• This is a rush transcript from "Your World With Neil Cavuto," July 7, 2010. This copy may not be in its final form and may be updated.

    BRIAN SULLIVAN, GUEST HOST: Union spending exploding, as state and local governments try to get slashing.

    (BEGIN VIDEO CLIP, "HOFFA")

    JACK NICHOLSON, ACTOR: I’m going to do what I got to do to get the union back.

    ACTOR: Yes, what does that mean?

    NICHOLSON: I’m going to do what I got to do!

    (END VIDEO CLIP)

    SULLIVAN: Only, these days, unlike the movies, unions are using cash, and lots of it.

    Welcome, everybody. I’m Brian Sullivan, for the aforementioned Neil Cavuto, and this is "Your World."

    Unions spending big bucks to back candidates who will protect their interests, so far this year, nearly $10 million on campaign ads. Compare that with about $3.5 million spent by corporations, all this as states and local governments begin scaling back.

    A new prediction today: Up to 400,000 jobs may be on the chopping block. We are going to talk to the guy making that prediction in a moment.

    Right now, though, to Florida Republican Senate candidate Marco Rubio, who joins us.

    Marco, good to see you on "Your World."

    What do you make of the big spending by unions?

    MARCO RUBIO, R-FLA. SENATORIAL CANDIDATE: It doesn’t surprise us. There’s an agenda here in this country among some on the left to expand the role of government, to convert America into a European-style economy.

    I think the administration and this Congress is leading the way in that effort. And their allies politically are some of these labor unions, who are going to be funding these efforts to try to influence the elections in 2010 and beyond. So, it’s not surprising. For them, this is what — I mean, this is the cornerstone of what they believe in and what their agenda is, and it’s what this election is about.

    (CROSSTALK)

    RUBIO: There’s a crossroads choice for America.

    Go ahead.

    SULLIVAN: I was going to say, what is wrong with that? Corporate America has been doing that for years.

    RUBIO: There’s nothing wrong with it. They’re perfectly within their rights to do it.

    And what’s important is that those of us who believe in the free enterprise system step up and run for office, and those who are not running for office help those candidates who are running for office to lay out a very clear argument. And that is that America can choose. We can either become like Western Europe and go down the road that they’re on right now, or we can cling and hold onto the things that have made us exceptional and unique, such as the free enterprise system, which has made Americans the most prosperous people in all of human history.

    SULLIVAN: We have seen some victories. Health care obviously comes to mind. What do you think the unions want now? What is their big agenda? Is it maybe reinvigorating card check?

    RUBIO: Oh, absolutely. I think that’s the Holy Grail of the labor unions, is card check, which would be devastating to America’s economy.

    There’s already so much uncertainty surrounding America’s economic future. The job creators lack confidence in our future. They see all the rhetoric and the policies coming out of Washington are anti- entrepreneurial, anti free-enterprise. And so they’re not creating jobs.

    I mean, private sector job growth in America has come to a virtual standstill. And so card check would be devastating, not just because of its practical implications, but because of the psychological impact it would have on those that are trying to decide whether — where to invest their money in the years to come.

    SULLIVAN: You wrote today about how to slash debt. States, municipalities, cities, towns, you name it, are drowning in debt. How do we get out of that?

    RUBIO: Yes.

    Well, I think, at the local and at the state level, a lot it’s structural. In essence, these governments have grown larger than their revenues can sustain. But it’s also a pending pension crisis across America.

    I know you’re going to start to see states and local governments begin to struggle to make their payments. There are places in Florida, for example, that 20, 30 percent of their budget is being spent on pensioners and pensions. So — and that’s a real problem, understanding these are promises that were made and things that have to be kept.

    But, on the other hand, they’re unsustainable. So they are going to have some real issues to confront in the years to come. At the federal level, there’s no recession in federal employment. Federal employment has continued to grow. And one of the things we need to do is freeze new employment hires at the federal level and in the non-defense sector.

    SULLIVAN: And do we need to tell somebody, public sector worker who is 45, I’m sorry, Mr. and Mrs. Worker, you can’t retire at 55 like you thought; you are going to have to retire at 65; raise retirement ages across the board?

    RUBIO: Well, obviously, each pension is different. Each retirement plan is different. So, the changes they will have to make are all defense.

    But there is no doubt that pension plans can’t pay out money they don’t have. And an increasing number of them are going to continue to struggle to meet their obligations. There’s going to have to be some dramatic reforms around the country.

    Each plan is different, of course, so the changes they will have to make are very different. But, at the federal level, the most important thing we can do is tackle the debt. And although it’s largely being driven by the entitlement programs, federal employment, the growth in federal employment and benefits is a contributing factor to runaway debt. And it’s something that needs to be confronted in the near term.

    SULLIVAN: Hey, if somebody has got their own money, who cares when they retire? It’s their own cash.

    RUBIO: Right.

    SULLIVAN: But should we do something extreme such as capping the number of years a pension can pay out based on the number of years somebody worked? For example, if you worked 25 years in the public sector, but live for 40 years after that, you will extract much more than you ever put in. Do we need to start implementing some hard caps?

    RUBIO: Well, again, these pensions can’t pay out money they don’t have. And so they’re all in a different boat, although many of them, if not most of them, are in trouble.

    SULLIVAN: Actually, Marco, they have been paying out money they don’t have, right? They have been taking future obligations...