MIDDLE CLASS OPPORTUNITY AGENDA U.S.

Senator Marco Rubio

Rubio: The existence of a large and vibrant American middle class goes to the very essence of Americas exceptional identity. Every country has rich people. But only a few places have achieved a vibrant and stable middle class. And in the history of the world, none has been more vibrant and more stable than the American middle class. One of the fundamental promises of America is the opportunity to make it to the middle class. CHALLENGE: WEAK JOB CREATION Rubio: The weakened American economy is not creating enough jobs of any kind, especially middle class jobs. Solution: Control Debt Rubio: Our $16 trillion debt and the lack of a plan to fix it, scares people from investing money in opening or growing a business. They are afraid of getting hit with massive tax increases in the future to pay off this debt. The leading cause of our growing future debt is the way Medicare is currently designed for the future. That is why we must reform and save Medicare as soon as possible. Protect Current Benefits For Seniors. It would be fundamentally unfair to make any benefit changes to those who are close to or are already retired. Rubios mother currently lives on Social Security and Medicare and he knows these programs are vital to those who have retired. Since the creation of Social Security and Medicare, younger workers have funded programs for the elderly. It is a compact in which workers paid for retirees with the understanding that they would also be looked after by the generation that followed. While reforms are certainly necessary, we must not allow those relying on the benefits to receive less than what they earned. Instead, we should achieve a reformed program that provides comprehensive, guaranteed coverage to the elderly, and with even more options than today's seniors have, just different on how it works.

Solution: Tax Reform Rubio: We should keep rates low on everyone. End the multiple taxation of savings. Simplify our tax code by getting rid of unjustified loopholes. Permanently Extend The 2001 And 2003 Tax Cuts: Allowing the 2001 and 2003 tax cuts to sunset would be the largest tax increase in American history, and would fundamentally harm small businesses, which are the job creators in our economy. If we do not make these tax cuts permanent, the child tax credit will fall, the marriage penalty will be re-imposed, working families and small businesses will see their income tax rates jump, capital gains and dividends will increase, and the death tax will return to a prohibitive 55 percent. Lower The Corporate Tax Rate. The U.S. has the highest corporate tax rate among OECD nations. By cutting this tax, we can spur job creation in America and build a more competitive economic environment to attract businesses from across the world. End The Multiple Taxation Of Income. The U.S. should have a tax system that is simpler, fairer, promotes economic growth, and is easier to predict. The 2001 and 2003 tax cuts should be the law of the land. The Death Tax should be permanently eliminated to protect family businesses, farms and ranches. Washington shouldnt be able to tax the same income two or three times. That means no more job-destroying double taxation of capital gains, dividends or death.

Fundamentally Reform The U.S. Tax Code. The current tax code hinders economic growth. Too many years of special interest lobbying and class warfare politics have cemented it as antifamily, anti-jobs and anti-competitive. The U.S. should have a tax system that is simpler, fairer and promotes economic growth. We should start moving toward being able to pay our taxes with a single rate on paper the size of a postcard.

Solution: Regulatory Reform Rubio: We have to weigh the benefit of any given regulation, against the impact it will have on job creation. Enact The REINS Act. Introduced in 2011 by U.S. Senator Rand Paul (R-KY) the Regulations from the Executive In Need of Scrutiny Act of 2011 (or REINS Act) would require that Congress must affirmatively approve every new major rule that may result in an annual economic impact of $100 million or more.

Solution: Expand Domestic Energy Production Rubio: We need to take full advantage of this by approving the Keystone pipeline, tearing down unnecessary regulatory barriers to tapping our own energy sources and opening more federal land to safe and responsible exploration. Enact Legislation Approving The Keystone XL Pipeline. Introduced in 2012 by U.S. Senator John Hoeven (R-ND), S.2041 would approve the Keystone XL pipeline project and provide for environmental protection and government oversight.

Solution: Stable & Predictable Monetary Policy Rubio: Sound monetary policy would also encourage middle class job creation. The arbitrary way in which interest rates and our currency are treated is yet another cause of unpredictability injected into our economy. The Federal Reserve Board should publish and follow a clear monetary rule to provide greater stability about prices and what the value of a dollar will be over time. Enact The Federal Reserve Modernization Act. Introduced in 2012 by U.S. Senator Mike Lee (RUT), this bill would reforms the nations Federal Reserve System by focusing the Feds mission on price stability, require better reporting and make the organization more transparent to Americans.

