MARCO RUBIO IS REHABILITATING. The Florida Senator had a bumpy 2013, during which his work toward a comprehensive immigration deal earned rightwing scorn. But as he weighs a presidential bid in 2016, the freshman Republican is reemerging with a hawkish foreign policy message and a slate of domestic prescriptions designed to form the backbone of a conservative economic agenda. Last Wednesday, he delivered a speech outlining how he’d update safety-net programs to alleviate pressure on working and middle class families. The address won praise from conservative thinkers as the first serious stab by an elected Republican at offering a new governing vision for the party — and some criticism from the left for being light on details. After the speech, Rubio sat down with Fortune in his Senate office to talk about his proposals.
You gave a speech today summarizing the work you’ve been doing over the last six months rolling out an economic policy program, and part of this has been describing an anti-poverty agenda. You’ve worked with scholars at the American Enterprise Institute as you’ve developed this program, including AEI President Arthur Brooks, who said something pretty striking recently: “The biggest reason that people, particularly people who are poor, think that Republicans don’t care about people like them, is because they talk as if they don’t.” You talk about this issue in terms of your family’s experience, but as you listen to other Republicans talk about this, is there a credibility deficit?
There’s two fundamental problems. First of all, you have to talk about people. The purpose of policy is to talk about the people those policies would help. I think there’s another reason, of course. The Democrats have invested a lot of time in telling struggling Americans that Republicans or anyone who doesn’t agree with their agenda doesn’t care about people who are struggling. But the fundamental challenge we have in this country is that a growing number of Americans no longer feel that hard work and perseverance and your own talents are enough to get ahead. That somehow the American dream has slipped away from them. So all Americans in public service need to do a better job of addressing the challenges that struggling Americans face. I think as a Republican in particular we need to improve, because our policies are so much better for people who are struggling than the policies the left is offering.
How do you improve how you talk about this?
It’s not just improving how you talk about it. We’ve got answers for them. But it begins by outlining the challenges that real people are facing. One of the reasons people feel so alienated from the American political process is in the fights we get in here in Washington, no one’s ever talking about them and the challenges they’re going through. So they rightfully conclude that no one here understands what they’re going through, cares about what they’re going through or has any answers for them. And so I always try to, when I discuss these issues, first outline who it is we’re trying to help, describe the challenges they face, and then propose the solutions that would help them and in some instances contrast them what we’re doing now or what others are proposing, neither of which are working.
You talk about your experience, particularly in the context of immigration reform, that you learned that the political dynamic right now doesn’t favor big fixes to complicated problems. One of the things you talk about in your anti-poverty plank is a complete overhaul of the way the federal government treats poverty programs. You want to establish this flex fund to give authority back to the states to experiment. How do you that considering what you’ve said about what the environment in Washington will allow?
What I’ve said is the environment is not conducive to comprehensive reforms of difficult issues like tax reform, overhauling the entire tax code, which applies to every aspect of American life. Or immigration reform, which comes with very deep political complications because of the lack of trust people have that the federal government will enforce the law. Our anti-poverty programs, or our safety net programs, are already in place. And what we’re arguing is not to overhaul them in the sense that we want to get rid of them. What we’re talking about is how you would fix them. Now whether you’d do that through a series of bills or a major piece of legislation is obviously a hurdle we’ll have to overcome. What’s very clear is that the safety net programs we have now are incomplete, because while they may alleviate some of the pain of poverty, they don’t cure poverty. And we want to cure it. We don’t just want to deal with the pain of it, which is important. But we also want to cure it, so people who are living trapped in poverty can emerge from it and never have to depend on government again.
You talk about the unwillingness of the Obama administration to work with Republicans. Where recently have you tried? There are some things you’ve proposed where you’re working with Democrats: with Chris Coons to streamline the commercialization of government R&D; and with Ron Wyden to add transparency to higher education so kids know what they can expect to earn with certain degrees. Those are both goals the Obama administration has embraced. Have you tried working with them?
Absolutely. Not only have we tried to work with them, we’ve never reached even been reached out to on how we can work together on it. I’ll give you a perfect example. A few weeks ago- I have a well-professed interest in student loan debt because I had some myself, a significant amount, that I had even when I was sworn into the Senate, I had significant student loan debt. And I’ve talked about that for years. I actually have a number of proposals to address this, from income-based repayment legislation all the way to creating alternatives to student loan debt, and everything in between, like fixing the accreditation model so that we can have alternatives to higher education, so college with cost less. Not once have we seen any good faith effort to work together on this. On the contrary, what you saw was a political effort a week ago to bring to the Senate floor a bill by Senator Warren that would lower the monthly payments on student loans by a nominal amount but would do nothing to make college more affordable or to provide alternatives to student loans for students, and that’s just one example. The same is true with the Earned Income Tax Credit issue I’ve discussed. The President brought it up in the State of the Union, actually cited me by name as someone who had proposed changes to the way that program works. But there’s been no follow-up in regards to working together. Instead, we see the rhetoric about how those who don’t agree with their approach just don’t care.
Practically, how does this work: Do you call their legislative affairs office?
