Tuesday, June 28, 2011

An Interview with Marco Rubio

Rising Senate star Marco Rubio of Florida put out a strong growth message in our interview last night. Shrink size of government, broad-based flat tax reform, roll back regulations. Balanced budget amendment, with tough spending caps. Best solution for an ailing middle class: Create jobs. He believes the 21st century can be an American century if we follow this path. There are few people more articulate than the gifted Sen. Rubio.


We welcome back Senator Marco Rubio of Florida to THE KUDLOW REPORT. It's
been a while, Senator, thank you.

Senator MARCO RUBIO: Yeah, thank you. Thanks for having me.

KUDLOW: All right. Well, it's great to have you as a senator. I appreciate
it very much.

All right, the debt talks are very hot. President Obama's involving himself
now. He's meeting with the senators. I want to ask you, over the weekend,
the president said we can't simply cut our way to prosperity. What does he
mean by that and what's he signaling in terms of these debt talks?

Sen. RUBIO: Well, I'm not sure what he means by that. I can tell you that
we can't cut our--only our way out of prosperity. We need to grow our way
into prosperity, and that means economic growth. And government can be a
facilitator of that in creating an environment where job creators are
incentivized to create jobs. Job creators are not governments, they're not
presidents, they're not US senators. Job creators are everyday people from
all walks of life that start a business or expand an existing business, and
what we need are government policies that make it easier for them to do that
and that encourage them to do that. So if that's what the president means, I
think that's very good.

If on the other hand what he means is we're going to borrow a bunch more money
and spend a lot more money to try to do what he tried to do with the stimulus,
I think that's very bad news for our future.

KUDLOW: I mean, he has his high-speed trains. He's got his infrastructure.
He's got his clean energy technology and so forth. And I want to also put in,
Vice President Biden over the weekend at a Democratic event said we can't have
the middle class place--have all the burden of this deficit reduction and
debt. And then he singled out hedge funds who have a 15 percent capital gains
tax rate for their income. I guess my question is, what is Mr. Biden saying
along with the president? Are we looking at a significant tax increase as
part of this debt ceiling?

Sen. RUBIO: Well, I think clearly many in the Democratic base have said that
they want that on the table. Unfortunately for them, and I think fortunately
for the country, I don't think there's going to be support for that in
Washington, including among many Democrats, I hope, who realize that we

KUDLOW: No tax increases. The Democrats won't take a tax...

Sen. RUBIO: Well, there can't be a tax--well, I think some Democrats want
there to be a tax increase, but I think ultimately the votes are not there,
certainly in the Senate, I hope, because--I could be wrong, but I know among
Republicans the votes aren't there. Because, number one, there's no way you
can tax your way to prosperity. Number two, our tax code is already a source
of great uncertainty and worry and concern about the future. And number
three, even if he wanted to, which I do not, there's no tax they could raise
that would accomplish the deficit reduction they're talking about. I mean, if
you raise to 100 percent the taxes on every rich American under their
definition of rich, which is people making over $250,000 or more a year, it
still wouldn't make a dent on the debt.

So, look, we've got to--we need a combination of two things. We need fiscal
restraint. We need a government that begins to stop spending money it doesn't
have. And we need pro-growth strategies. We have to grow this economy.
There's not enough focus on the growth element of this.

KUDLOW: What about the issue of deductions, tax deductions? Now there's a
lot of talk, even by some Republicans in the Senate, that they could take some
downward adjustment or elimination of certain deductions as part of a
compromise package. Does that work for you?

Sen. RUBIO: Well, I think we're in need of tax reform to make the tax code
simpler and easier to comply with and more certain. I don't think it's a
source of revenue, and that's why I believe in the revenue neutrality in any
of those measures that are taken. Again, I think if you want more revenue for
government, the way you do that is by growing your economy, not by raising tax
rates on certain people or getting rid of deductions. So if they want to make
the tax code flatter and fairer, that's fine. But if they--and I think that's
a good idea. But if they want to use it as a way to raise revenue--in
essence, if it's not going to be revenue neutral, I think that hurts economic
growth, which has to be our number one priority.

KUDLOW: How do you react to what Mr. Biden is saying regarding the middle
class? I mean, I guess the point is, the middle class rely on Social Security
to a large part. They certainly rely on Medicare. At least Medicare is on
the chopping block in these debt talks. Cutting Medicare back, what do you
give the middle class in return? They've sort of taken it on the chin. You
know this. Oil prices, gasoline prices.

