CHARLESTON, South Carolina (Reuters) - South Carolina Governor Nikki Haley on Monday picked first-term Republican Representative Tim Scott to fill the U.S. Senate seat being vacated by fellow Republican Jim DeMint.
Speculation had centered on Scott, 47, as the likely replacement since DeMint announced on December 6 that he was stepping down from the Senate in order to head the Heritage Foundation, a conservative think tank.
When he takes office, Scott, 47, will be the only African-American member of the Senate and the first black senator from the South since the late 1800s.
But his departure from the House, coupled with the defeat of fellow conservative Allen West of Florida on November 6, will leave the Republicans without a black representative in the lower chamber.
"Our nation needs some backbone," said Scott who attended the announcement by Haley at the state Capitol in Columbia along with DeMint.
Scott questioned where the country is going fiscally and said that his work would center on tax reform and spending controls.
"We have a spending problem in America ... You could take all the revenue from the top 2 percent and you simply could not close the annual deficit. That's a challenge," he added.
DeMint congratulated Haley on her choice describing Scott as "a principled leader" who "will make an outstanding senator for the people of the South Carolina and an important voice for conservatives across the nation."
DeMint, 61, said Scott has inspired him since the first time he heard him speak in public. "There is a way out of this quagmire we've got in Washington and you've got great ideas," DeMint said to Scott. "What the federal government is doing is likely to end up with some kind of meltdown."
Scott's appointment keeps DeMint's seat in Republican hands, but Democrats will hold control 55-45 when the new Senate meets in January.
Scott will serve through 2014, when a special election will be held two years earlier than would have been required had DeMint decided to serve out his term. Haley predicted Scott would "sail through" the 2014 election.
Scott's House of Representatives seat will be filled by a special election to be held in May.
Scott was elected to the U.S. House of Representatives in 2010 with support from the fiscally conservative Tea Party movement that also helped Haley win the governor's office that year for the Republican party.
A real estate company owner prior to being elected to Congress, Scott served on the Charleston County Council for 13 years, and in the South Carolina House of Representatives for two years.
Scott, who represents a coastal district that includes Charleston, has been one of the most conservative members of Congress. He sponsored legislation to repeal the Affordable Care Act, known as "Obamacare," opposed raising the nation's debt limit and supported DeMint's fiscal "cut, cap and balance" pledge.
DeMint, a leading voice in the modern American conservative movement who has riled fellow Republicans as well as Democrats, surprised both parties when he announced his retirement.
First elected to the Senate in 2004 after six years in the House of Representatives, DeMint was re-elected in 2010 by a wide margin.
Last year, DeMint was a founder of the Senate Tea Party Caucus, which now has four members. Three more Tea Party favorites were elected to the Senate.
His resignation came only came two days after he won praise from hard-liners by ripping into one of the top Republicans, Speaker of the House of Representatives John Boehner.
The 61-year-old South Carolinian, who preaches the value of small government and freely criticizes fellow Republicans, blasted Boehner for violating a long-time party taboo: proposing increased revenue as part of a deficit-reduction plan.
DeMint's small-government views became especially popular in recent years with the rise of the fiscally conservative Tea Party movement.
That movement suffered some big losses in last month's election, however, when President Barack Obama won a second term and the Republicans failed to win back the Senate.
"The reason I'm leaving the Senate is I believe that this idea of taking the case to the American people is something that I can do much more effectively from the Heritage Foundation knowing that my seat is filled with someone who's going to take the stands that we need to in the Senate," DeMint said.
Founded in 1973, the Heritage Foundation, a few blocks from the U.S. Capitol, is one of the nation's leading think tanks. With 700,000 members, it has helped shape the debate in Washington for years.
Editing By David Adams, Eric Walsh and Alden Bentley