learned when i was mayor of the city of baltimore, which is when you're facing tough challenges, when you have to overcome things like the imbalances in the pension system, i think it's best to bring people together to do that. i think when you try to vilify or make one side of the equation the enemy, i think you're asking for trouble. we all know we have to go through a time of readjustment, but i think the best way to do that is to bring people together. we're asking our public employees in maryland for many of the same -- we're not asking them to give up their right to organization or have their voices. >> the pension fund in maryland

is having real problems. >> right. we inherited two big deaf fits, if you will. one was on the operating side, the other with the pension system. so we're asking our employees right now -- and they're not happy about it, but they're at the table. we're asking them to pay for in their crngs, the state will pay more in its contribution. but these are the things we need to do in order to be fiscally responsible and move the state forward. >> governor perry, is he doing the right thing in wisconsin, and if you had any advice to offer him, what would you say? >> well, keith russ -- we got 50 laboratories of innovation out there. i hope you all have bought the book and absorbed -- >> very fast plug. >> the messages. you'll hear it more than once. [laughing] my point is we're 50 different laboratories.

and, frankly, for me to tell martin how to run his state or for him to tell me thousand run my state is a -- me how to run my state is a little over my perspective. the key is you believe what you believe. we have elections. i didn't get confused on what they were saying on the second day of november from texas. they said we want you to have leaner, more efficient government. they may not tell martin that. but that's what they told us in texas. and i think that's what scott walker heard. my point is, he knows what he believes in and he's expressing that. and the voters in wisconsin, they basically said this is the person that we want running the state. that first amendment is a beautiful thing. you know, they're out there expressing their free will and what have you. >> to get to the heart of the matter and to take a step back from just madison, too, we know in this room that public

employees, and more broadly, organized labor, are a key element of a democratic coalition. and in a lot of state parties it is the financial force, the force in terms of ground troops when it comes to election time. if governor walker succeeds here and is able in this legislation to sort of strip away the compulsive dues paying, that can be a real blow, governor o'malley, to organized labor and to democratic parties, right? >> i think it would be a blow to a lot of things. i don't know any c.e.o. in private industry who would take over an important -- >> there's politics here. right? >> sure. there's lots of politics. there's politics in the fact that tax cuts for the wealthy are always pushed at the top of the republican agenda at a time when wealth has never been more concentrated in the hands of 1% of our nation than it is now.

not since 1931. but i think beyond that is the importance of bringing people together in order to create jobs. the governor mentioned what did people tell us in the mid-term elections? i think they told us two things. one was we need to be fiscally responsible, reduce the size of government. but what i thought i heard was, we need to create jobs. we need to make sure we make the right decisions and the tough decisions now so that we can create jobs in this new economy. and i don't think the drama and the circus going on with this drive to eliminate unions, to punish unions, to take them out of political -- the political equation, i don't think that has anything to do with creating jobs. i don't think it helps to create jobs. and i don't think that it even helps to solve the problem of imbalances in pension systems. >> governor perry? >> we need to talk about job creation. we led the nation in job creation. >> do it.

>> since the entire decade of the 2000's. >> how? what did you do? >> well, it's pretty simple, really. you don't have to have a ph.d. from harvard in political science or in economics for that matter. you don't over tax. you keep a relatively low tax structure. you have a regulatory climate that is fair and predictable. you have a legal system that doesn't allow for oversuing, and you continue to have actable public schools which basically says to the job creators, you've got a skilled work force there. that's what we put in place for a decade in the state of texas. i've argued, and i'm quite proud of what we did in the state of texas -- people vote with their feet. that's the beauty of the 10th amendment. i got to say, i really don't want washington, d.c. telling us how to run our business in the state of texas. i think it is very clearly stated in our constitution about

the idea that the states have substantial powers. they are limited by the constitution. the 10th amendment is clear in giving the power to the state. and having the federal government tell us how to deliver health care, how to educate our children or how to have energy policy is very foreign to me. and i'll bet you martin doesn't want the federal government down here telling you how to run your state, in a lot of issues. >> do i want the federal government telling me how to run my state? no. but i don't want the federal government to be shut down. i don't want the federal government to stop defending my country. i don't want the federal government to stop investing in the research, development, innovation, education, the more affordable college that expands opportunity and creates jobs at a time when our whole world economy is changing. so i do believe that there are some things that are so hard and so large that we can only hope to tackle them together.

