NEW YORK -- If a new chief executive is supposed to have a political honeymoon, Eliot Spitzer is disproving that notion. In the two months since he was sworn in as New York's 56th governor, Spitzer has moved decisively on several fronts, and political warfare has erupted.

First, he took on the legislative leaders, Assembly Speaker Silver and Senate Majority Leader Bruno in a battle over who would become the new state comptroller. The governor lost the opening round but won the next round and vows to keep fighting for a legislature that supports his agenda. Timidity is not a Spitzer quality.

He's unveiled ambitious plans to increase funding for New York schools, begun phasing out hospitals as part of a major restructuring of the health care system. Announced that he wants to go ahead with construction of the controversial Freedom Tower at ground zero. Endorsed a plan to build a new casino to run by the St. Regis Mohawk Indian tribe in upstate Monticello.

PRESSMAN: Good day, I'm Gabe Pressman, and Governor Eliot Spitzer is our guest on NEWS FORUM today.

Good day, Governor. Welcome.

Governor ELIOT SPITZER: Great to be here. Thank you, Gabe.

PRESSMAN: There are many issues involving governing New York I want to get to right away, but as a result of your overwhelming victory in November, you are the titular head of the Democratic Party and there seems to be some bickering or many civil war going on at the moment between the Hillary Clinton forces and the Obama, Barack Obama forces with the two sides exchanging charges. Mr. Geffen in Hollywood saying that Hillary Clinton doesn't have the gravitas to really lead the country and unify the party, and opposite charge being that he is not--that is Obama not waging a campaign that is built on unifying Democrats and taking over the country.

Gov. SPITZER: Right.

PRESSMAN: So I'm wondering, do you feel that there is a need to get this party unified and especially in New York?

Gov. SPITZER: Well, let me say this. I think Democrats are by nature fractious at times. We do agree virtually all the time but disagree with some, vehement, sometimes, over mostly substance. But the nature of politics is there are moments that erupt like this. But I think the essential point is much more fundamental. The Democratic Party, by November of 2008, when there's a presidential election, when the future of this nation will be at stake, we will be unified, we will have a candidate whom we can support, and I think most people feel right now that the change in direction that we need nationally bodes very well for a Democrat being elected president in 2008, and that's what we look forward. Those who have looked at the course of the nation under the six years of President Bush, by and large, have concluded this is not the type of leadership and the direction we want to be moving in, so a shift will be what we move towards. And most of this, all of the sort of momentary disagreements, I think, will be long forgotten.

PRESSMAN: Well, yeah, but do you believe--would you advise the two sides to stop the bickering?

Gov. SPITZER: Well, first, I don't think it's my place to be giving advice to them. They're off running for the presidency and I'm not immersing myself in that. I have the very significant responsibilities of being the governor of New York, and I'm focusing on that and not letting myself be pulled into the other distractions. But I think this will be viewed as one of those brief chapters that provided some fodder for the media, no doubt, and it's good fodder, but I is not important to most voters, and hence, we will quickly forget it.

PRESSMAN: Dr. Dooley, the legendary character, once said the Democratic Party ain't on speaking terms with itself.

Gov. SPITZER: Well, you know, we are sometimes considered a dysfunctional family. But we're a family and we understand that and this is what makes it exciting and we are a big tent. And because we're a big tent, we have a greater vitality in terms of ideas, in terms of concepts, and I think that also leads to a greater creativity that emerges from the Democratic Party.

PRESSMAN: The--getting to your health care plans for revamping the health care system in the state, the union, the Health Care Workers' Union, 1199, and the management people that run the hospital industry, have started a television and media campaign throughout the country opposing some of the cuts that you have throughout the state, opposing some of the cuts that you have prescribed in your program. Are you concerned about this?

