This is a rush transcript from "On the Record," July 28, 2009. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Vice President Biden has a challenge for critics of the president's stimulus plan.


JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: Our critics, who have a lot of reason to go out there and say in four months, we haven't remade the world and -- and -- and corrected this recession, which was eight years in the making, or maybe longer -- I ask them, What would you do? What would you do, those of you who don't like the Recovery Act? Would you not help maintain and hire new police officers? Would you not fund unemployment insurance? Would you not build these roads and highways and bridges and sewer systems? What would you do? Would you walk away?


VAN SUSTEREN: So what would the president's critics do? Let's ask one, Sen. Jim DeMint, joins us live, and he is also the author of the book "Saving Freedom; we can stop America's slide into socialism."

Good evening senator, and I suppose there are essentially two issues. One is the Recovery Act, and whether or not you are for or against it, and also as to whether or not it has actually been implemented at the speed of the pace which was promised.

Having said that, the vice president says what would you do, so there is your question. Would you do, sir?

DEMINT: Well, this was a government spending plan, and it has grown some government employees temporarily, but it hasn't met the promises they talked about, Greta.

Reduce the American option, Republicans had a number of different options that would leave more money in the economy. Basically, you keep the tax rates the same, make the current tax rates permanent, and reduce taxes to small businesses and workers.

That's a way to keep money in the economy rather than taking it out and have the government take who is going to get it.

They made promises that are unemployment would never go above 8% if we passed it. They wanted it passed in one day.

It hasn't worked, and it is really time to look at letting the economy work the way it should.

VAN SUSTEREN: All right, the unemployment figure, that's bad, that's grand, that's dismal. But the housing starts, there was a really favorable number yesterday that was the highest that I think it was in about eight years. That was a good sign.

Are there any signs either way to support or defeat whether or not the recovery act as passed in February is a good idea?

DEMINT: Well, Greta, earlier in the year, even in January, we were predicting that at the end of the summer or fall, we would see our economic to begin to come back. And we expected housing to come back. We hope to have an upturn in the fall.

But, frankly, it is difficult to connect this government spending with the upturn in housing. The Obama plan was supposed to improve employment, and we are not seeing that at this point.

But we introduced real options to this, and those options are still on the table. We have one of the highest tax rates in the world. The president is talking about increasing those taxes to pay for more government spending. That is only going to cost us more jobs.

So hopefully we will not continue to go down this road of bigger government and more debt, as Steve Moore was just talking about. But let's just leave the money in the economy and let the people who create jobs create more jobs for us.

VAN SUSTEREN: There is a profound difference between making payroll and making jobs, and I think that's probably a concern. I was simply using money now to make payroll, and, eventually, we will run into problems where we cannot make payroll anymore.

Are we actually creating jobs? I'm not sure how we measure it, if we're going to throw in this whole job-creation figure saving jobs, because I do not know how you can measure that you are saving jobs.

DEMINT: Yes. We have learned to not believe what they're talking about.

But I was a small businessman for most of my life before I ran for Congress with 10 or 20 employees, and just the taxes themselves, Greta, if I was able to keep a little bit more money, that makes it easier to hire or keep a person.

But if you keep my taxes at a high rate and even plan to increase them, as the Obama administration is talking about, it's hard to plan to expand your business, to buy new equipment.

So most of Americans and small businesses right now do not know what our tax rates are going to be next year. We don't know what the new government plan will be for penalizing us for health care.

I think what we're talking about now in Washington is his creating so much unpredictability that people aren't taking the risks and making the investments they need to make our economy grow.

But the American economy is resilient. Americans are out there trying to get the economy going again. But I don't think it has much to do with his big government spending plan we passed a few months ago.

VAN SUSTEREN: All right, this is random. Maybe everybody knows, but I do not. What was your small business?

DEMINT: I did marketing and strategic planning for a lot of companies, for a lot of hospitals and doctors' groups, nurses. I worked in health care for years, so health care has been one of my passions.

And I have been working on health care reform since I got into Congress, so it is really frustrating for me to see the Obama administration block all of the real reforms and then say we need the government to take it over. That really makes me want to pull my hair out.

VAN SUSTEREN: Before you pull your hair out, see if you can get everybody to read what they are voting on when it comes to health care.

Anyway, we have got to go, senator. Thank you, sir.

DEMINT: Thanks, Greta.

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