and i think our federal government is an important part of doing that. there was an article in "the washington post" today about some of the things that we're doing with regard to our health care labor in order to bring down the high costs of health care. all of these things are the things that people expect us to do, managing for results, reducing spending, so that businesses can be more successful instead of investing in rising health care costs that can create jofnlz and these are things that a functioning working government does. >> speaking of the feds, i wanted to ask about the federal stimulus. a lot of governors, g.o.p. governors had concerns. i think you were one of them. but basically texas used some of those federal dollars to fill budget holes. what was the impact of the stimulus for texas? >> before i address that, let me just say we take federal dollars. but the last time i checked, we sent a whole bunch up there.

as a matter of fact, we send more dollars to washington, d.c., than the state of texas gives back. we're what's called a donor state. i will tell you, you don't want to be a donor state, sir. it's not a good position. martin said something that was very important that i'd like for us to focus on in a moment. and it is that one of the main responsibilities of the federal government is to secure this country. and i think all of us realize that is one of the very important things that the federal government does. my dad, a world war ii veteran, he said the federal government is supposed to do three things, boy. they're supposed to stand in military. and we do that. we have the finest young men and women defending our country around the world and here at home. and he said they're supposed to deliver the mail. preferably on saturdays and on time.

you know, the key is -- i want to go back to the security issue. the state that i have the privilege to serve has a 1,200-mile border with a foreign country, with mexico. mexico is intertwined with texas. we marry each other. hell, they owned us at one particular point in time in our history. they're our number one trading partner. but today the mexican border is a war zone. it's every bit as dangerous, i would suggest, as iraq. another american citizen who happened to be a texan, was killed last week by the drug cartel. and our federal government, i can't get them to address what i consider to be and what our citizens consider to be one of the most important duty that our federal government has, defending the border against some very vicious thugs and terrorists, the zada's, the drug

cartels, etc. and i think it's going to get worse before it gets better, unfortunately, which really affects our economy. so it's not just about the security of our people, which is paramount, it's also about allowing our economy to continue to grow between two very important state and country. and the rest of the united states. >> both of you governors are facing deficits in your state. governor o'malley, i want to start with you what are you doing to close the deficit? and what has been the impact on job creation of the red ink that you're facing in maryland? >> we have gone time and time again in the course of this recession, which has impacted every single state in our union. we've gone time and time again to either the legislature or board of public works with more and more and more cuts. i think right now with the latest budget we submitted, we're up to $6.6 billion in cuts over the last five years. we've eliminated some 4,200 positions. all of our employees have had to

endure furlough days for the last three years so these are things we're doing towards the end of making our state more competitive in creating jobs in this new economy. i guess one of the fiscal discipline is critically important. and without it no progress is possible. but i believe that fiscal discipline is a means to the end of expanding opportunity. the governor mentioned the fact that his father who served in the world war ii -- mine did, too. where was yours? >> pacific, mine was in england. >> good staff. those men came back to the country that invested in the g.i. bill, raised the education levels, expanded middle class opportunity in ways we never had before. those are some of the things we can do together that are not only the right thing to do

morally for returning veterans, it's the right thing to do economically. so in our state not only have we made the cuts -- i want to underscore this. not only have we made cuts, we have increased our investment in education to name the number one schools in america three years in a row. and we're the only state to go four years in a row without a penny's increase in college tuition. why? because we know our education levels are tied to our economic future. >> an impact until the stimulus -- in the stimulus of maryland? >> hugely helpful. >> without the recovery and reinvestment dollars, every state capital in our country would have crumbled. there is no way that we could have avoided the second great depression had it not been for the recovery and reinvestment act dollars that kept us from slipping into the precipice. now, they were never designed to be a permanent thing. they were designed to bridge states. the governor used those dollars. i used those dollars. every state used those dollars in order to bridge us into this better economy.

>> now, every state has harp elbows when it comes to recruitment of employers, of going after jobs. besides sporting events, it's probably, you know, the most aggressive that you get when it comes to going after each other. governor perry, you in particular, targeted one state, california, when it comes to going after jobs. you go out there on hunting missions to try and find jobs i think you've ticked off some of the folks in california. there was a story from the "los angeles times" earlier this month that you may have seen about your efforts to go out to california. and they are now turning the tables and saying for all of perry's critique of california, texas, it turns out, is having problems, too. and this is what the treasurer of california told the "l.a. times" about texas and texas' financial challenges right now.

