Interview with Bob Schieffer on CBS News' "Face the Nation"

SCHIEFFER: Mayor, thanks for joining us this morning. Mr. Mayor...

GIULIANI: Thank you, Bob.

SCHIEFFER: ...you said repeatedly throughout this campaign that the winner in the Florida primary would go on to win the Republican nomination. But every poll now shows you running third in Florida. If you don't win in Florida, will you drop out?

GIULIANI: We're going to win in Florida, Bob. We have been campaigning here very steadily since the early voting began. There's been an unprecedented, I believe, amount of early voting. So I think we're going to do very well here, so I'm confident that we're going to win. I think our message to Floridians about taxes, being the person who has proposed the largest tax cut in American history and also having a history of cutting taxes, unlike my opponents, and I think our position on the national catastrophic fund is going to really make a big difference here in Florida.

SCHIEFFER: All right. Well, I'll ask you about all that in just a minute. I want to ask you, though...

GIULIANI: All right.

SCHIEFFER: ...what has happened, Mr. Mayor, to your campaign? You started out leading in the national polls, you were leading in a lot of these state polls, and then you decided to basically just pay lip service to those early contests and you kind of dropped off the earth. You started sinking in the polls. Do you...

GIULIANI: I don't know if I...

SCHIEFFER: ...think you made a mistake...

GIULIANI: I would...

SCHIEFFER: ...in the way you chose not to contest those early...

GIULIANI: I...

SCHIEFFER: ...contests?

GIULIANI: I believe the best strategy for us was one where we concentrated on Florida, given all the pros and cons of each one of our races and the assets that we had, the resources we had. The best chance we had was here in Florida, and I think that's going to be proven correct on Tuesday.

SCHIEFFER: Well, why do you--what do you attribute this drop in the polls to? Do--it--I mean, because if it wasn't a mistake in tactics, it would suggest that the more people found out about you, the more they didn't like you.

GIULIANI: I think--I think the reality is, of the people who won those primaries, they got all the attention. And now what we have to do is establish ourselves here in Florida and show that we can win. And that's been the concentration that we've had. We've unveiled here our tax plan, our plan for a single one-page tax form. It's actually already been introduced in Congress by Congressman Dreier and Senator Bond as legislation. It would not only be the largest tax cut in American history, it would--it would provide a single-page tax form as an option. One page in which you can fill out your taxes. So it would also be a tax simplification, as well as a reform.

SCHIEFFER: You talk about cutting taxes as the way to turn a government around. You said that's what you did in New York. But isn't that going to be kind of difficult with a war that's costing $220,000 a minute, with now a new stimulus package that nobody knows how they're going to pay for that; and now you're proposing this catastrophic insurance fund. How much would that cost, Mayor Giuliani?

GIULIANI: Well, for...

SCHIEFFER: Could you pay for that and still cut taxes?

GIULIANI: Sure. Let--sure. First of all, you--the tax cut plan is to cut taxes that would raise revenues. For--when, in New York City, I cut taxes, I cut the income tax by 24 percent, I was collecting 48 percent higher revenues from the lower tax than the higher tax. A cut in the corporate tax, for example, that we're proposing right now, from 35 to 25 percent, would mean more jobs, more investment, more revenues. Cut the capital gains tax, you make money. So you have to look carefully at these tax cuts. They're strategic tax cuts that would actually bring you more revenues.

We also are proposing cutting spending, which hasn't gotten as much attention. We would cut spending by not rehiring half of the government employees who are coming up for retirement on the civilian side, by putting targets on the civilian agencies of 5 and 10 percent reductions. So it's not just tax cutting, it's also reducing expenditures where you can.