Sen. RUBIO: Sure.

KUDLOW: Wages are not keeping up with inflation. What is your message? What
is the Republican message to the middle class?

Sen. RUBIO: Well, a couple of things. Number one, on oil prices, we have no
one to blame but the government for a lot of that. And quite frankly, this
administration has made it harder, not easier for Americans to produce their
own energy. And it's contributed greatly to the price of oil and to the price
of--at the gas pump.

As far as Medicare and Social Security are concerned, let's focus on Medicare
for a moment because I think that's an important one. It's going to bankrupt
and it has to be saved. I want to save Medicare. The status quo doesn't save
Medicare. The status quo bankrupts it. So there are a lot of people out
there criticizing Paul Ryan's plan. I would say to them, `Well, what's your
plan?' Where is the president's plan to save Medicare? Where's the
congressional Democrats' plan to save Medicare. Where's the Senate Democrats'
plan to save Medicare? They don't have a plan to save Medicare. Their plan
is to use it as a electoral weapon in the next election. So what I--my
message would be very simple. If we keep doing the things that we're doing
now with Medicare, it will go bankrupt very soon. It won't exist when I
retire or when my child retire and it'll lead to bankrupting this country. So
I think--I am for reforms that save Medicare and keep it solvent.

KUDLOW: And do you think that there's a middle class problem there inside
that message for the Republican Party? Because I think it is true, in part,
in part, that the kinds of reductions envisioned by Paul Ryan, let's say, will
clip down some of the middle class benefits. Now maybe all people's benefits,
but the middle class will share in that.

Sen. RUBIO: But the most important thing for middle class and working class
folks in this country is jobs. They want to be able to go out and earn a
livable wage so they can raise their family with and leave their children
better off than themselves. And my argument is that what's done that in
America has not been our government. Certainly government can create an
environment where that's possible, but what's done that in America is the job
creators. And what we need is an environment of certainty when it comes to
regulations, of certainty when it comes to our tax code. We don't need
leaders that are out there using rhetoric that discourages job creators from
investing in America so the jobs return to the United States and are here
again, so that middle class families can feed their families, raise their
children and provide them opportunities they themselves didn't have.

KUDLOW: What will it take to get you to vote for a debt ceiling compromise?

Sen. RUBIO: Well, I--you know what? I outlined it in the Wall Street op-ed
I wrote over two and a half months ago. I don't--this debt limit debate
shouldn't be just about the debt limit. It should be a comprehensive
opportunity to deal with the issues that confront our nations economically.
So I want some sort of regulatory reform. I want some sort of tax reform.
I'd like to see us tackle or at least begin to tackle how to save Medicare and
Social Security, or at least Medicare in the starting. I'd like us to see a
balanced budget amendment. I'd like to see a spending cap. So these are the
kinds of things I'd like to see in a package. I have said from the beginning
that this debt limit debate is a golden opportunity to begin to confront the
serious issues that stand between us and the next American century, which is
what we have an opportunity to build here.

KUDLOW: Speaking of which, the next American century--really my last
question, In in your excellent maiden speech on the floor of the Senate, I
guess about 10 days ago, you say people aren't the problem in America. It's
the government that's broken. Could you just briefly tell us what you had in
mind there.

Sen. RUBIO: There's nothing wrong--yeah, there's nothing wrong with the
American people. Americans haven't forgotten how to create jobs. Americans
haven't run out of good ideas. But we do have a broken government that
through tax policies and regulatory policy and all the uncertainty they're
creating, are standing in the way. If only our government could do a few of
these things right, the American people will give us here--the new
American--the 21st century will also be the American century.

KUDLOW: You worry about decline a lot, but are you in your heart an optimist
that we can solve these problems?

Sen. RUBIO: I am. I am. Because we have the greatest thing--we have the
greatest people on Earth. All we need is a government that does its job. And
if we have that, the 21st century will be greater than the 20th for us. And
that's--I know that's hard to imagine, but that's the opportunity before us

KUDLOW: Senator Marco Rubio from the great state of Florida, thank you very
much for joining us on THE KUDLOW REPORT.

Sen. RUBIO: Thank you.

KUDLOW: All right, great stuff.