quote, someone just turn the lights on in the bar and the sexiest state doesn't look so pretty anymore." that's about texas. >> i don't have a problem with that at all other than it's wrong. competition is good. that's the name of the game. and putting programs in place to make your state look more attractive. martin has the maryland initiative. technology initiative. >> the invest maryland. >> invest maryland. that is a great concept. to try to entice either home-grown companies or companies to come from other places, incentive programs. we have what's called the emerging technology fund in texas. it's been highly successful. and the end prize fund, which has been around since 2003 in texas -- and that's what we really used on california. listen, we're not picking on california. they're just such a target-rich

environment for us. [laughing] let me tell you, there's plenty to go around. [inaudible] >> that's the way it's supposed to -- susanna martinez is the new governor of mexico. i don't try to offend people, but i'm very forward in challenging states to change the way that they do business. so that their businessmen and women will stay in their state or expand in their state. i don't have a problem with that. i'll give you one example of how new mexico was very successful in luring the film industry. because they have film incentive. very, very successful. and we were losing people moving out of the state of texas to go to new mexico. so we changed our film incentive to be richer. it's not as big as new mexico has, but the fact is, it doesn't have to be.

people really like to live in austin, texas, or dallas, or hiews continue which is kind -- houston, which is the central part of our film. i don't mind, you know, whether it's martin or whoever it is being critical of texas. but at the end of the day, facts are what matter. and there were more jobs created in the state of texas through the decade of the 2000's. people vote with their feet. that's why i say the 10th amendment is so important. i may not agree with everything that martin does. some things i really do. and i don't mind stealing those and taking them to my state and trying to put them in place. but leave us alone is my message from the federal government. let us compete. and then the people will figure it out. they'll go where they want to go. they may want to live in maryland and enjoy the east coast and the great crab house.

>> one of the most attractable issues during the course of this recession does seem to be the unemployment rate. governor o'malley, i think it's about 7.4% in maryland. >> that's right. >> what can be done about this? what are you doing to try to bring down unemployment? obviously maryland is very heavily dependent on the federal government which helped sort of ease the pain some. but i assume that's not good enough for you at 7.4%. >> no. it's not good enough at all. the most important jobs we create in our state, it's the next job. so everything that we've been about ever since this recession hit us is about getting people back to work. i think every state has a different set of competitive advantages. the governor talked about some of those things in his state. we, too, have competitive advantages in some of our areas that continue to grow and accel are life science, biotech, i.t. increasingly, the joint cyber command and things related to that. also, with the port of baltimore

we did a public-private partnership created 5,700 jobs with mostly private money at the port of baltimore so when the larger ships can pass through the panama canal, they don't pass by maryland. we're engaged in local trade, in the new jobs in the future. and we have also -- the governor talked about the proposal we had before the state legislature which is invest maryland. that's a way of replenishing our venture fund with $100 million, allowing large entities, insurance companies to forward pay at a discount their tax liability, and then we put that into the maryland venture fund for some of the start-ups and men perennial -- entrepreneurial endeavors that are going on in our state. the u.s. chamber of commerce named maryland one of the top two innovation and entrepreneurship friendly states in the country. and the kaufman foundation ranked us among the top three in terms of being well positioned to be a winner in this changing

new economy. so these are some of the things that we're doing along with we did create a new hiring tax credit for any business, large, medium or small, that hires maryland or offers unemployment roles, gets them back to work. we expanded our life science and biotech credit. we also extended our research and development tax credit. so these are some of the things we've done. >> there's a loud discussion in washington about health care reform -- >> and the new green motor being built at g.m. in white marsh. >> there's a lot of talk in washington, gofs, about health -- governors, about the health care reform and impact. i want to ask you. at a practical level as this law is implemented, what is the impact at the state level of the health care reform law? governor o'malley? >> well, over the next 10 years we see us being able to avoid some $850 million in costs that

we'd otherwise incur. but the bigger hope, the great opportunity from health care reform is that we'll finally get one of the most out of control and fastest escalating costs off the backs of our small businesses, our medium size businesses, all businesses. every year for the last 10, 15 years our businesses have been sending another 17%, 15%, 20% for health care coverage. and those are dollars that they cannot invest in their plant that they cannot invest in creating jobs, that they cannot invest in marketing their products abroad. so we believe there are going to be states that really embrace this and are at the forefront of implementing it. and we believe the states that do that will become far more attractive to all businesses and especially to those start-ups, those family-owned, new entrepreneurial businesses. i think the states that resist it and fight it will have a very, very difficult time ever bringing health care costs down

in their state. and that's really the goal here in terms of job creation. >> governor perry? >> i have looked for some time for a state that would actually say that the health care bill was good and that it helped them. congratulations. you are the first. and i say that with all due respect because our states are different. and the way that you are structured may be where long-term it's good for you. let me tell you what it does to the state of texas. our calculation is over the next 10 years it will cost the state of texas over and above what we already pay for health care $30 billion. i talked to a couple of new democrat governors over the course of the last two or three weeks. the maintenance of effort requirement in the health care bill is devastating for a state like california.

