This is a rush transcript from "Your World," November 29, 2011. This copy may not be in its final form and may be updated.
NEIL CAVUTO, HOST: Well, everyone is so focused on the race for the White House in 2012, we forget there are other things going on.
My next guest says try the grand old race for the United States Senate. Right now, Republicans would need to pick up four seats to take the majority away from the Democrats.
Sarah Steelman wants to be one of them. She hopes to secure the Republican nomination in a very crowded field to challenge the incumbent Democrat, Claire McCaskill, in Missouri.
We reached out, by the way, to Senator McCaskill. She has been on the show before, so we hope that she will be back on the show. And her folks say that that probably will happen.
Well, you are considered one of the folks right now, Sarah, who has a very good chance of picking up this seat. What is going to be the signature issue, or what is already?
SARAH STEELMAN, R - MISSOURI SENATORIAL CANDIDATE: Well, Neil, I think the signature issue is spending and jobs.
You know, until we stop spending money we do not have, we are not going to get control of the budget and the economy. And Claire McCaskill and President Obama continue to put the wrong policies in place that have driven this economy into the ditch. We have to stop spending money we do not have. It is just that simple.
CAVUTO: But both sides do. Right? I mean, how would you talk or would you talk to fellow Republicans should you get in about their penchant for talking the talk, but not walking the walk when it comes to big budget debate agreements, barely keeping on top of the interest payments, and a deal that many of them were willing to sign on to that would still add $9 trillion over 10 years?
So that doesn't look very brave to me.
STEELMAN: Well, you are right.
I mean, there are as many Democrats that are guilty are Republicans and their spending habits. And the fact is, is that Washington is just broken. And it is not working. The debt deal was ridiculous. It didn't work. They form a super secret committee. Nobody knows what the negotiations are -- are going on behind these closed doors.
And what do they come out with? Nothing. It was a failure.
CAVUTO: Here is one of the latest talks that are going on now.
There's this talk, as you probably heard, of extending the president's payroll tax cut, this time extending it to employers, so that they could save a little money, too, the big bone of contention right now between Republicans and Democrats is Democrats want to slap a surtax on those making $1 million or more to pay for that. How do you feel about that?
STEELMAN: Well, I am for lowering taxes.
But the fact is, this is just a political gimmick. They want to get Republicans to vote for a tax increase to pay for this cut in the payroll tax. And, Neil, I would ask you, if it is good enough to temporarily lower rates, why isn't it good permanently to do that?
What we are too used to in this country and what Congress keeps doing is putting Band-Aids on all these solutions. Let's look at permanently lowering tax rates, so that people can plan into the future. The fact is, I'm an economist by training. And I know that what works is a permanent increase in buying power.
But you do not get that with these -- just these temporary tax decreases. Now, if it were a stand-alone, I would vote for it, if it was just a cut in the payroll taxes. But this is just a political gimmick they're doing.
CAVUTO: No, I understand what you're saying, Sarah.
But do you find it odd that some of your Republican colleagues, leaving aside the tax on millionaires, have made a big deal before that idea came up of making sure the payroll tax cut was paid for? This stands in steep -- stark contrast to their prior position on marginal tax rate cuts for the upper income, that they didn't really have to be paid for, but on this payroll thing, they say it should be.
Are they being inconsistent?
STEELMAN: Everything about Washington is inconsistent, because they say one thing and do another, which is what my opponent, Claire McCaskill, is very, very good at.
And the fact is that we need to look at reforming the tax structure in this country. And we have a good opportunity to do that right now.
STEELMAN: But they are failing to do it.
And we know that Washington doesn't work because there is no incentive in there for people in Washington to want to cut spending, to want to close corporate loopholes in a tax structure that doesn't work anymore. Why? Because they get to reward their contributors, their special interest groups with either tax subsidies, fiscal stimulus, different kinds of loopholes in the tax code.
CAVUTO: Well, both sides, both sides do play that game. But...
STEELMAN: They do play that game.
CAVUTO: All right.
STEELMAN: And that is what causing all the problems.
STEELMAN: And the people in this country get that. The people who don't get that is Washington. And that is what I am running against.
Neil, I will tell you that I am the candidate that the status quo fears the most, because I am conservative who is going to do what I say I'm going to do.
And what do we need to do right now is cut spending, stop spending money we do not have.
CAVUTO: All right, we will watch very closely.
Sarah Steelman, thank you very much.