CHALLENGE: RISING COSTS OF LIVING PRIMARILY DUE TO HEALTH CARE COSTS Rubio: Nothing is taking a bigger chunk out of the budgets of our middle class households than the cost of health care. We must provide the conditions for people to get the health coverage they need in an affordable way. Solution: Flexible Savings Accounts Rubio: One way to make health care more affordable is a Flexible Savings Account that allows families to save tax free money to pay for medical bills. Enhance Flexible Savings Accounts (FSAs): To enhance FSAs, we should: (1) give FSA contributions the same tax treatment as employment-based health insurance premiums, (2) allow individuals to make withdrawals from their FSAs, tax free, to pay long-term-care insurance premiums, and (3) allow employers and individuals to make special FSA contributions for the chronically ill. These FSAs will help further reinforce the individual driven market as consumers are driven by prices, quality and out of pocket payment of services.

Solution: Freedom To Buy Insurance Across State Lines Rubio: People should be able to buy a health care plan that fits their needs and budget, from any company in America that is willing to sell it to them. Allow Individuals To Purchase Health Insurance Across State Lines: Currently individuals purchasing health insurance are limited to those policies sold in the state in which they live. Allowing companies to compete in all 50 states would give individuals more choice, more options, and lower prices. Further, if people are purchasing insurance from companies across the country, states will be forced to loosen mandates to compete. If Americans can buy their auto and life insurance across state lines, they should be able to do so with their health insurance as well.

Solution: Tax Equality For Individuals Buying Health Insurance Rubio: And they should be able to buy it with tax free money, just like their employers buy it for many of them now. Give Individuals The Same Tax Break Given To Businesses When They Buy Health Insurance. Health insurance needs to become patient-centered rather than employer centered. Individuals who purchase their own health insurance should receive the same tax treatment as those employers who provide health coverage. All individually purchased insurance and out-of-pocket expenses should be tax deductible for persons who have at least catastrophic insurance coverage. Coupled with increased portability, the new deduction will encourage the development of an individual insurance market, increase transparency and portability, and reduce costs. Between two and six million middle income Americans are estimated to take up health insurance if the deduction was in place.

Solution: Expand Community Health Centers Rubio: We should also expand the number of Community Health Centers, as well as work with hospitals to find the best way to integrate them with their emergency rooms to try and get non-life threatening walk-ins to seek treatment there. Increase The Number Of Community Health Centers. In 2011, Community Health Centers helped 20 million people in over 6,000 underserved communities, and are an invaluable part of our nations health care system. By providing more access to preventative and primary care providers, people can avoid visits to costly emergency rooms for nonemergency or routine care. These centers have a proven track record of providing care to patients that is superior, costeffective and efficient. We should focus on expanding their presence to more medically underserved areas in the country.

CHALLENGE: SKILLS SHORTAGE Rubio: We have a Skills Shortage. Too many Americans do not have the skills they need to do the new middle class jobs. The bottom line is we are trying to prepare 21st century students using a 20th century education model. Now is the time to be creative, innovative and daring in reforming the way we provide our people the skills they need to make it to the middle class.

Solution: Improved K-12 Education Rubio: Our elementary and secondary schools need state level curriculum reform and new investment in continuing teacher training. We have an opportunity through the 2013 reauthorization of the Higher Education Act to make some major improvements in teacher training. Solution: School Choice Rubio: We need to allow charter schools and other innovative schools to flourish. The key to that is empowering parents. Parents should be the ultimate decision makers on where their children go to school. But poor and working class parents often have no choice about what schools their children can attend. All our parents should be able to send their children to the school of their choice. For parents with special needs children, the freedom to choose their kids school is especially important. Support The D.C. Opportunity Scholarship Program. The D.C. Opportunity Scholarship has been a great success for low-income families in the nations capital. The program has given many students real opportunities that otherwise do not exist in the chronically ineffective and violence-plagued D.C. public school system. We must support this programs continuance and expansion. Provide Opportunity Scholarships For Students Of Chronically Failing Schools (NCLB/Title I Funds). Under No Child Left Behind, schools that fail to meet Adequate Yearly Progress for 5 years must implement corrective measures, including restructuring or firing the principal and teachers. As an additional consequence for failure, low-income students should be eligible for Opportunity Scholarships (funded with existing Title I dollars) to attend another public, charter, private or parochial school, or have access to supplemental online services of their choice.