i talked to jerry brown. i'm not going to put words in jerry brown's. but he recognizes that the problem of the maintenance effort portion of the bill -- our solution from the standpoint of health care is -- again, i can't find anything in the constitution that says that washington is supposed to tell us in texas how to deliver health care. and i've asked for -- and this isn't just the current administration. the previous administration wouldn't give us a waiver to allow us to be innovative, to look at different ways. i happen to think that the states are the laboratory of innovation. if we would give, martin, -- give martin or oklahoma the freedom to deliver health care to their own citizens, create insurance programs, create different programs of which people can pick and choose that they can best come up with the ways to deliver health care. with all due respect to our

friends in washington, d.c., they just cannot understand how to deliver health care in the vast areas, in the geographic, in the culturally different areas of texas one shoe fitting all it just won't work that way. >> both of you are the chairs of your respective party committees. so it would only be fitting we chat politics here for a little bit. last year you had a great year. >> thank you. >> beating governor ehrlich it wasn't even close this time. but a lot of your colleagues didn't fare as well. why is 2011, why is 2012 going to be different for democrats than it was last year if we haven't seen unemployment nationally appreciably come down? >> well, it's a big if.

as i look at some of these leading indicators it seems pretty apparent to me, and also from the commentators i listen to on the news, that most everybody agrees we're doing better now, our economy is doing better now, than it was two years ago, than it was a year ago. and the big it there in your question is what the economy will be doing and will our people be going back to work in greater numbers by our next election? i think we're going to continue to see our economy improve, but we have a long way to go. but i do think that over the course of time i think people will have a better opportunity to evaluate whether the president's call to out educate, out inin-- innovate is the way for america to go. historically i think that's true. i think it can still be true. i think a lot will go by between now and the next election. but in all of the states,

without the recovery investment dollars you talked about, premeditate going to see a striking index government philosophy between the republican governors and the democratic governors. we all have to balance our budgets. but democratic governors do so in way that protect the education of our people, that improve the skills of our people, and that give our people a better footing in order to be winners in this changing new economy. >> there were a good number of governors, members of congress, who did not want president obama with them on the campaign trail last fall. you know that quite well. a little straight talk. if you're a governor in a place like kentucky, do you want president obama with you on the campaign trip? >> i sure wanted him in maryland. and every governor will make their own decisions strategically, tackically. the president was a tremendous help to us in maryland. his organization was a tremendous help to us. so every governor will make that decision. i think what all of us didn't

want from the president, and i think democrats and republicans alike, is for him to be succes successful in getting our economy moving again and creating jobs. >> governor perry, you're chairman of the r.g.a. look into the future a minute. what is going to be the impact of having president obama on the ballot in 2012? >> i happen to think you're going to see a continuation of what occurred in november of win to 2010. >> why? >> and that is that individuals and individuals back in the states truly believe that the massive amount of money -- they correctly identify that that money that was spent didn't create the jobs that the president said they were going to do. and in fact, all it did was --

the young people are coming back to the republican party because they're starting to understand that the debt that's been created by this administration is monstrous. and it is going to have to be paid off by them. they look at a guy that's my age, and, you know, i may be gone before that debt really becomes incredibly indelible in our country. but i think you're going to see a lot of young people coming back to the republican side of the ledger. it is going to be driven almost exclusively by their concern about the economy and what this administration has done to their ability to live -- >> how concerned, governor perry, are you about the hispanics and the g.o.p.? you were really hurt in 2008 because they went for president obama overwhelmingly. are you concerned about your

party's tone about sort of slipping of hispanics when it comes to the g.o.p.? >> i'm not. we do quite well, i think. >> you do. but more broadly, the party. >> i think the party can look at us -- the hispanic population in the state of texas, they're proactive, hard-working, patriotic folks. we tell them, you want to keep more of what you work hard for, the republican party is where you need to be i. think we're making great progress along those lines. i stand up and i talk about border security. listen, there were mexicans, 34,000 mexican citizens, that have been murdered by the drug cartels since 2007. in a lot of cases in texas, family members, they're losing people's lives in mexico. and what we're doing to help mexico and to help along the border so the hispanic population, certainly i think in

