This is a rush transcript from "Your World With Neil Cavuto," September 10, 2008. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: Well, is this the real lipstick on the pig, pork barrel spending? Barack Obama claims that Sarah Palin took earmarks when they were convenient and suddenly became the anti-earmark champion.

Republican Senator Jim DeMint rushing to her defense today in a "Wall Street Journal" op-ed. The senator joins me now.

Senator, good to see you again.

SEN. JIM DEMINT (R), SOUTH CAROLINA: Hey, Neil. Great debate. I have enjoyed listening in.

Video: Watch Neil's interview with Jim DeMint

CAVUTO: Well, I do want to talk to you a little bit about that, but you at least are stepping back and saying, here is a substantive issue. They have whacked the governor on the fact that she is a phony when it comes to spending. And you are trying to show proof that she is not, no lipstick, no pig remarks. Just, here's — here's the data.

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Why can't we all talk this way?

DEMINT: Well, we need to.

I mean, the Obama campaign is clearly rattled. And I think they know Americans are beginning to realize that she may be more qualified to be president than he is. So, he has gone after her on a number of fronts. And one of them is earmarks.

And I have had a chance to work with Barack Obama on earmarks. And he has asked for over $1 billion worth of these wasteful favors that we send back home. And, actually, the governor, we have been watching her for over a year, because she has taken on the establishment. She has cut the state budget. And she has turned back federal earmarks.

And if we could get more governors to do that, we could rein in federal spending. And that may be the only way we can do it.

CAVUTO: Well, you raise — but, Senator, you raise something very interesting, something I raised with you last week at the convention, that you're trying to frame her in a larger context.

You're trying to say, when it comes to the controversy right now on what her spending priorities were and are, when it came to the bridge to nowhere, she was for it, then she was against it, but you argue, I think, in your piece, that, while initially for it, she realized the boondoggle it was becoming and was eventually against it.

(CROSSTALK)

CAVUTO: Now, is that the position she should take in a debate, because Joe Biden is immediately going to go after her and say, you're phony, right?

DEMINT: That's not true.

I'm a recovering earmarker myself, Neil.

(LAUGHTER)

DEMINT: And, as mayor, you don't get the same perspective as governor. As governor, you begin to see how much state money it wastes, when we get these federal earmarks and have to match them with — with state dollars, even though they are not a state priority, and it wastes federal dollars. And it takes up all of our time up here.

So, I think she saw something as governor that made it very clear to her that it was hurting our country and it was hurting her state. And she did tell Uncle Sam that they — we could keep our money on that bridge to nowhere. Even though the money ultimately ended up in Alaska, it saved Alaskans a lot of money because they didn't have to build that bridge.

CAVUTO: Yes, over $200 million.

But, Senator, you substantively raised, as you did last week with me in Saint Paul, where you separate yourself, where Republicans separate themselves, from Barack Obama. This issue comes to mind. The issue of tax cuts come to mind. The issue of government spending comes to mind.

It seems to me — and I know I'm going to get a lot of heat for this from a lot of people who are big fans of hers, because I — she is an impressive candidate — but this is all sideshow, this issue of lipstick on a pig and everything. There is your butter, your very differences on these core issues. That's what you guys should be pushing, right?

DEMINT: I don't know what Obama meant by — by the lipstick thing. And, as you said, that's not the big issue, but it's part of the Obama campaign coming unglued in a lot of ways, starting to make remarks like that, that — well, his audience knew exactly what it appeared he was talking about. He was making a joke about Palin.

But that's not the issue. I mean, she is a legitimate leader. And I'm excited about her because I think she can help...

CAVUTO: All right.

DEMINT: ... change the Republican Party, Neil. And — and that's what we need to do in order to win the trust of the American people again.

CAVUTO: Well, you have some great talking points. They have some great talking points. Let's get back to those points. That's all I'm saying.

But, Senator, always a pleasure. Thank you, sir.

DEMINT: Thank you, Neil.

CAVUTO: All right.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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