Two weeks before Wednesday's Republican Presidential debate, Florida Senator Marco Rubio made a bold promise about the economy and what he can do for it. In an interview with Fox News, Rubio said that by implementing his ideas, "we're going to have an economic renaissance in America." Rubio has positioned himself as the candidate for change.
The centerpiece of the Rubio campaign is building what he calls "A New American Century," where old ideas give way to new ones that lead to economic prosperity and opportunity. The 44-year-old father of four frequently talks about outdated thinking in Washington D.C. and tells the tug-on-the-heartstrings story about his blue collar parents emigrating from Cuba for a better life in America. According to Rubio, new ways of thinking are needed to keep the American Dream alive.
"His entire message is about generational change," said Corey Boles, senior analyst with Eurasia Group. "In some ways he reminds me of then-candidate Obama in his rhetorical abilities. I think you have a very interesting comparison between the two. Young, good-looking senators with young, good-looking families, and on the federal level, they've had very little achievements."
Whether it is his youth or his ideas, Rubio's message is resonating with some Republicans. He ranked third, behind Ben Carson and Donald Trump, in a New York Times/CBS News poll released Tuesday.
"He has the ability to inspire voters in a way some of the older guard do not," said Boles.
So what exactly are Rubio's new ideas and his vision for the economy? "Tax reform, regulatory reform, entitlement reform, the repealing and replacing of Obamacare, fully utilizing our energy resources, and modernizing our higher education system," Rubio declared during his recent interview with Fox News.
Should Rubio be elected America's next president and start to implement those ideas, he would, of course, have to get them through Congress -- a body he has grown so frustrated with he is not running for reelection to the Senate, whatever the outcome of the presidential election may be. But his policies are rather in line with the Republican-controlled legislatures, meaning he might just have some luck.
Rubio has set himself apart from the rest of the GOP crowd with his tax reform plan, which the Wall Street Journal likened to Reaganomics and The New York Times called "the puppies and rainbows plan."
Rubio's plan, which was drafted along with Republican Utah Senator Mike Lee, would cut the corporate tax rate to 25% and eliminate taxes on capital gains and dividends. For individuals, there were be just two tax brackets of 15% and 35%, and most deductions would be eliminated.
"It makes the tax code look a little more like a consumption tax, which most economists think would be good for growth," said Jim Pethokoukis, a columnist and blogger at the American Enterprise Institute, a center-right think tank based on Washington, D.C.
The plan would also eliminate trillions in tax revenue.
The Tax Policy Center, a joint venture of the Urban Institute and Brookings Institution that provides tax policy analysis, estimates $2.4 trillion in revenue would be lost in the first 10 years. The non-partisan Tax Foundation has an even steeper projection of $4 trillion.
"It's not at all clear that he even intends to pay for his rate reduction, so I wouldn't say his plan is corporate tax reform so much as just a giant corporate tax cut," said Harry Stein, director of the fiscal policy at the Center for American Progress Action Fund, a progressive public policy research and advocacy organization headquartered in Washington, D.C. "That's really the most important thing to keep in mind with this plan, is just how completely divorced it is from any sense of fiscal reality."
Yet the Tax Foundation found that after that first difficult decade, Rubio's tax proposal would eventually add 2.7 million jobs and increase the size of the economy by 15%. According to the organization, that is equivalent to an average of additional annual growth of 1.44% over a 10-year adjustment period. When compared to other tax proposals from GOP contenders, Rubio's tax reform plan would result in the biggest boost to GDP growth over ten years.
"He has the most dynamic pro-growth plan of any candidate," said Diana Furchtgott-Roth, director of Economics21, the Manhattan Institute's Washington, D.C.-based economic policy center.
Liberal magazine Mother Joneshas described Rubio's energy plan as "drill, drill, drill, and drill some more." That may be overstating it; however, the Florida senator has put forth an aggressive energy plan that he says aims to keep America on its path to becoming "the world's energy superpower."
Among the pillars of his energy platform is what he has called "optimizing America's resources," which includes approving the Keystone Pipeline, lifting the ban on crude exports, rewriting the Obama administration's five-year offshore drilling plan and expediting the approval of natural gas exports. He has also promised to cut back government regulation on energy companies, cut their taxes and look to the private sector for energy-related innovation.
The implementation of Rubio's plans -- and a subsequent increase in oil and natural gas drilling -- would likely lead to a drop in fossil fuel prices, which in turn would give the economy a quick boost. Big energy companies would benefit, as would their shareholders.
"We could have a lot more energy investments," said Furchtgott-Roth, pointing out that energy investment has been the major source of economic growth in the United States since 2009.
But it might not be so simple, especially if you take the environment into account.
"Policies like Rubio's would likely lead to a short-term boost in the economy. It would make fossil fuels cheaper. It would increase investment in drilling. In the long run, because of climate change, it could spell disaster for the economy," said Christopher Knittel, professor of energy and applied economics at the MIT Sloan School of Management. "He's ignoring the trade-off between the environment and fossil fuel prices."
According to Michael Busler, professor of finance at Stockton University, the economic benefits may outweigh the environmental drawbacks, at least in the immediate future.