the state of texas and other places -- >> but, governor, you also had ads that you aired in spanish. your tone was a lot different than other folks in your party run in different states. >> i'm pretty blunt about people who try to differentiate between people just by the way they look. i call them out. on a regular basis. we're a very -- my brother-in-law is hispanic. we marry each other. we do business with each other. the idea that somehow or another the republican party is not open and, frankly i think very alluring looking to the hispanic population because as they become more educated, become more engaged in the great free market, american experiment, they're going to go to the place where they get to keep more of which they work for. and that's, generally speaking, by republican administrations. >> may i say that i greatly admire that quality in governor

perry that he looks and sees the dignity in every individual and he doesn't allow people to denigrate others because of their cultural background. i do have a difference, though -- we're entitled to our differences of opinion. >> right. >> but we're not entitled to our own version of the facts here. by 2019, 55% of the federal deficit will have been driven by and created by, 55% of it, by bush era tax cuts, tax cuts that benefited primarily the wealthiest 1% or 2% of americans in the first decade of our country since the second world war where wages actually stagnated and started to go down. 13% of that deficit will be driven by the series of ongoing desert wars that our nation has been fighting. and only 4% of it is driven by the recovery and reinvestment

act. without which we would have plunged into a second great depression. so i disagree with the assertion strongly. and i think the facts bare it out that the things that president obama have done have driven this deficit. they were things that george bush did that took a surplus situation, a balanced budget by a democratic president, and drove it into the ground and put our country in a position of red ink with the cost of wars for the first time in our nation's history charged to our children's credit cards. >> before we close, one last question myself for you, governor o'malley. you've been involved in the d.l.c., democratic leadership council, a moderate democratic organization, for a few years. they've recently announced that they are going to be closing their doors. what happened to the d.l.c.? and do you worry at all about the impact of their shuttering on moderation in your party? >> i think the d.l.c -- i think when the democratic party has

the presidency, i think it's harder for other groups to sustain themselves. and the d.l.c. had a great run. i think that it brought to our country -- >> what happened? >> well, i think what happened was you saw a very successful administration in bill clinton's administration with security, responsibility, opportunity, all of the things that resonate acrosacross the board in our co. and every organization -- nothing lasts forever. i think they had a very good run i think the d.l.c. contributed a lot to this debate. i think the call of your question is what happens to moderate democrats. this is what i see happening, anyway. and you see this in a lot of the newer elected democratic governors. i think the more recently elected democrats, new generation of democrats, if you will, are fundamentally if not ideological, but entrepreneurial

and pragmatic in their approach to governments. so i think some of the tug of war in the party's change, which i think was completed in the large degree, jergsally any-- generationally, anyway with bill clinton, i think those tensions philosophically are not as prominent as they were. therefore, what we're all looking for are the things that work to create jobs to get our people back to work. >> victim of an opportunity? >> victim of their own success? i don't know. i don't consider anybody that's successful to be a victim. >> if president obama is re-elected in 2012, governor o'malley, do you want to run for president in 2016? >> no. [laughing] >> governor perry? >> let me go back and address this. >> hold on. no. first 2012? >> no. no. no. no. same answer it's been for the last year and a half. but he said something that's really important that i want to just defend for a moment.

washington has been on a spending spree that i, frankly, has been horrible for our country. and it goes back to the washington centric concept of washington knows best. the idea that washington, d.c., needs to be telling martin how to educate his chairn in maryland -- his children in maryland, i just think it's nuts. i'm not a fan of no child left behind. i don't think washington, d.c., should be telling you how to educate your children. i think that's your people and your innovative ways of doing that. same thing on the health care, the big pharmaceutical bill. it is a huge debt put on. and, again, it comes back to washington, d.c. one of my goals over the course of the next few years working with the republican governors and the democratic governors, frankly, because i think there

are a number of governors -- you know, sometimes in the quietness of our private conversations maybe there's a little bit more heat to not speak out against a sitting president or a sitting party that's in power. but the fact is, washington, d.c., is trying to tell all of us how to run our states with way too much specificity. and the cost of that is what is driving the deficits in this country. and if we would get back to a substantially leaner federal government do what you're supposed to do right. defend our borders. mr. president, come to texas and defend our border. then we might have a conversation about some of these other things you're wanting to do like come into my state and take over our clean air permitting process. i mean, this drives me up the wall. we have had one of the great programs in the country. we cleaned up our air more than