Gov. SPITZER: Well, I'm not concerned in the sense that healthy debate about a budget is part and parcel of the legislative and political process. But I'm concerned that people not be misled by their ads that are fundamentally distortive. Understand, Gabe, we need to restructure health care. Our health care system is both the most expensive in the nation and also one of the least effective, if you measure it in terms of chronic diseases, if you measure it in terms of the number of kids who are obese, if you measure it in terms of asthma, if you measure it in terms of a failure to provide health insurance. Our health care system is not working well, 2.6 million uninsured. And so the forces who are trying to maintain the status quo, which is unbelievably expensive, our Medicaid budget along is $46 billion, 46 billion, the most expensive in the nation by far, the forces that want to maintain the status quo are up against the overwhelming desire of the public to change what we have. Change evokes opposition because 1199 has been doing incredibly well. Dennis Rivera has gone to Albany...

PRESSMAN: The head of the union.

Gov. SPITZER: The head of the union, gone to Albany time and time again and cut deals behind closed doors that have generated a lot of revenue for him and his members but not good care for patients. My obligation is to provide care for patients and insure that the reform that we want is attainable, and we will fight that battle. And it will be an interesting discussion, and trust me, I will be out there making sure that the misstatements that they have made are corrected.

Just give you one small example. They're talking about enormous cuts. They're not big cuts. One hospital alone, it's a big hospital chain, I think $24 million in what they will lose in revenue, money we can then use to insure kids, use to provide better care for seniors. The top three executives at that hospital alone are paid $12 million.

PRESSMAN: Which hospital is that?

Gov. SPITZER: You know, I don't want to start tarring great hospitals with that, but the one hospital alone, the top three executives are paid 12 million bucks, and that is most of what we're seeking to eliminate. This is public money. So what we're doing is reasoned, smart, thoughtful and methodical. Those who want to maintain the status quo, of course, oppose it.

PRESSMAN: And when Rivera says that cuts are not reform, what do you say?

Gov. SPITZER: Well, you know, what we are doing is insuring 2.6 million New Yorkers, providing for better preventive care, insuring that we have primary care doctors. What he wants to do is keep funding bricks and mortar that has not been providing good care. So we're cutting here to invest over here. That is good health care.

PRESSMAN: But health care workers are among the lowest paid workers in the economy.

Gov. SPITZER: You bet. Which is why we...

PRESSMAN: What about these people...

Gov. SPITZER: Which is why we continue to work aggressively to permit them to get the best wages, which is why I support increasing the minimum wage in support as all my years as attorney general and now as governor, their rights to negotiate aggressively, to be represented effectively. But that doesn't mean that we should take tens of millions of dollars and simply transfer it to hospitals that are wasting that money. That's a very different manner. And so there's a subtlety and a nuance that you have to bring to this discussion. His blanket statements about cuts are not reform is wrong. We are reforming the system in a way that is supported by virtually every advocate out there.

PRESSMAN: Will you take care of these workers if they get displaced?

Gov. SPITZER: Sure, we do. Sure. One of the things that is essential in the restructuring we're talking about, there was something called the Burger Commission, and there are some hospitals that everybody agrees should be closed, because we should not be investing in the bricks and mortar, we should be investing in health care for people, for patients. Workers will have the opportunity to move to other jobs. This is the way we are doing it. So there is a lot of kicking and screaming by those who have cut back room deals, who do not have the interest of the public in their eye.

PRESSMAN: You include Governor Pataki, who negotiated those deals?

Gov. SPITZER: You know, the deals that were cut, I am intensely critical of. Back in 2002, when some of the deals thereafter, they were deals that were driven by an expediency and not by what I would consider the need, the desperate need to reform health care. It is both a medical need to reform health care...

PRESSMAN: Right.

Gov. SPITZER: ...to get a better outcome, and a fiscal need. We are still the most taxed state in the nation. When people say, `What are my property taxes so high?' Why are my income taxes so high?' It's because we have a Medicaid budget of $46 billion, far above the national average, the most expensive in the nation. So we have to ask ourselves, how can we do better.

PRESSMAN: The battle that you've been having for weeks with the legislative leaders, Bruno and Silver, is that over now or are you going to continue to proceed to try to unseat those legislators that are not friendly to your program?

Gov. SPITZER: Well, let me phrase it this way. There is a cultural shift that I'm trying to have Albany embrace, one that says, wait a minute, let's not do inside, back room political deals. Let us ask ourselves what is in the best interests of the public. And I've traveled across the state over the past week, disagreeing rather vehemently at times with some of the decisions made by the legislature, and I will continue to articulate my disagreements because that is how you get change. Now, having said that, none of this is personal. I get along very well with Joe Bruno, with Shelly Silver, with the others. This is not a personal disagreement or dislike. You have to deal with people and work with them and I do that all the time.

