MR. KOJO NNAMDIFrom WAMU 88.5 at American University in Washington, welcome to "The Kojo Nnamdi Show," connecting your neighborhood with the world. Later in the broadcast, "The Faithful Scribe," journalist Shahan Mufti and the story of Islam, Pakistan, family and war. But first, day two of the federal government shutdown. Congress remains locked in a standoff today over measures to fund government operations and Republican efforts to link such legislation to a scaling back of the Affordable Care Act.

MR. KOJO NNAMDIAs such, hundreds of thousands of federal employees will continue to face furloughs and many more will continue to work without pay. Many of those employees live and work in Virginia, a state that has as much at stake as any as this political dispute continues to reverberate across the country. Joining us to talk about it is Robert McDonnell. He is the Governor of Virginia. He is a Republican. He joins us by telephone. Governor McDonnell, thank you for joining us.

GOV. ROBERT MCDONNELLKojo, it's nice to be back on your show. Thanks.

NNAMDIAlways a pleasure, despite these adverse circumstances. By almost all accounts, lawmakers on Capitol Hill remain miles apart from reaching an agreement on a resolution to fund and reopen the federal government. What do you see at stake for Virginia while so much of the federal government is shuttered?

MCDONNELLWell, there's a lot at stake for our state. We have 172,000 federal workers. We anticipate, if it's like the last shutdown 16 years ago, it could be as many as a third of those that are being furloughed, as we speak. So, we expect to see a reduction in sales tax revenues and income tax revenues as a result of that. And then, of course, the interruption of services. We have a lot of federal installations. 19 military bases including the Pentagon, and although those will largely be spared, many other federal facilities are being closed as a result of this.

MCDONNELLAnd, listen, I think that this has unfortunately become emblematic of the problems with Washington. We haven't had a budget, Kojo, in four and a half years. It's astounding. No state, no locality, no business, no church, no family could run themselves the way the President and the Congress is running the country with these continuing resolutions. There's drama every couple of months, short term spending authorization.

MCDONNELLI mean, you need a spending blueprint and stick to it, and so I just think it's very, very disappointing, and for states like mine that have so many federal workers, it's gonna hurt.

NNAMDIYou said earlier this week that there's plenty of blame to go around, and that some would say our political process is broken. What conversations have you had with members of your congressional delegation about finding a resolution to this standoff?

MCDONNELLWell, I've talked to a couple of members, and, you know, everybody in Virginia just wants this to be resolved. I think it is true that people don't want government shut down, but overwhelmingly, they don't believe this Affordable Care Act, or Obamacare, is the right policy for Virginia. I think it's expensive, I think it's bureaucratic, I think it takes away choices, and I think it's gonna eventually fall under its own weight because it's so expensive. But to shut down government, as a result of this, I think isn't gonna happen.

MCDONNELLAnd there is enough blame to go around. The President's failed to lead. The Democrats control two and a half out of the three branches of government. He won't have a serious conversation about entitlement reform. He blames the Republicans for just about everything, and he hasn't engaged Congress very well. At the same time, the Republicans know that there's no way that the United States Senate Democrats and the President are gonna sign a bill that defunds Obamacare.

MCDONNELLThis is the President's signature accomplishment during his time, as bad a policy as I think it is. But so, there's no way that's actually going to happen. So, I think this plus the debt limit saga we're gonna have in two weeks, if this isn't all resolved, is bad for our country, is bad for our bond ratings, and it's embarrassing. The greatest country on earth can't even come up with a budget. So I'd say, you know, do what we do in Virginia. We got Republicans and Democrats in both Houses, and on big stuff, we solve problems and get things done.

MCDONNELLAnd there's just gotta be more of a willingness to find solutions.

NNAMDIBut Governor McDonnell, Virginia is also the Commonwealth of which the State's Attorney General and current GOP candidate for Governor made a very big deal out of, filing a lawsuit to challenge the Affordable Care Act's constitutionality.

MCDONNELLTrue.

NNAMDIAs soon as the ink was dry. Do you think that action or any other political figures in your state, the House Majority Leader, Eric Cantor, leading this debate, can bear some responsibility for contributing to the divisive tone in this national conversation about healthcare?

MCDONNELLWell, listen. Appealing to the courts on constitutional questions, I wouldn't say is partisan. I think it's a flawed law. Listen, the court decided. It was a five to four decision, Kojo, as you know. And that's why I've said, listen, the matter has been litigated. Whether we like it or not, Obamacare is the law of the land. My job is to implement that in the least bureaucratic and least expensive way for the people of Virginia. Appealing to the courts is part of the due process that I think we have as Governors and citizens.

MCDONNELLBut shutting down the government that hurts millions and millions of Americans and creates this ongoing unprecedented uncertainty, and threatens our bond rating and makes the greatest country on earth, you know, questionable in terms of its ability to manage its own finances. That's what I'm saying is wrong. I oppose the government shutdown. These debates can be had, ultimately, through our democratic system of elections. And that's where these matters ultimately get decided, so I think it's wrong to shut down the government.