any other state in the decade of the 2000's. ozone levels down 27%. night rick oxide levels down 50-something percent. and the -- i might add while we're creating more jobs than any other state in the nation, hell, i thought we'd get an award. but what we get is the e.p.a. coming into texas taking over our air permitting process. i don't understand that. to me, that is the problem that we have in america that we've got to address as a country and talk about what is the proper role for washington. isn't it costing us way too much money? >> we're going to take a few questions here before we go. the first one is -- both of you will appreciate this. how important is innovative technology in your stiets job creation? -- states to job creation? >> it's key. some of the fastest areas of growth in the state are biotech

and cyber security. we were able to compete for and win a federal grant to expand broadband connections and connect all 24 of our counties in our state. we believe that cyber highway is really the key to the future. so technology is at the center of our new economy. >> well said. absolutely, technology, finding cures for diseases -- in 2005, i believe, 2007, we passed a $3 billion effort over a 10-year period of time to find the cures for cancer. again, it's those big ideas, those very innovative and all the spinoff that comes from them. them -- from them, the jobs that are created. so technology -- the energy field. we haven't talked about energy

at all. >> please. >> and the fact of the matter is, we're seeing the middle east and those areas literally in flames. countries that have massive reserves of oil and gas. yet in this country, whether it's the dakotas and i believe the eastern side of montana, monstrous reserves that we are using our technology today, martin, to find the ways to not only discover it -- 15 years ago we had no idea that there were these just tremendous reserves of natural gas in three or four different locations in our country. bartletsville, eagle ford formation down in south texas. and where through technology, again, ways to extract it. so the idea that we're not given tax credits, not giving

incentives to domestic exploration of our natural resources is beyond me. that ought to be one of the focuses, i would suggest, from our current administration to become more energy independent. but, again, it's all driven by technology. and technology, know, whether it's green jobs and cleaning up our environment, it's all in the innovative minds. and generally speaking, it's in the states. >> can i give a plug on offshore wind? we're very focused on offshore wind. we take one of the great renewable sources of energy that we have to capture all -- or atlantic states, really, that offshore atlantic wind. we're pursuing that. we've also done a number of things with technology to reduce energy consumption in our state and advancing green buildings and the technologies in terms of geo design, green architecture

and those sorts of things that cannot only improve the environment but secure jobs. >> one last question sort of coming back to where we began here this morning that's very much on the news. if we were to have this discussion 10 years from now, trying to project forward, what will be the role of public employees, labor issues in terms of state government, state spending, state budget issues? governor perry? what's going to happen here? >> again, i think that every state should be able to decide that themselves. and i hope that we don't have a federal government that tries to inject themselves into the structure of our states. martin and i are like two fraternity boys that are trying to maybe get elected fraternity president here, but wind energy, we have more wind energy in texas than any other state in the nation. [laughing]

>> that's good competition. i want martin to be pushing me to create more incentives to get more wind energy. but the fact is in 10 years my dream is for the states to be substantially less tethered to a federal government that's telling us how to educate our children, create our own energy, and transportation infrastructure or delivering our health care. to me, that's the beauty of what america is all about, competing with these states. we've gotten away from that. i don't think anybody doesn't recognize that washington, d.c., has way too much influence and cost to all of us. >> governor o'malley? >> i think -- your question is 10 years from now where will this be? >> yeah. >> i think right now we're coming out of -- we're not yet out of, but we're coming out of the worst recession our country has seen since the great depression. all of that impacted our revenues. what people want right now are

for executives to focus on solving the problem so that we can move forward. and they also want people that are not ideological. they want people that are pragmatic, bring people together to find the things that work and do it so that we can move forward. that's number one. number two, i do believe that people are hungry to understand how they and their families fit and make it in this new, changing economy. the states that win will be those states that can bring people together in this temporary, temporary, fiscal crisis and protect the priorities that allowed their states to be big job creators as we transform into this new economy. i don't think 10 years from now we'll look over our shoulders and say there were once unions here. once people had the freedom to organize and had their voices heard in collective barring yang. but that was no more. that was all doan with a with in the -- done away with in the most recent recession. i don't think that's going to

