I sat down with Virginia Gov. Bob McDonnell today to ask him about progress on his agenda and about a controversial attempt by Republican state senators to grab extra seats in a redistricting measure voted on when a Democratic state senator was absent for the president’s inauguration.

Gov. Bob McDonnell (Bob Brown/AP)

McDonnell is riding high in the polls, but isn’t sitting on his laurels in his final year as governor. He launched ambitious transportation and education proposals, both of which have drawn substantial support from labor, business, technology and other groups. His transportation bill drew some flak from out-of-state anti-tax advocates because he would raise more revenue by replacing the gas tax with a dedicated portion of an increased sales tax. He says the lack of opposition within the state was no surprise. “We laid a lot of groundwork,” he tells me. “You have to reach critical mass with Democrats and Republican [on the need for a fix].” Although he says he is “surprised and pleased so many people have come on board,” the measure faces two critical days of legislative maneuvering. He concedes that had he not governed as a fiscal conservative and helped drive down the unemployment rate to a four-year low (5.5 percent) he would have faced stiffer opposition. “It gives me continued credibility we’re using a business-friendly, fiscally responsible approach,” he says.

If not for the transportation plan, his education proposal may have gotten more attention — and more heat. It is certainly bold: McDonnell calls for changes in teacher seniority, new laws making it easier for charter schools to open, grading schools on an A-F scale and closures of failing schools. Again, the governor facilitated passage by first getting buy-in even from the teacher’s union on revised seniority. And he did his homework, setting up a commission co-chaired by former Gov. Doug Wilder (D)’s secretary of education and making a trip to Louisiana to see post-Katrina reforms. He notes, “It’s passed the House [of Delegates] and was reported out of committee in the Senate 16-0.” McDonnell is under no illusion that parts of the proposal will be controversial (“we’ll have some tight fights”), but overall he sees widespread support.

McDonnell is well aware these are high stakes issues. “Transportation has eluded governors for 20 years,” he says. So he was none too pleased that with no warning Republicans in the state senate pulled a fast one, jamming through a redistricting measure when one Democrat was out of town for the inauguration. The change goes beyond mere “housekeeping” and would add possibly 6 Republican seats and moved approximated 2.5 million people into new districts. He picks his words carefully, but there is no mistaking he views the effort poorly. “I was very clear the focus this session should be on fixing schools, fixing transportation and [the budget]. Anything that takes us off topic is not good.” He stresses, in case there was any confusion, that the move was “not helpful.” The bill has yet to pass both houses and so far McDonnell has not issued a veto threat. That said, he’s made himself clear to the state Republicans what he thinks of this maneuver.

On a different topic, McDonnell has declined to set up a state Obamacare exchange, as have two dozen other governors. Not only does Obamacare not give states’ operational control over the exchanges but McDonnell is also concerned how the money is being spent and whether the states will be left holding a very expensive bag. “There is a legitimate question of the capacity of the feds to set up 25 exchanges,” he argues. Moreover, he makes the case that the entire operation is a gross boondoggle. “The amount of money given to the states [to set up the exchanges] — $50 million, $100 million – is outrageous,” he says. “It is a contractor’s delight.” He adds, “We already have an exchange — it is called Google.” Consumers, he points out, now have the ability to shop and compare insurance costs. The exchanges are there essentially to impose a mass of restrictions and regulations on the market. “Because it is so much government control, they have to set up a monstrous bureaucracy.”

It is Medicaid however that is the bane of McDonnell, and indeed of all governors. McDonnell contends that the rising costs are “unsustainable. “In Virginia,” he says, “Medicaid costs have gone up 1600 percent in 30 years. It went from 5 percent of the budget to 21 percent. It is a budget buster for every governor in America.” Under Obamacare, as modified by the Supreme Court, states can expand Medicaid rolls substantially or keep coverage where it is. McDonnell believes expansion  a bad deal. “There is an illusory promise for 100 percent [federal reimbursement for state expansion costs] for three years and 90 percent thereafter. Yeah, but where is that coming from?” Given the national debt is over $16 trillion, he is right to be concerned about the federal government’s promised level of support. “Most of us [governors] don’t believe it.”

McDonnell likes to cite President Obama’s remarks from 2009 that it was irresponsible to expand a program that was broken without reforming it. McDonnell says, “We’re not expanding in Virginia unless we have some way to control cost.” He reveals that while before the election governors were ignored — “we got uniformly blown off” — there has been increased conversation between the governors and federal government on the sorts of waivers they would need to control costs. He says the first test is whether the feds start giving waivers under the existing Medicaid system: “There is an opportunity to save the states and the federal government a lot of money if we engage in some common sense reforms.”

Finally, McDonnell is blunt on the potential for a defense sequestration, saying it will cost Virginia 130,000-200,000 jobs. “It damages our national security and is disproportionately unfair to the state of Virginal,” he says. He argues that the federal government has to control spending, but that it needs to be systematic, not an across the board slashing. “I will continue to lobby against it.” Democratic Sens. Mark Warner and Tim Kaine haven’t been very vocal, but McDonnell diplomatically defends their efforts. “I think [former] Gov. Kaine and Sen. Warner are opposed to the defense cuts. They understand fully the impact.”