MCDONNELLI think the Republican approach to that was one that obviously wasn't realistic. But, again, the President, until he starts leading on getting a balanced budget and on entitlement reform, we're never gonna have our fiscal house in order. 17 trillion dollars in debt, Kojo, is just unacceptable.

NNAMDIOur guest is Robert McDonnell. He is the Governor of Virginia. He's a Republican. We're taking your calls at 800-433-8850. You can send email to kojo@wamu.org. What do you feel, Governor McDonnell, would be a better strategy for Republicans to take on healthcare, the Affordable Care Act. Right now, it's a law that was passed by Congress, signed by the President, largely upheld by the Supreme Court. Yet, the House continues to vote over and over and over again to repeal it.

MCDONNELLWell, I don't think that's incorrect. If the House believes that it's a bad policy, voting to repeal it is one thing. But, shutting government down to make a political point that we all know is not gonna be successful, I think that's where the problem is currently. The President and the Senate are just not gonna accept that, and so the ballot box -- get more people into office that believe that the Obamacare legislation needs to be changed. And the majority of the American people consistently have said they don't approve of this policy.

MCDONNELLAnd I don't either. Repealing to the courts is a proper remedy. And so, I don't fault people for trying to make the changes. I'd like this law to go away. It's gonna be incredibly expensive if we expand Medicaid in Virginia, and it is in every other state, and without dramatic reform, it is truly a bad policy. So, I think these matters ultimately decided by the American people at the ballot box every two years when we have an election for the House and Senate.

MCDONNELLBut, the President is the President. The Senate is led by Democrats, and there's not gonna be a change. So, let's fight the battles, I would say, as Republicans, that we think we can win. What I'm trying to do is implement this in the best, least expensive, least bureaucratic way that I can for people in Virginia.

NNAMDIWhat preparations did you have to make as Governor before this shutdown went into effect?

MCDONNELLWell, that's a good question. We've been talking about this for many weeks, Kojo, as we were anticipating that this might occur. I announced that I've got several tools that are available to supplant federal funds, including an economic contingency account with two million dollars in it, a federal action contingency trust that I created two years ago after sequestration. It's got 13 million left in it. And then I have some broad authority to have authorized debt financing, deficit financing that I can use. Now, at this point, we're not planning to use any of those.

MCDONNELLWe're doing a summary right now of all of our agencies to find out how many federal, how much federal funds they actually have at risk and what they would need over the next days or weeks, if this lasts that long, to keep things afloat. And so, I will use the tools that are necessary, but in the short run, we're hoping there's very little that will be done, have to be done. The tragedy is these 30, 40, 50,000 civilian employees that do great work for multiple agencies in the federal government that now are at home and not being able to bring home the paycheck for their family.

MCDONNELLI mean, that's the hard part of this.

NNAMDIWe talk with D.C. delegate Eleanor Holmes Norton earlier, and she said that she thinks this could go as far as October 17th, when there is expected to be the standoff over the raising the debt ceiling. That's 15 days off. What effect do you think that would have on the Commonwealth?

MCDONNELLWell, two and a half weeks means that we may have to use some of these tools that I just mentioned. Our Fact Fund and some of these other in order to supplant some federal funds. By Friday, we will have the longer term plan in place, based on all the feedback we get from the agencies, with their microanalysis of what their federal fund stream is, and we'll have a better plan. But listen, Kojo, I'm gonna do everything I can to make sure this is as seamless as possible for the people of Virginia.

MCDONNELLI don't think it's fair. There's not much I can do about another level of government. But Virginia's, you know, been ranked as one of the best managed states in the country, the most business friendly state. We've got a two billion dollar surplus in the last two years, and big reserves in the rainy day fund. I mean, we're in solid financial shape, and having the federal government's policies undermine our stability is obviously not something we appreciate.

MCDONNELLBut we do have these tools out there. We will use them. But what I would say is, look, there's something we call the Virginia Way here, and that is Republicans and Democrats working together to solve problems and get things done. Don't capitulate on your principals, but realize you gotta solve problems, which is why we fixed deficit and why we fixed our VRS system. Our rainy day fund is up, our budget is balanced, and we fixed transportation.

MCDONNELLThese are all bipartisan things. The biggest problem, though, coming up in two weeks, as you just pointed out, though, is that we are 17 trillion dollars in debt. And every couple of, every five, six, seven, eight months or a year, the federal government is saying, we need to borrow more money. Well, the solution is, we've gotta get our fiscal house in order. We can't keep spending more money than we bring in. Everybody knows that. And honestly, Kojo, until we get a balanced budget amendment passed in the United States Constitution, I don't think there's the fiscal discipline in Washington to manage our resources.

MCDONNELLAnd so I think that's the thing that's gonna save America is getting a Balanced Budget Amendment.

NNAMDIOnto Eileen in Garrisonville, Virginia. Eileen, you're on the air. Go ahead, please.

EILEENThank you, and good afternoon. I am calling because I am puzzled by the effect that sequestration and the suspension of non essential workers has, ultimately, on the amount of money that we spend. It's my understanding that in the past, when workers have been furloughed, that they have been reimbursed with back pay.

NNAMDIThat happened during the last shutdown.

