Rubio: Offset Tax Cuts By Reducing Social Security, Medicare Benefits

Photo by Gage Skidmore

Tax reform is only one piece of the overall puzzle needed to revitalize the American economy, Sen. Marco Rubio (R-Fla.) told a group of Washington, D.C., lobbyists and policy analysts this morning at a Politico Playbook Interview sponsored by the Financial Services Roundtable. The other part? Reduce the deficit and offset the cost of the reform, which the Congressional Budget Office estimates at $1.3 trillion.

"The only way you are going to deal with the debt is you have to do two things. ... You have got to generate economic growth because growth generates revenue. But you also have to bring spending under control. And not discretionary spending. That isn’t the driver of our debt," Rubio said.

"The driver of our debt is the structure of Social Security and Medicare for future beneficiaries. We still have time, not just to save those programs, but to responsibly structure them in a way that doesn’t impact current retirees or people about to retire. But it would probably impact it for me and people younger than, in ways that quite frankly you wouldn’t really notice and you wouldn’t really object to because it’s reasonable."

If lawmakers can act strategically sooner rather than later to come up with some combination of reforms to reduce benefits and raise retirement age, the pain of change and reduced benefits will be greatly mitigated, said the lawmaker who ran for president in 2016 and is once again sounding presidential.

“We don’t need to reduce benefits on current retirees or even near-term retirees, but we can make changes for future generations such as mine, and do so in a way that people can prepare for, so the changes will barely be felt,” Rubio said.

As much as 23 percent of Social Security benefits and 14 percent of Medicaid benefits could disappear by 2034 unless Congress acts, according to a the most recent report from trustees. Without a political fix, future retirees could experience a 23 percent reduction in benefits or a 20 percent increase in payroll taxes to fund the shortfalls, the trustee analysis found.

“Tax reform is the economic component of this equation,” said Rubio, who expressed doubts that there will be a government shutdown. “When more people are working, there are more taxpayers and more revenue, but that alone won’t be enough. You are still going to have a debt problem in the absence of spending cuts.”

Pundits are already envisioning Democrats’ ad campaigns in the coming years characterizing Republicans as the party that gutted health care and cut taxes for the wealthy and corporations.