happen i think one of the reasons you see the public pushback on the extremism and ideology trumping problem solving in wisconsin is because people see it as fundamentally mean-spirited, ideological, and fundamentally unfair. >> are public employees the scapegoat of the moment when people look for sort of rationals? >> yes. in times of scarcity there's a great danger that any group of people suddenly become scapegoats. and for some governors instead of focusing on the problem, they focus on scapegoating public employees. unless in the case of fire and police unions greater numbers of them are registered republicans or vote republicans. and then they're not so angry at them for organizing and having their voice heard. >> governor perry, do you want to jump in there? >> we're a right to work state. so in texas, our public employees are pretty well thought of, actually. i don't see -- they're not surrounding the capital of the day.

>> there are -- >> we have people dom austin all the time. please come. we like them to be there, be interactive go back and forth and express their desires. how boring would it be in austin, texas, if there weren't folks out in front with signs held up expressing what they love? my point is that our states -- i keep going back like a broken record. but are states being able to compete against each other? to me, that's going to be the future of how strong america is. if we truly believe the laboratories of innovation are the different states and that states are different, people should be allowed to decide where they want to live. listen, california, i go to san diego almost every summer between some time in july and august. because, trust me, they got better weather than we have in

texas. and i'm sitting there, i'm thinking, how can you screw this up so bad that people would leave this? it is beautiful. [laughing] the fact is, it ought to be left to the states to decide those crucial decisions about taxes and regulation and what have you. and then let people decide where they want to live. >> i think we can all agree about california weather on a rainy day in washington. i have to wrap it up. governor perry, governor o'malley, thank you so much for joining us. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> the nation's democratic governors held their annual winter meeting here in washington. friday they met with president obama at the white house to talk about several issues. after the meeting some of the governors spoke with reporters about their focus on creating

jobs. speaking first is maryland governor martin o'malley. this is about 10 minutes. >> hi, everybody. get our governors in here. good afternoon. my name's martin o'malley. i'm the chairman of the democratic governors. with me are democratic governors from across our country. we just emerged from a very productive meeting with the president and the vice president. and we had been asked prior to our coming together with the nation's governors this weekend to meet with our business communities in all the states that we represent -- north carolina, washington state, montana, illinois. and to have a conversation with the president about what our business communities are saying.

i want to introduce a few members of the democratic governors to share what came out of the meeting just now. but, in essence, if i can u summarize it, it is this. that our business leaders in all of our states understand that the most important priority we have right now as a country is to create jobs and to make the right decisions so that we can harness the innovation that goes on in america for greater job creation so that we can do a better job of improving the skills and education of our work force, and so that we can rebuild our nation's infrastructure which also creates jobs. we talked a lot about the importance of a reliable power grid but also the importance of bringing people together so that we have a transportation reauthorization bill so we can do the rebuilding that this nation needs in order to create jobs. i'd like to turn it over now to the vice chair of our democratic governors association, governor beverly perdue from north

carolina. >> thank you. i'm bev perdue from north carolina. it was refreshing for me to spend this morning with the fellow governors and the president and the vice president where we focused on things that are critical to each of us as state leaders. it starts with jobs. our people have got to have jobs and go back to work. we talked about capital access. we talked bin from a structure. we talked about rules and regulations, all the things that are real to working americans across this state and country. then we focused on what the great job creator is. and long-term, you all know that's education. about the capacity of our folks across america to understand that the investment in education from preschool all the way through the university is actually synonymous with a healthy and vibrant global economy. so, yes, in america we do intend to win the future. we're going to win the future by putting our people back to work. jobs, jobs, and more jobs. by educating and offering folks who are out of jobs an opportunity to go back to the community college to re-educate themselves. that's a comprehensive goal shared by all of us this morning.

and finally to focus on the things we do best in america which is innovation and exploration and being first in leading the world. >> thank you. governor patrick from massachusetts. >> hi, everybody. we had a really very productive conversation with the president. and the president, the vice president, made it clear that they both in this white house just as we are all about jobs. and that a strategy based ont)ñr education, innovation and infrastructure is a winning strategy. i can say that from our own experience in the commonwealth where we've pursued this strategy for the last four years, we have the results to show for it. first in the nation in student achievement, first in the nation in health care coverage. we're growing jobs faster than most other states in the country. we're investing again in rebuilding our neglected infrastructure. and it is making a difference. and it has the support of our business community as is the case of businesses in all of the states represented today. so i want to say how grateful i

