Democrats in denial about government spending ... and Pres. Obama running out of excuses

Dems in denial about spending?

Former senator Jim DeMint on Democrats' claims that the government doesn't have a spending problem

This is a rush transcript from "On the Record," January 30, 2013. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: And it's not just a blame game over the shrinking economy, Republicans, Democrats also dueling over government spending, yesterday, Democratic senator Mary Landrieu denying Washington even has a spending problem.

And Speaker of the House John Boehner is saying President Obama told him we don't have a spending problem. Really? Former senator Jim DeMint joins us.

Well, if we have no spending problem, Senator, why do we need to extend the debt ceiling? Why do we need more money?

(LAUGHTER)

JIM DEMINT, HERITAGE FOUNDATION/FORMER S.C. SENATOR: Greta, the president is running out of excuses. He can't blame the last administration because he is the last administration. President Obama has spent more and created more debt than any president in history. Yet we've got the slowest recovery of any recovery in history.

I spent last summer going around my state talking to small businesses, dozens of them. So it's very clear to me what is happening now. They were already beginning to pull back because of the expected costs of "Obama care." The Dodd-Frank legislation that was basically federal takeover of our financial system is making it harder for businesses to get loans.

And you look at the expected tax increases, which businesses were trying to plan for. The uncertainty really goes back to the president's policies. It's not obstruction. I wish we had had more of it. The policies in place are hurting our economy. And even more than that, the uncertainty from the mounting debt on individual Americans is putting us in a position where it's going to be harder to dig out of it.

VAN SUSTEREN: Well, if we don't all sort of agree on what the problem is, it's sort of hard to solve it. That's for starters. And if President Obama indeed said that to Speaker Boehner, that we don't have a spending problem, even his own debt commission, which is on the speakers Web site, says even after the economy recovers, federal spending is projected to increase faster than revenues so the government will have to continue with borrowing money to spend -- that sounds like a spending problem. Now, it may also, I suppose, be a revenue problem, but we...

DEMINT: Greta...

VAN SUSTEREN: ... can just squeeze so much out...

DEMINT: We've doubled spending in the last 10 years, and revenues this year will be at historic highs. So you don't have to guess where the problem is. We're spending too much, and we need to cut spending. And we need to do it in a predictable way so we don't shake up the economy. The fact is, there have been no defense spending cuts yet.

VAN SUSTEREN: Not yet. There -- I mean, the...

DEMINT: And so for them to blame the negative growth on that -- it certainly was a part of it as defense contractors begin to pull back. But this started last summer, businesses all over the country beginning to pare back their plans for this year and the end of last year because of all of the policies that President Obama put in place.

VAN SUSTEREN: But I think -- I think it was also a little bit of the insanity of what was going on in this town. I mean, the fact that nobody knew what his or her taxes were going to be...

DEMINT: Sure.

VAN SUSTEREN: ... business taxes, and it wasn't as though that -- this is the thing that I -- for the life of me, I can't understand how people in good conscience in this city can withstand that, is that a year- and-a-half ago, they created this deadline about -- about the -- about raising taxes.

DEMINT: Right.

VAN SUSTEREN: We knew the taxes were going to go up. And they waited a year-and-a-half to do anything until the -- the -- burning the midnight oil at the end of the year this year.

DEMINT: It was all theater.

VAN SUSTEREN: All theater. In the meantime, there's so much uncertainty that everyone sort of sits back and doesn't do anything, puts the economy on stall, all because the president, the Senate and the House don't do their job on time and they drag it out. And when they get to the end of the deadline, they create new deadlines.

DEMINT: They do. And they try to use the drama and the theater to force something through at the last minute that otherwise couldn't pass.

But we have temporary tax policies, temporary -- well, unknown regulations that are coming out at a faster rate. I was in small business, my own business, for over 15 years. I don't know how anyone can operate in this environment. I've had businesses show me two plans. If their taxes went up, which they did, they were going to cut back on 25 people. And this was a 150-person firm.

So it's common sense, Greta. We don't have to guess at what's happening. It's not Republican obstruction. Fact is, it is the policies that the president has put in place is making it more and more difficult for businesses to succeed.

VAN SUSTEREN: But it's -- you know, it's -- it's disheartening because, you know, people are -- business people are sort of parking money, not making investment decisions, not doing anything which might create jobs, but it's because they simply -- either -- either they feel overwhelmed or overburdened by policies they don't understand -- in fact, you and I were trying to figure something out when we sat down here about the health care.

DEMINT: Right.

VAN SUSTEREN: And if we're struggling to try to figure out what this is -- I mean, that's not a very good use of one's time. Probably all across America, businesses are trying to struggle to figure this out.

DEMINT: They are, and...

VAN SUSTEREN: You know, instead of making things simple and effective and efficient and fair, we're getting all these thousands of regulations that are confusing and stagnant and just enrage people!

DEMINT: Businesses have to have a fleet of lawyers to figure out ObamaCare. They're afraid of being penalized. A lot of them are keeping their employee count down so they won't get over the 50 threshold. Again, as a businessman, it's pretty clear what's happening here, and it's just bad economic policy.

But even worse, the spending, Greta. And we're not talking about it enough. The president says it's no problem. But we're spending more than...

VAN SUSTEREN: Well, you know, frankly...

DEMINT: ... we're bringing...

VAN SUSTEREN: I don't know how you can say spending's not -- if spending's not a problem, we don't need to raise the debt ceiling.

DEMINT: You're right. We have to borrow money to keep the lights on. And the goal now of the whole conservative movement is push the Congress to put our country on a path to a balanced budget. The president calls that radical. But over a 10-year period, if we don't stop spending more than we're bringing in...

VAN SUSTEREN: We're in trouble.

DEMINT: ... we're going to bankrupt our country.

VAN SUSTEREN: Senator, thank you, sir. Nice to see you.

DEMINT: Greta, good to see you.