EILEENAnd in talking to several people that I know that work in the government, they have been offered the opportunity of becoming a -- being declared an essential worker, or going on furlough. And, in each instance, these people, who I know, have said that they have opted not to become essential because they will receive back pay for their furlough, and it's basically a paid vacation for them.

NNAMDIGovernor McDonnell, people gaming the system is what Eileen seems to be alleging. Any indications of that in Virginia?

MCDONNELLI thank Eileen for calling. Ultimately, it will be up to the Congress and the President to decide how to handle people that have been out of work, unfortunately. And the multiple, multiple federal programs with multiple layers of bureaucracy, you have people that don't -- that occasionally don't play straight with the rules. But I can't really speak to that. The Congress will make that decision. What I'm here to talk about today is the fact that this is not the way to run the railroad.

MCDONNELLWe've got to be able to get people -- the federal government operational. The basic function of government is to maintain its doors open and be open for business for the citizens, and they failed.

NNAMDILooking through to next year, there's talk that a debate about health care in Virginia could cause a major gridlock in Richmond. The Democratic candidate for governor, Terry McAuliffe says he won't sign a budget unless it includes a Medicaid expansion. What concerns do you have about where things might be headed in a few months in the Commonwealth?

MCDONNELLWell, I think those kind of statements that have been made really threaten a government shutdown in Virginia if the next governor doesn't get his way, if he is the governor. I think that's probably not responsible. The general assembly and I have made the decision this year that there's not going to be an expansion of Medicaid in Virginia, Kojo, until there's dramatic reform. President Obama said exactly this four years ago, that the system is not working well. There's got to be more fiscal discipline and responsibility and co-pays and other things.

MCDONNELLAnd yet, the Medicaid system that has just grown 1600 percent over the last 30 years in Virginia, now consuming 20 percent of the budget, we've decided that's got to be reformed dramatically first before any expansions. So that's the course we're on. If the next governor would like to change that they can have that discussion with the general assembly. But I think the general assembly has made up its mind.

NNAMDII got an email from Rita who asks, "What have you personally done to address and respond to the uninsured in Virginia? I have not heard from you or your party's plans to respond to this critical issue. Do you and Republicans just say tough luck?"

MCDONNELLNo, not at all. And I appreciate Rita's question because just two years ago prior to sequestration, I along with the other Republican governors -- I was chairman of the association at the time -- actually outlined about 31 separate ideas to hot to improve health care. We sent it to the United States congress, sent it to the president and unsurprisingly we got no response. But it was a number of things that could be done to be able to address this. And we've addressed things in the budget with more funding for free clinics and doing a number of other things that would help in this regard.

MCDONNELLSo the goal is one I think a lot of people share, how do we care for more people that don't have good access to quality health care and do it at less cost? One of my objections is the Obamacare plan is a one-size-fits-all top down policy that will ultimately rely on the government to manage most of the health care system. It's enormously expensive, has 30 new taxes. It's going to cost $600 billion to American businesses. And I think ultimately limits the choices and extends the waiting line.

MCDONNELLSo that's the problem with this policy and I think, you know, if there's a fair and open debate and not ramming it through like they did years ago, Kojo, there's probably a middle ground for people to have.

NNAMDIAnd finally here's Douglas in Howard County in Maryland. Douglas, you're on the air. Go ahead, please.

DOUGLASThank you very much. I think I heard the governor say a short while ago that implementation of Obamacare will end up restricting choice.

NNAMDIYes.

DOUGLASMy thoughts -- my understanding is that it actually expands choice and it allows 30 some or 40 some million people who haven't been able to get insurance to now get it. It doesn't sound to me like it's a restricting of choice. And now also on a personal note, this enables my daughter, who has a preexisting condition, to be able to get insurance on her own.

NNAMDIGovernor McDonnell.

MCDONNELLWell, Douglas, I appreciate the call. Listen, there are parts of the bill that I think -- that I have said are actually meritorious, the preexisting condition language, having your kids stay on your parents' policy until 26. Some of those things are fine. Expanding an entitlement system that is already not effective, as President Obama himself has admitted, that's my concern. And the fact that it's consuming 20 percent of the state budget headed toward 25, 30 like in other states, that's just not fiscally responsible until you make the reforms.

MCDONNELLI think the choices are you're now limited to what insurance plan you can buy based on a federal government exchange website. You're going to have limits to what doctors that you may be able to go to. It is forcing companies to make choices to stop their health care policies and being able to dump people in the Medicaid system. You're going to see more of that now over the next couple of months.

MCDONNELLSo obviously there's been a healthy debate about the policy. I don't think it's ultimately over. And ultimately, Douglas, you and the rest of America will decide at the ballot box about what you want in your health care system.

NNAMDIRobert McDonnell. He is the governor of Virginia. He's a Republican. Governor McDonnell, thank you for joining us.

MCDONNELLKojo, great to be on your show. Thank very much.

NNAMDIWe're going to take a short break. When we come back, "The Faithful Scribe," journalist Shahan Mufti and a story of Islam, Pakistan, family and war. I'm Kojo Nnamdi.