PRESSMAN: James Taylor...

Gov. SPITZER: It is--it is--it's a way to express things to the public.

PRESSMAN: James Taylor popularized the song, "Steamroller." Well, I'm a baby--I'm bound to run all over you. Is that your motto?

Gov. SPITZER: Well, you know, I used that metaphor one time and I think people kind of latched onto it. Here's the thing. Sometimes, you have to be forceful. You always work with people, you always negotiate. We're sent in there to do the people's business. And so, you know, whatever the metaphor, I think people see and I believe deeply in the convictions that I bring to this effort and will continue to work very hard.

PRESSMAN: Do you expect that you're going to be able to reach compromises with legislative leaders Silver and Bruno, that you're going to be able to work with Sheldon Silver?

Gov. SPITZER: I will reach compromises with the legislature. I will work with Joe Bruno, Shelly Silver. They are the elected leaders of their respective houses, and of course, I will work with them. There are compromises and negotiations that we are working on all the time in the public interest, and of course I will do that. That is the job I've got. It is also my job to lead the effort to change the way Albany views issues. And so I will do all of those things simultaneously. And when people say, `Gee, there seems to be a tension here,' there's no tension, there's simply an effort to run on different tracks, to say, `Yes, you drive a reform agenda.' At the same time, you work on particular issues and negotiate with leaders because that is our job.

PRESSMAN: Let's continue this discussion, philosophically and practically, after this message.

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PRESSMAN: And we're back here with Governor Spitzer.

Governor, in this warfare, you characterized it, I guess, more as corrective actions that you're taking. Do you hope to take over control of the state Senate? That is to have your people in control?

Gov. SPITZER: Well, let me put it this way.

PRESSMAN: The Democrats.

Gov. SPITZER: You always want to have your party controlling, to be in the majority in either house of the legislature. I think that would make it easier to have an ideological compatibility and get my agenda through. And I expect that given the way New York politics has flown down the road, I can see that happening. I think that would be an affirmative thing to have greater unity of view in terms of reform. There are certain reform measures that we have had difficulty moving through the state senate in terms of electoral reform, campaign finance reform, economic reform, health care reform, so that would be good. But it is also my job to work with those who were elected by the public and so I'm doing that. And I think that Joe Bruno is somebody with whom I can disagree on a significant number of issues, but he's a very pleasant, comfortable person to deal with.

PRESSMAN: But you are attempting to take his job away by electing a Democratic majority.

Gov. SPITZER: Well, you make it sound so nefarious, but I think that is the nature of politics. In the nature of politics and governance, you try to support those who have a common ideological view, and that's the way it should be.

PRESSMAN: And you are targeting individuals.

Gov. SPITZER: Well, let me phrase it this way. You run candidates in various seats and therefore, you propose candidates. And we just won a very important special election in a senatorial district in Nassau County...

PRESSMAN: Right.

Gov. SPITZER: ...which elected a fellow, Craig Johnson. Very smart, able, competent, ethical individual who has the reform agenda that I do.

PRESSMAN: Well, what about the business of converting Republicans to Democrats?

Gov. SPITZER: Well, look, I don't want to get out of my area of--now, I'm a lawyer and government conversion has more a theological aspect to it. Hey, look, if people wanted--if people changed parties...

PRESSMAN: To some people, politics is religion.

Gov. SPITZER: Maybe so. I don't want to get carried away with the importance of what we're doing. But if people change parties because they feel they're more compatible with one party or the other, that's fine as well. And it's happened in both directions. We have seen Democrats become Republicans become Democrats.

PRESSMAN: Right.

Gov. SPITZER: That is the nature of ideological debate.

PRESSMAN: In your inaugural speech, you said that--or was it the state of the union, you want to change the ethics of Albany and end the politics of cynicism and division. How are you going to change the ethics. Aren't ethics kind of inborn?