And the catastrophic fund is a backup. The government is spending that money anyway. When a-when a terrible catastrophe takes place, like Katrina or the four hurricanes several years ago here in Florida, the federal government gives out billions and billions and billions of dollars. The idea here would be that the federal government would be a backstop for a once-in-a-hundred-year or once-in-a-generation catastrophe so that people can get insurance. I learned that campaigning in Florida. People here in Florida are having a really difficult time getting insurance for their homes. Some can't get it at all, some can't afford it, and some have to really strain to do it. So this would allow them to get insurance, and then if, God forbid, there was a catastrophe like that, you actually would have more private money involved in it, more insurance money involved in it, and people would get it faster. I think it's a prudent way to do it, and it's a way in which you get communities ready for whatever might happen to them, which is part of homeland security in the first place.

SCHIEFFER: Well, when this came up at the Congress, Senator McCain said--put the cost at somewhere around $200 billion. Did he know what he was talking about?

GIULIANI: Well, I--it--that's the cost of what a catastrophe sometimes plays out as. I mean, I think Katrina--correct me if I'm wrong, but I think Katrina has already involved about 120, $130 billion in federal dollars. So--but the reality is, the federal government spends that money anyway. It spends the money after the fact. So if it acts as a backup before the fact and private insurance can cover a lot of it, in the long run it's actually going to save money, not cost more money.

SCHIEFFER: You know, Mr. Mayor, yesterday was not a very good day for Senator Clinton, that's for sure, but it also really wasn't a very good for you, because the governor of Florida, who has 70 percent approval ratings, announced that he was going to endorse John McCain. I think the day before, the state's Republican senator, Mel Martinez, a former chairman of the Republican National Committee, surprised a lot of people, especially Mitt Romney, who thought he was going to get his endorsement, and he endorsed Senator McCain. And that comes on the heels of your hometown newspaper, The New York Times, also endorsing Senator McCain. That puts you in a pretty tough spot, doesn't it?

GIULIANI: The reality is, I was surprised by the governor's endorsement, but everybody endorses. The attorney general, Bill McCollum, a long-time congressman here, now attorney general, endorses me, is my campaign chairman. We have a lot of support here in--here in Florida, mayors and people up and down the state. The reality is, I think the people of Florida are going to make this decision, and I think the people of Florida see in me a proven tax cutter, someone who's actually turned an economy around, actually done what they would like to see done on a federal level; I already did that in New York. And of all the candidates that are running in the race, I'm the one who's actually lowered taxes in the past and turned around an economy.

And I have a significant amount of experience with handling the safety and security of millions of people. I think if people of Florida hear that, that's going to be the thing that decides this election. We all have endorsements--governor, senator, attorney general, mayor--we all have different endorsements, but in the long run it's getting your message to the people of Florida that's the most important thing.

SCHIEFFER: I want to give you a chance to respond to that endorsement by The New York Times, because they really took after you. They said your arrogance, your vindictiveness were, I think, are breathtaking, in their phrase. What do you say about that when people ask you about that?

GIULIANI: I was a mayor of New York City that I think brought about the biggest turnaround in the history of the city. Crime, welfare, the economy of the city, unemployment went from 10.5 percent to 5 percent, 600,000 people removed from welfare. I changed some of the rules, some of the social norms, some of the ways in which people look at things. The Times opposed most of my initiatives; they saw them differently than I did. So I was not at all surprised by their lack of an endorsement or their endorsement. I didn't expect it to go any other way.

Most of--most of my ideology that I put into place in New York City they opposed, including the one we've talked about most this morning, which is, you know, large tax cuts. But I truly believe that if you cut taxes correctly, you actually gain revenues and you gain revenues in a healthy way. You gain revenues by putting more people to work, by building businesses, building jobs, and it's a healthy way for an economy to grow rather than heavy taxes to transfer wealth, which I think puts a lid on an economy.

SCHIEFFER: All right. Well, mayor, I want to wish you the very best in that campaign on...

GIULIANI: Always a pleasure, Bob.

SCHIEFFER: ...Tuesday, and we hope we'll--we hope we'll see you again.

GIULIANI: I'll be sure--thank you.