Solution: Tax Code Reform & Incentives in Education Rubio: Our tax code should reward investment in education. Lets provide tax encouragement to help parents pay for the school of their choice. Lets create a corporate federal tax credit to a qualifying, nonprofit 501(c)(3) Education Scholarship Organization, so that students from low income families can receive a scholarship to pay for the cost of a private education of their parents choosing. Improve School Choice Through A Federal Corporate Income Tax Credit. A federal corporate income tax credit would give corporations the option of donating a portion of their federal income taxes to scholarship-granting organizations. Similar to existing programs operating in several states, including Florida, these organizations provide academic scholarships to lowincome students so they may attend a private or parochial school of their choice. Create A Universal Education Tax Deduction. To spur investments in human capital, we should convert all existing education tax deductions and credits into a single, universal education tax deduction or credit. Ideally, a dollar-for-dollar deduction or credit would be available to all taxpayers for educational expenses, including qualified tuition and related expenses incurred by students attending primary, secondary, and post-secondary institutions, and certain expenses related to home schooling and tutoring. To fund this without contributing to the national deficit, we could reduce or eliminate a number of redundant education tax provisions in current law that would generate about $7 billion annually. On the whole, this would provide tax relief to parents for school supplies, home schooling costs, sending their children to private school or for those saving for their childrens college education.

Solution: Career, Technical and Vocational Education

Rubio: Lets encourage career, technical and vocational education. Why cant more of our students graduate with a high school diploma and an industry certification in a trade or career? Lets find ways for our returning veterans to put the skills theyve developed in the Armed Forces to use in civilian job opportunities. Cut Red Tape For Veterans Pursuing Civilian Jobs. Build on the successful enactment of The Military CDL Act, which was introduced in 2012 by Rubio and U.S. Senators Olympia J. Snowe (RME), Patty Murray (D-WA) and Jim Inhofe (R-OK), and signed into law by President Obama. The new law streamlines the process by which active duty service members obtain Commercial Drivers Licenses (CDLs) by eliminating a current-law hurdle that only allows them to obtain a license in their home state of record. We should identify and eliminate similar obstacles facing our returning veterans.

Solution: Address Rising College Costs Rubio: Lets look for ways to address soaring college costs and encourage skill development that doesnt require the traditional four year college route. The groundswell of creativity and technological change in higher education will lead to dramatic reductions in the time and expense of higher education, so long as government financial policy doesnt stand in the way. We should make sure our federal aid programs dont discriminate against online course credits and help give parents and students more choices. Solution: Reform Federal Loan & Grant Programs Rubio: We need to reform our federal college grant and loan programs. Lets explore integrating the Pell Grant program with our tax system. And before they take out a student loan, lets make sure students and their parents know how long it will take them to complete their education, what their likelihood of completion is, how much they can expect to make after graduation, and how much their monthly payment on the loan is going to be. Enact The Know Before You Go Act. Students are making college decisions with shockingly little information about how likely it is they'll graduate from a particular school, how much debt they'll incur, what their future earnings are likely to be and what the likelihood is that they'll make enough money to pay down their debts after they graduate. To address this information gap, Rubio joined U.S. Senator Ron Wyden (D-OR) to promote the bipartisan Student Right to Know Before You Go Act to connect the information collected by states and schools and open up access directly to students and the general public. By allowing states to disseminate this data through a coordinated system, students would not only know exactly what to expect from the institution they are looking to attend but what to expect once they graduate.

CHALLENGE: THE FAMILY BREAKDOWN Rubio: Many young Americans do not have the skills they need to get a middle class job because they grew up in an unstable environment. Every day, some amazing parents and caretaker grandparents are overcoming all of this to give these kids the chance at a better life. But the research on this topic has consistently found that children raised in tough circumstances, struggle in comparison with children raised in a more stable family setting. Widespread societal breakdown is not something government can solve, and yet it is one that the government cannot ignore. We cannot separate the economic well-being of our people from their social well-being. Solution: Engage Mentors On Front Lines Rubio: We should start by engaging those who do important work every day in mentoring young people and leading them on the right path: their teachers, coaches, parents, priests, and pastors. Government leaders should take part in, and encourage, a national conversation about the importance of civil society institutions and leaders in creating the social infrastructure needed for success.

Solution: Engage Faith-Based Organizations Rubio: We should look at churches and faith-based organizations in the community as part of the solution. Solution: Protect Our Safety Net Programs & Reform To Enhance Stability, Opportunity & Culture Of Work Rubio: And lets protect our nations safety net programs. Not as a way of life, but as a way to help those who have failed to stand up and try again, and of course to help those who cannot help themselves. But these programs must be reformed to enhance family stability, financial opportunity and a culture of work. Solution: Acknowledge The Problem Rubio: But perhaps the most effective thing we in government can do about societal breakdown is acknowledge the impact it is having.