am. and i know we all are, for the time we spent with the president and the vice president and their team. and how closely we intend to work with them on this agenda of getting everyone back to work and expanding opportunities. thank you. >> thank you. governor mar tell from delaware. >> hello, everybody. first, we very much appreciated the fact that the president asked us to come today with specific suggestions for him that were generated by our own business community. and not surprisingly, the folks who create jobs back in our states want us and want the federal government to be focused on the issues that are most important to them. it's about great schools. it's about a great work force. there was a lot of conversation today not just about k-12 but also about community colleges and creating linkages between the skills that are taught and the needs in the work force. it's about the kind of quality of life folks have. it's about having a very responsive government. again, both at the state level and at the national level. meaning, let's make sure we don't take so much time for permits and that we're smart

about regulations. i can tell you in my conversations, back at home i have not had a single business person say to me that they want the federal government refighting the fights of the last two years about health care what they want is focused on is what are we going to do to create jobs? last year when i was out in a number of states trying to help some candidates running for office, including wisconsin, i have to say the workers that i met in wisconsin, again, were very much focused on what are we doing in wisconsin and other states around the country, focused on creating jobs? i can tell you, coming out of this meeting with the president, that's exactly where he is. >> thank you. open it up for questions. >> the battle of employee unions? >> we were focused on the things we can do together to create jobs, like coming together to advocate with our business leaders for a transportation reauthorization bill so we can build that infrastructure. we talked about the things we can do to cut through red tape

and open up innovation when it comes to medical devices and new cures and those sorts of things that have fueled the life, science and biotech economy. so we didn't talk about whatever it is they're doing in wisconsin today. >> you talked about pension obligations more broadly. we talked about the state pension obligations more broadly? >> not really. we spent time talking about being fiscally responsible, balance our budgets, a dress costs. -- address costs. but we also have to move forward at the same time. so we talked about thifngdz that create -- things that create jobs, reducing the barriers for businesses to access capital, making it possible for more people to get that certification or the two-year degree, so that americans in all states can fill the jobs for which there are openings and yet the lack of skills. so this was an hour where we were focused on jobs and moving our economy forward.

>> was there a discussion about what you can expect from congress in this regard? >> there were conversations about what we can expect from congress in terms of the decisions we need to make right now not only to balance our budget but also to make the investment that allow us to create jobs today by investing in a stronger country. so, particularly or specifically on transportation and the reauthorization. there is no way that we can build new roads or rail or transit infrastructure if we don't get a long-term authorization out of congress for transportation. it's critically important to our economy. >> are we seeing the worse of our economy right now with budget cuts? >> does somebody else want to get in here? we were talking about the things we are doing and can do to create jobs. the other day in the news. i don't want to get you down with good news. but g.m. actually reported record profits. they were able to give their employees $4,300 each in

performance bonuses, and we're creating the new generation of electronic cars. we're not preparing for the worst. we're preparing for the best. and the best thing we can do right now is create jobs. that's what we spent this hour talking about. we're all going to be heading back to a meeting with c.e.o.'s from all over our country, really. and we're going to be talking in that context all afternoon about the things we can do together to create jobs to harness innovation, to make sure that we out educate, out innovate, and out build the rest of the country. >> [question inaudible] >> the spirit is one of unrelenting optimism and faith in the people that we serve, that we're going to be able to make the tough decisions necessary in order to create jobs and win the future for our kids. >> are you saying there wasn't one word about the big battle of employee unions spread tock your state? -- spreading to your state?

>> i think most of us see that as a distraction, really, from the most important work that we can do, which is creating jobs. so all of us get things done. we're about getting things done. we're not primarily an ideological group of people. the men and women that run the states that we represent believe in bringing people together to honestly address our challenges and to get things done. thanks a lot, everybody. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> next, live at 7:00 a.m., your calls and comments on "washington journal." and live at 10:00 a.m., the opening news conference from the national governors association winter meeting. >> i think our system of government is break down. i think the system of checks and balances we have in our system are not operating properly.

>> winslow wheeler, at the center for defense information. he's also written two just published essays. >> the congress has three essential key powers -- the power to go to war, power of the purse, and power to investigate. the first two powers, to go to war and of the purse, are meaningless if congress doesn't exercise power to investigate. they're not doing that. >> this morning, jennifer depaul discusses how current domestic and international events could affect consumer confidence in the economy. .then jim glassman talks about the role of diplomacy and use of the internet and social media and political uprisings. and later, montana governor