Gov. SPITZER: Well, you know, you're asking a deeper question. Yes, I think by in large, by the time somebody reaches a certain point in his or her maturity, your ethical values and your framework is already set. But the way our governing structure in Albany has functioned recently, people have sensed that the primary motivation, perhaps, has been survival and what is in it for the elected official rather than what is good for public policy. I think we shine the light on these decisions, discuss them openly with the public. Reform campaign finance, reform the way we pick judges. We can do certain mechanical things that will then change the way decisions are made.

PRESSMAN: What's the most important ethical reform that you want?

Gov. SPITZER: Campaign finance reform. Campaign finance reform that would take away the influence of money from the electoral process. And then after, redistrict them, because we live in a world where districts for legislators have been drawn in a way that is designed to permit them to run essentially unopposed. And I think this is a national issue, that we have seen it in the way our seats are drawn in the House of Representatives. It is something that is, I think, unfortunate for voters and unfortunate for the democratic process.

PRESSMAN: In your inaugural address, you said there'll be two overreaching objectives, the ethical part of it and then the economy had to be transformed.

Gov. SPITZER: Right, right.

PRESSMAN: What do you hope to accomplish in the immediate future, in the first year, as far as economic reform?

Gov. SPITZER: The first thing we need to do is bring back our upstate economy. The economy here in New York City is doing very well. We are very fortunate. Downstate, we need to invest to permit the economy to grow. It means more money for education, transportation, housing, critical investments that we will make in New York City. The upstate economy needs to pivot towards an innovation-based economy, which means investing in our university system, getting high-tech companies to invest, getting the jobs in Rochester and Buffalo and Syracuse and Binghamton that we know companies want to bring there.

PRESSMAN: Concretely, what are you going to do?

Gov. SPITZER: We are going to cut property taxes. We are going to make government more efficient, lower the cost of health care. We are going to invest in our university system because companies these days, when you ask them, where do you bring their jobs, will tell you over and over again, jobs go to those communities with the best universities. That is what we're going to use as magnet. We have the best universities. So if we lower our cost structure, lower property taxes, make health care more affordable and better, which is part of the health care debate we're having right now...

PRESSMAN: Right.

Gov. SPITZER: ...then we will become a magnet for jobs.

PRESSMAN: An essential part of the economy of New York City is the transportation system.

Gov. SPITZER: Right.

PRESSMAN: Metropolitan Transportation Authority has set the subway fare, the bus fare, at $2. Are you going to hold that fare down?

Gov. SPITZER: What I've said is that we will certainly hold it this year and the budget is difficult. We were bequeathed by my predecessor an enormous gaping hole in the MTA budget. We are predicting a deficit next year approaching a billion dollars. It may come in lower, there's still revenues that are increasing, thankfully, because the economy's doing quite nicely in the New York City region. But if we have a deficit of that magnitude, then we have to step back and say how do we close that deficit and simultaneously make the investments that we need, ongoing investments, extending the subway system. We want to build the...

PRESSMAN: Right.

Gov. SPITZER: ...Second Avenue subway, the East side access, the number seven line. These are all critical investments.

PRESSMAN: But the law requires a self-sustaining fare. Do you feel that it's going to become inevitable to raise the fare?

Gov. SPITZER: Well, I don't want to say anything is inevitable, Gabe. We are going to work awfully hard to control spending, to invest, see what we can do to bring efficiencies into the system. But the public expects a system that runs, that is maintained. That requires money. So we will look at this, certainly, as we approach the next fiscal year and see what we can do.

PRESSMAN: On this property tax reform, what do you expect to achieve there, specifically?

Gov. SPITZER: We are going to be cutting property taxes by $6 billion, 1.5 billion in year one, 2 billion in year two, 2.5 billion in year three. When you speak to homeowners, middle class homeowners in particular, they will tell you that the hit of their property tax burden is incredibly difficult to afford. Property taxes across the state have gone up over 42 percent in the last five years. Wages have gone up 12 percent. So if you compare those two, 42 percent tax increase, a 12 percent increase in wages, that is why people are feeling incredibly burdened by the property tax and it's not fair. That is what is driving children, seniors, jobs, out of the state. And so we have to do better and we will do so.

PRESSMAN: You're going to roll back property taxes?

