RACHEL MARTIN, HOST:
This is WEEKEND EDITION from NPR News. I'm Rachel Martin.
Yet another federal budget crisis is on the horizon. This Friday, March 1st, is the day that massive, across-the-board federal spending cuts will take effect unless Congress agrees on a new budget deal. Some analysts say the cuts, also known as the sequester, could drag the economy back into recession.
Lawmakers never intended for the sequester to actually happen. The mere threat was supposed to force Democrats and Republicans to find a smarter solution and work out an agreement in time. But so far, there has been no deal in sight. Every state will feel the impact. But Virginia - because of its connection with the defense industry - is bracing for an especially big hit.
I recently spoke with Virginia's governor, Republican Bob McDonnell.
Governor, this past week you wrote a letter to President Obama urging him to find a way to avoid the sequester, these across-the-board spending cuts. And you're not alone; governors around the country have warned about the impact of these cuts. But can you give us some specifics about how sequestration could affect Virginia?
GOVERNOR BOB MCDONNELL: We're very concerned about the impact on our young men and women in uniform. To make half of the cuts be placed on the backs of men and women in uniform is just the wrong policy. We have to cut spending, $1.2 trillion over 10 years, but don't make half of those cuts in defense.
And, of course, I'm very concerned about the impact on Virginia. We have been the home of the U.S. military for 200 years now. And we have a number of jobs that are impacted by this. Analysts say as many as 200,000 jobs to be lost over the next 10 years if the sequester goes into effect, as it is with the defense cuts. So we are very concerned about that from an economic development, primarily a national security standpoint. We've got to cut spending. Let's just do it in a way that makes sense.
MARTIN: President Obama is expected to travel to your state, to Virginia, this coming week to repeat some of those themes. He says he wants to avoid the sequester. Are you two on the same page?
MCDONNELL: Well, we are on the goal of eliminating the sequester. We're not on the path to getting it done. This is really the president's idea in August of 2011. This was his way to be able to address the debt ceiling debate. And I would say the president, just like governors have to do, the president should have been leading and come up with a solution.
Traveling around Virginia and doing press conferences isn't what he needs to do. He needs to be in a conference room with leaders in the House and Senate, and saying how are we going to actually get this done? What are the other cuts that we can make so we lessen the cuts on defense?
MARTIN: Governor, are you putting pressure on Congress? I mean, you say - you lay blame for the articulation of the sequester at the president's feet. But this, as I understand, was also something that John Boehner had supported. Are you pressuring Congress?
MCDONNELL: Absolutely. I mean, I copied all the congressmen, every one of them on here. Most of them in Virginia, I can say are very much against the sequester going into effect. It is the Congress and the president that need to be able to get this done. I wrote the president because he's the commander-in-chief, and ought to be the one leading this discussion on how to find another pathway to reduce spending.
MARTIN: Do you think Virginia's economy is too dependent on the federal government?
MCDONNELL: Well, we're always looking for ways to diversify. But we actually consider it a badge of honor with all of these installations, many of them that go back to the foundations of the nation. And we are always looking for ways to continue to diversify, especially in places like Northern Virginia in Hampton Roads, where there're heavy military and defense contracting operations, to find alternative ways. And, you know, Virginia has got a 5.5 percent unemployment rate, which is the second lowest east of the Mississippi. So we've done a lot in order to create a great place to do business.
MARTIN: But that unemployment rate is due in part to the availability of government jobs, of federal government jobs.
MCDONNELL: Well, it's in part that's correct, although almost all the growth in jobs over the last three years I've been governor have been in the private sector. But there's no question that the presence of the defense industry in our state creates a number of jobs and opportunities. And I'm saying that they've got - defense has got to be cut just like everybody else. The problem is this is a haphazard, random policy which is meant to apply political pressure to Congress and not actually go into effect.
MARTIN: Governor, before we let you go I'd like to ask you about one other issue, and it has to do with the new healthcare law. And whether Virginia should opt out oh Medicaid expansion under the federal health law.
You said you were against this, this expansion. But you've got to fight brewing in your state legislature. And this past week, Republican Florida Governor Rick Scott actually reversed his position and said that he would back the expansion of Medicaid to cover more low income Floridians. Wondering if you are having second thoughts.
MCDONNELL: No. What I do believe is that we do have to be much better in taking care of those who are poor, aged, blind, disabled. But I also agree with what President Obama said about four years ago. And that is that putting more money and more people into a system that is already broken is not the right answer.
Our position is we should not expand Medicaid in Virginia until we dramatically reform it. To put 400,000 people or more into a Medicaid system that already is not efficient, that's got too much bureaucracy, that doesn't provide enough flexibility from the federal government by any stretch of the imagination, is just not right. And the reason for that is that Medicaid has now grown from 5 percent to 21 percent of the total Virginia budget in 30 years. That's before any expansion.
So we have one chance to do this right. Let's get our fiscal house in order when it comes to Medicaid and then we can expand it. I hope that's where they'll end up in the budget process.
MARTIN: Bob McDonnell, he is the Republican Governor of Virginia. He spoke with us from his office in Richmond, Virginia. Governor, thanks very much for talking with us.
MCDONNELL: Thanks, Rachel. Always a treat to talk to the NPR listeners.
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