Meg Whitman may be a newcomer to politics, but she seems eager to reopen a very long running debate about how much taxpayer money is being used properly... and how much is being wasted.

In a one-on-one interview today, the GOP gubernatorial candidate said there's between $10 billion and $15 billion of "fraud" and "mismanagement" in state government. As such, she says, she disagrees with Governor Schwarzenegger that there's no more "low hanging fruit" to pick when it comes to erasing the deficit.

Shortly after our interview, she repeated the 'waste, fraud, and abuse' theme in a town hall meeting in the Sacramento suburb of Roseville where she pitched her idea of a citizens' grand jury. And she made clear that she thinks some of Schwarzenegger's budget choices could have been avoided.

No catch phrase has been more bandied about in California politics over the last decade than 'waste, fraud, and abuse' and it's easy to understand why: it taps in to the disbelief of many citizens flabbergasted by how the state could have possibly gotten into such a rotten fiscal situation.

And it was Schwarzenegger who turned that phrase into political dynamite in 2003. "The first thing I will do is open up the books and show where is now the waste going on in government," said the Republican in comments reported by ABC News the day before the recall. On his 2003 campaign website (an archive is here thanks to UCLA), he estimated the waste, fraud, and abuse at "more than $250 million per year."

During the 2009 budget impasse, the governor focused in on one specific state program -- In Home Support Services (IHSS) -- but other times, as I pointed out today to Whitman, he's backed away from the fiery political rhetoric about huge amounts of fiscal wrongdoing.

"That's not true," she said. "I don't think he said that." You can hear our exchange below.

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Actually, he did say it. On May 12, 2006, I asked the governor during a budget press conference about those 2003 promises. "We did not find the kind of abuse that I thought there is," said Schwarzenegger.

Whitman actually made two assertions of waste, fraud, and abuse in our interview today: $6 billion in combined fraud in Medi-Cal, IHSS, and workers compensation, and then a later reference to $10-$15 billion across the spectrum of state government, which you can hear below:

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Her campaign is using three sources to back up that assertion: a digest of news stories compiled by the California Taxpayers Association, an online chronicling of reported welfare fraud by the state Department of Social Services, and a 2009 Sacramento County Grand Jury report on IHSS fraud (a helpful leg to stand on for Team Whitman's intended news headline of how she as governor would convene a statewide "grand jury" to root out such abuses). A campaign adviser this afternoon clarified Whitman's statement, saying that the larger number isn't necessarily one she believes can be found in one single year's budget but rather a reflection of the broader problem that's been chronicled in the past.

The Republican candidate said the existence of such waste is why she would not have proposed what Schwarzenegger did on Friday -- the elimination of the state's welfare-to-work program CalWORKS. "I would have reformed welfare, I would not have cut CalWORKS completely," she said.

Meantime, the candidate made another interesting remark while discussing waste, fraud, and abuse in our interview. She recalled a recent meeting with UC President Mark Yudof and a discussion about the recent cuts to the UC budget during the state's fiscal crisis. "He thought that the first 10% cuts actually made the UC system stronger and better," she said, "and that there's ways to restructure how we deliver education, in a way that can be more cost effective."

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I called Yudof's office to see if that's how he remembers the conversation. The response was... not exactly. "He doesn't recall saying it in that context," said Yudof's communications chief, Lynn Tierney. She says the UC leader simply meant that the budget cuts forced the university system to re-examine its operations in ways that might be beneficial.

In fairness, that nuance is in Whitman's comments. But does any of that comes across on the campaign trail?

Take, for example, CalTax's chronicling of 'waste, fraud, and abuse.' While many examples are truly bad people doing bad things with taxpayer dollars, the list also includes the hundreds of millions, even billions, being spent by the federal court appointed receiver for prison health care. It also includes millions of dollars spent on lawsuits over foster care and conditions inside some schools. Those kinds of expenses are certainly not a great use of precious dollars, but they do seem to be driven partly by an unwillingness of state elected officials to make prudent fiscal decisions years ago, and that lack of good judgment led the state into costly legal action.

And perhaps the most intriguing question is whether this line of campaigning resonates with voters the same way it used to. As noted earlier, the existence of 'waste, fraud, and abuse' makes many people seethe with anger. But in an era where the spending reductions have been so large and so serious, it will be interesting to see whether the public still believes that elected officials are, intentionally or not, still turning their backs on a massive waste of precious cash.

[Note: We'll be running my radio story on the Whitman interview Wednesday on The California Report, and will post audio of the entire half hour conversation online at that time.]