Marco Rubio is telling voters across the U.S. he will prioritize reducing the national debt if elected president, but his proposals are likelier to increase the budget deficit than reduce it, say conservative and mainstream policy experts.
The Republican—one of only four candidates to break double digits in the latest Bloomberg Politics/Des Moines Register Iowa Poll—has called for a constitutional amendment to require balanced federal budgets, a bold proposal aimed at picking off conservative voters from Ted Cruz and debt-focused moderate voters from Chris Christie and Jeb Bush. “I will end Washington’s addiction to wasteful spending,” the Florida senator said in an economic policy speech on Monday, warning the American dream is “dying because Congress has spent us into unprecedented debt.”
His plan would also raise the eligibility age for Social Security to keep up with life expectancy; slow the growth of benefits for high-income seniors; and convert Medicare after 10 years from an open-ended benefit program into a voucher system with a maximum payout per senior. None of these changes would affect people “in or near retirement” today, he's promised. He's introduced a tax plan that would lower federal revenue by $414 billion per year, according to the conservative Tax Foundation (that's before accounting for economic effects). And he has proposed increasing military spending, introducing a budget amendment in 2015 that boosts Pentagon funding by tens of billions of dollars.
“It would be difficult, if not impossible, for Rubio's plan to avoid running large deficits,” said Roberton Williams, a fellow at the nonpartisan Tax Policy Center.
The lost revenue, Williams said, would have to be financed by more borrowing, at least in the short term. (Under the dynamic scoring assumption, future economic growth helps cover long-term costs.) “That leaves spending cuts to balance the budget. Given his plans to increase military spending, it would be hard to find enough cuts.”
Rubio campaign spokesman Alex Conant didn't return requests to explain how the candidate's proposals would lower the debt or to offer more detail on the long-term entitlement changes he wants to make.
Douglas Holtz-Eakin, a conservative economist and former CBO director, said it would be “awfully hard” to make Rubio's proposed economic policies revenue-neutral, let alone lower the deficit. “If you take some revenue out” by lowing taxes “and put more military spending in, and if you don't touch Social Security for current retirees, it gets hard fast,” said Holtz-Eakin, who advised John McCain's 2008 campaign. “This is no longer a long-term problem.”
Lowering the deficit would also require cutting Medicare benefits for people in or near retirement, Holtz-Eakin argued. “The problem is me. I'm 57 now; I'm the tail end of the Baby Boom generation,” he said. “You have to address as much of the Baby Boomers as you can. Arithmetically, those are the bodies.”
Rubio, praised on the right as a serious policy wonk, is far from alone in banking on tax cuts to spur economic growth that will cover revenue loss—a controversial assumption embraced by many conservatives. Jeb Bush released a tax plan assuming 4 percent growth; Republican front-runner Donald Trump went even further, to 6 percent. The Democratic presidential race has also heated up in recent days as front-runner Hillary Clinton pressures leading rival Bernie Sanders to explain how he'd pay for his single-payer health care proposal.
James Pethokoukis, a policy analyst and blogger for the conservative think tank American Enterprise Institute, said the math problem is party-wide among Republican politicians. None of them want to take the political risk of proposing Social Security or Medicare cuts for the older Americans who constitute a large chunk of the GOP base. Candidates such as Rubio and Christie, who've placed a special emphasis on debt reduction on the campaign trail, may be setting themselves up to disappoint.
“I think the failure of the Republican Party to publicly grapple with the budget truths ... plays a big role in creating disappointed Republican voters. Expectations are misaligned with the math,” Pethokoukis said.
“Of course, if you propose truly radical entitlement reform like pre-funding Medicare and Social Security, it's a different ballgame,” he said. “But no one is doing that.”
The main pile of money Rubio has put on the table for near-term cuts is nondefense discretionary spending, which totals nearly $600 billion, about 16 percent of the annual budget. That part of the budget includes funding for food stamps, education, and assistance for health care and housing for lower-income Americans.
“Even if you completely eliminated all nondefense discretionary spending, $600 billion, you are still in the red overall” under Rubio's plan, said Pethokoukis. “And now you are taking away some $400 billion in revenue. And you are not beginning entitlement reform for current or near retirees.”
William Gale, a fiscal policy expert at the nonpartisan Brookings Institution, said Rubio could conceivably make the arithmetic work with adjustments to tax and defense spending plans, but the cuts he'd need to make to domestic spending would be “brutal for low-income households and not politically realistic, I would guess.”