Gov. SPITZER: Absolutely. There is an agreement that we have to do this conceptually. As in many things in life, the details are difficult to work, we're working on it right now. But I think there is an overarching agreement that lowering our property taxes, which are among the highest in the nation, is a necessary part of bringing our economy back.

PRESSMAN: And you'd do it by summer?

Gov. SPITZER: Well, this will be part of the budget, part of the budget agreement that is obviously a complicated document.

PRESSMAN: Right, right.

Gov. SPITZER: I proposed my budget on January 31st. It's a $120 billion document.

PRESSMAN: Right.

Gov. SPITZER: So it's complicate, but we will get it done.

PRESSMAN: Let's come back and talk about role models after this.

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PRESSMAN: And we're back now with Governor Eliot Spitzer. How do you--when you have two enemies there in the legislature, Bruno and Silver, how are you going to get your budget passed expeditiously?

Gov. SPITZER: Well, I wouldn't call them enemies. I think we disagree about certain points of the budget.

PRESSMAN: Right.

Gov. SPITZER: But we all agree we need a budget that's on time. We need the right budget, that's more important than on time, which means funding education, cutting property taxes and reforming health care. We agree on concepts and we work awfully hard and we'll see if we can do it. The public is supportive of what I'm doing. They understand that, all the numbers validate that fact.

PRESSMAN: Right.

Gov. SPITZER: And the public has the ultimate power here.

PRESSMAN: I threatened to talk about role models.

Gov. SPITZER: Right.

PRESSMAN: You've said that Teddy Roosevelt is one of your role models. Lyndon Baines Johnson was another.

Gov. SPITZER: Right.

PRESSMAN: Now, Teddy Roosevelt said, "Speak softly and carry a big stick."

Gov. SPITZER: Right.

PRESSMAN: Is that your motto, too?

Gov. SPITZER: Well, you know, I try to speak softly. Sometimes it's not so soft. But you know, Teddy Roosevelt captured so much of what this nation is, the spirit of adventure, the spirit of reform, the spirit of dynamism. Lyndon Johnson was the consummate deal-maker, who got things done. He's perhaps an underappreciated president in that regard. Certainly, his days in the Senate have been chronicled. There's much to learn from reading about Lyndon Johnson as well, the way he got the legislature to do things that were important. Civil rights acts. So he is also somebody you look at and say, there's somebody to emulate.

PRESSMAN: Unfortunately, he said many Americans live on the outskirts of hope, some because of their poverty, some because of their cover--their color, and all too many because of both.

Gov. SPITZER: Right.

PRESSMAN: So that aspect of life, color and prejudice, is important to you?

Gov. SPITZER: Absolutely. In my eight years of attorney general, I think I showed that. It was eight years we dedicated to overcoming and working to overcome barriers that confront people, whether it is a barrier of health, whether it's a barrier of discrimination based upon race or disability. These are barriers we want to overcome, or education barriers that we have to overcome by investing. We want to create a land of opportunity, and that is what Johnson has as his--in his mind's eye when he talked.

PRESSMAN: And when Teddy Roosevelt said that there's nothing more important than daring to do mighty things because they might--otherwise you risk lying in the gray twilight, he said, that knows not victory nor defeat.

Gov. SPITZER: Right.

PRESSMAN: Would you rather lose than have at that twilight?

Gov. SPITZER: Than fail? Absolutely. And in fact, I love that quotation and I think I quoted that, or a piece of that in my inaugural address and I have quoted it often. The most important thing, I believe, for somebody who's elected to office is to try to bring those issues into the public debate that need to be confronted. And I say all the time, we won't win every fight, we won't win every battle, but we will raise the right issues and in the long run, that is what we are asking...

PRESSMAN: So LBJ and Teddy Roosevelt are your role models.

Gov. SPITZER: They are. They managed to win enough so that we remember who they are and I hope as the years go by, the public will say, `Spitzer picked the right issues, fought the right rights and accomplished that which we care about.

PRESSMAN: Thank you very much, Governor Eliot Spitzer, for joining us.

Gov. SPITZER: Thank you, Gabe.

PRESSMAN: Have a good day.

Gov. SPITZER: Thank you, sir.