"If we waited a year or two before we made [environmental issues] a top priority, I don't see a whole lot of damage from that. And in the meantime, for a year for two, if you get the economy rolling again, you'll end up with a snowballing effect and get even more economic growth ... and then you'll have funds available to really tackle the environmental concerns on a stronger basis," he said.
Entitlement Reform and Health Care
Under a Rubio presidency, entitlement programs like Social Security and Medicare would look quite different than they do today. But the changes may not be exorbitantly drastic, and even where they are, they will be gradual.
"Rubio, of all the candidates, seems to be the one who looks for a compromised position," said Busler.
The senator laid out his Social Security policies in an August National Review article that called for maintaining the program for current senior citizens but making adjustments for future generations, including gradually raising the retirement age and reducing the growth of benefits for upper-income seniors to make it stronger for lower-income seniors.
His plan for putting Medicare and Medicaid on "fiscally-sustainable paths" includes moving Medicaid to a per-capita block grant system, which means states decide how to best allocate program funds, and transitioning Medicare to a premium support model, essentially giving seniors money for them to put toward covering their health expenses and giving them more choice in their benefits and plans.
The result of all of this would be reduced government spending and a decreased deficit -- and, eventually, more room to invest.
"He isn't hiding his head in the stand and saying, 'These programs are fine,'" said Furchtgott-Roth. "Without the deficit, there would be a lot more funds available for productive investment... There are so many things we could be doing instead of paying interest in the national debt."
Rubio may also be able to reduce spending by overhauling health care. Like most Republicans, Rubio has pledged to repeal the Affordable Care Act, also known as Obamacare, which he has said is "fatally flawed." He plans to replace it with his own proposal that entails entitlement reform as well as adjustments to insurance regulations to lower costs and, as he says, "encourage innovation."
Part of that means putting those with pre-existing conditions into high-risk pools paid for by the government. By getting these high-risk patients out of the private system, the theory is that health care costs will go down for everyone else, especially those that have climbed under Obamacare. And that would mean more spending money among the general public.
"The Affordable Care Act has probably done more harm than good," Busler said. "Ten million Americans that had no insurance are covered, but in the meantime, there are 250 million Americans that have suffered with much higher premiums and deductibles."
Rubio has also pushed forth a refundable tax credit for Americans to purchase health insurance plans that would, according to Furchtgott-Roth, "allow people to buy the plans they want and let insurance companies offer the plans that people want to buy." It might also provide Americans with more tailored health care options..
The idea of a tax credit is nothing new -- John McCain proposed a similar idea in 2008 -- and it begs one big question with no easy answers: how to ensure affordability.
"It's a system where it's more choice given to consumers, and we recognize that we have a moral obligation to provide health care to virtually all Americans," Busler said. "They'll have to come up with some way to figure out to make sure that everybody can at least afford a basic plan."
And as always, there are two sides to every story -- and two ways to look at Rubio's big health care overhaul.
Vox senior editor focusing on health care Sarah Kliff pointed out that Rubio's plan may very well mean everyone -- workers, seniors and the poor -- end up paying more for the health coverage their currently receive until they learn to make smarter and cheaper decisions about their care. She also noted that winding down tax exclusions for employer-sponsored health insurance may have adverse effects. "Voters hate the idea of ending health insurance tax exclusion because it means the same exact health benefits package they get right now could get a whole lot more expensive," she wrote.
While Hillary Clinton is among the gig economy's enemies, Rubio may be one of its best friends. In an October speech, he said it is a "revolution happening right before our eyes," and he has big plans to reduce regulations on it and limit taxes on businesses active in the virtual realm.
Under Rubio, life might be much easier for the Ubers and Airbnbs of the world. Would it make life easier for Americans overall? Perhaps. "The benefits are different [for workers], but, of course, you might not have a job, either," Pethokoukis said. "The thing that ultimately drives up living standards is productivity, innovation."
Not everyone agrees. Jeffrey Pfeffer, a professor at Stanford University's Graduate School of Business, made the argument in a Fortunearticle that the traditional employment relationship is good for everyone:
"People are better off as employees, covered by employment protections, offered benefits, and, most importantly, having both greater income security and the benefit of being affiliated with an organization and fellow employees who can provide social support," he wrote. "Society is better off not having to shoulder the burdens offloaded by businesses that do not provide steady incomes or benefits to the people who do their work. And companies can benefit from having committed employees who can provide the customer service and innovation that leads to success."
It is less certain what Rubio's other ideas would mean for the economy, and some of his proposals come with no price tags attached.
"Rubio hasn't put a lot of meat on the bones on the spending side," said Boles. "I wouldn't single out Rubio in that regard. We are early in the process, and candidates don't want to be bound by a proposal that turns out to be unpopular."
For Rubio, his messages may prove to be less important than his money. From July 1 through September 30, Rubio raised only $5.7 million. "He's going to have to start focusing on money raising very quickly," said Boles. "His third quarter numbers weren't very strong."
For that reason, Wednesday's GOP debate could be crucial for Rubio, who will need to see an increase in fundraising to stay competitive in the crowded field of Republican hopefuls.
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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.