Well for the first couple years we were here, we didn’t know who our leg affairs person was. For the first couple years I was in the Senate, we didn’t even know who it was in the White House. I mean, we knew the name, but we hadn’t even interacted with them. It’s improved somewhat over the last few years, but I would just venture to guess if you’re the chief executive of a country, legitimately interested in solving problems, and you see someone from the other side of the aisle who expresses an interest in a topic you’re talking about and has ideas that are legitimate and credible, it would range from the President actually calling me, or someone like it, although he doesn’t have to, all the way to getting regular visits from staff about how we can try to work together and try to come up with solutions instead of getting messaging efforts by the Senate Democrats to bring issues to a vote on the floor so come election time, they can say Republicans are in favor of more loans or Republicans are against students finding affordable options.
You’re on record opposing the reauthorization of the Export-Import Bank. What would you say to defenders of the bank who argue if we just dismantle this thing, we are unilaterally disarming for American job creators that need this to compete with competitors abroad who benefit from similar agencies?
A better way to help American companies compete against competitors abroad is to remove all series and myriad of obstacles they face in America, whether it’s union rules in some states or massive amounts of regulation imposed upon them, one of the most expensive combined corporate tax rates on the planet.
Some people would say, Boeing (BA)—a major beneficiary of the bank—is going to be fine. They’ve got access to private capital. There are a lot of smaller manufacturers that can’t go to their local bank and get a loan to finance exports because of all these exotic risks involved. Is there a compromise you’d agree to that would limit the mandate of the bank to just work with those guys?
In terms of that limited demographic you’ve outlined, perhaps there’s something we can discuss further. But I’m generally very pessimistic about the role that government should be playing in terms of providing loan instruments to industries.
You’re working with Sen. Mike Lee from Utah right now on a tax reform proposal. You’ve said one of the things you’re looking to do with this plan is zero out some corporate welfare breaks in the current code. Can you preview some of them?
The problem of course is I’m working with another Senator on it. Since we haven’t reached a final agreement on that, I wouldn’t want to preview it here without him present. Suffice it to say what we want is a tax code that is fair and uniform for all. I think most companies would be willing to get rid of a series of exemptions that now exist for them in exchange for a lower tax rate. The one that I think could be extremely helpful for all companies, especially for smaller firms, is the ability to immediately expense the investments they make back into their company, allowing them to expand those operations and hire more people.
How closely have you studied the proposal from Ways and Means Chairman Dave Camp? In particular, the provisions that generated heat from Wall Street: imposing a “too big to fail” tax on huge financial institutions and ending the capital gains treatment of carried interest for investment managers.
We’ve looked at the proposal, certainly. It’s generated a tremendous amount of controversy and not just from Wall Street, but just about from anyone who feels like there’s something in the tax code that they find is a security blanket. That’s an example of what you asked earlier about these big comprehensive pieces. Given our current political climate and the multiple number of stakeholders that participate in these debates, the better approach would be to pick a handful of things we think we can achieve and start building forward momentum toward an overall goal of tax reform.
There’s a Tax Policy Center study of the earlier tax reform proposal Mike Lee put out that said it would add $2.4 trillion to the deficit over the next decade. How does what you’re working on with him relate to that?
There’s elements of it in there. I don’t necessarily agree with that assessment, primarily because many of the people who assess tax plans do so on a static model. They don’t look at the dynamic implications of what it would do. And yet we know that certain taxes in particular, when they’re reduced, generate an extreme amount of revenue.
You’ve mostly downplayed this internal fight in the party between the Tea Party and the Establishment. You stayed out of the Mississippi primary. A lot of the energy for new policy thinking in the party is coming from Senators who were elected against the opposition of the Establishment- yourself, Rand Paul, Mike Lee. What do you make of that?
I haven’t gotten involved in any primaries, not just Mississippi, except for one primary where we made an exception because the candidate was so extraordinary.
Joni Ernst is truly right up there with Tom Cotton and Cory Gardener in Colorado, the cream of the crop. We’ve by and large avoided them for purposes of avoiding these sorts of internal frictions that that somehow creates. As far as where the energy is coming from, I think people who’ve served for a while can have good ideas, too. But certainly when someone runs for office against difficult odds, you better know why you’re running and you better feel passionate about why you’re running. That’s certainly why I ran. I didn’t run because I thought I could win, though I certainly hoped I could. I ran because I believe the 21st century can be better than the 20th, I don’t think that’s the path we’re on now, and I believe the only way we’re going to get on that path is to come up with new ideas that apply our principles of limited government and free enterprise to 21st century challenges and opportunities.
John McCain just said the crisis on the border, from all these unaccompanied minors just showing up because they’ve got an expectation they’ll be given asylum adds urgency to the need for passing comprehensive immigration reform package.
Certainly I think we need to have immigration reform in this country, beginning with having a merit-based system of immigration, moving away from our current system that’s largely family-based. I certainly think we need to improve the way we enforce our laws. As a sovereign country, we have a right to enforce them. And we can’t ignore and must deal with the fact we have 12 million people living in this country illegally. I think the issue we have on the border now with unaccompanied minors coming, is unrelated to that. I think that issue has to do with two things: An extreme amount of poverty and violence in Honduras, El Salvador and Guatemala, and in some instances, the misconception that if they come here and they make it, as either women with children or unaccompanied minors, that our laws allow them to stay. That has served as a magnet. And that’s existing law now that says that’s not true. So I’m not sure how immigration reform would solve that issue, other than perhaps making it harder to cross the border in the first place.