On Tuesday, we learned Sen. Marco Rubio is bad with money.
When he entered public life in 2000, he had little to his name and a mountain of debt. “[H]e reported a net worth of zero, about $150,000 in student loan debt, and $30,000 in what he called assorted credit and retail debt,” notes the New York Times in a much-read story on his financial troubles. Despite this, however, he’s been profligate with money. In 2003, after a brief period of “belt-tightening,” he purchased his mother-in-law’s home for $175,000 with no money down. Two years later, after earning a six-figure salary with a high-profile law firm, he purchased a $135,000 home in Tallahassee, Florida, again, with no money down. And then, by the end of 2005, “the Rubios completed the purchase of a new home, twice the size of their previous one, for $550,000.”
The end result of all of this was even greater debt and tremendous new financial liabilities. Rubio left the Florida House of Representatives in 2008 with a net worth of $8,351 and $115,000 in student debt. In 2013, he reported two mortgages and at least $450,000 in liabilities. This year, he sold his home in Tallahassee, losing $18,000 in the deal. Even as Rubio spent far more than he earned, he railed against federal spending. Here’s the Times:
“We have a country,” he said in 2013, “that borrows too much money.” In 2010, he diagnosed the problem this way: “If you allow politicians to spend money, they’ll do it.”
The easy conclusion is that this hurts Rubio as a Republican presidential candidate. It’s not hard to hear the hits coming from his GOP rivals: How can you denounce deficits and tout “responsibility” when you can’t control your own finances?
Politically, this is a bad move. An attack on Rubio’s personal spending is as likely to help the Florida senator as hurt him. Rubio is a former working-class kid, and his money problems are as much a chance to connect—he understands how hard it is to be broke, or navigate boom and bust times—as they are a burden.
The more substantive problem is this only holds if you treat government like a household, where debt is a problem and spending should match income. But it isn’t. Rhetoric notwithstanding, the needs of an economy are fundamentally different than those of a family, and the skills it takes to balance a budget don’t translate to the skills it takes to manage a country. If that were true, then Abraham Lincoln would have been our worst president and Calvin Coolidge our best.
If there is a reason to doubt Rubio, it’s because of his overall judgment, not his money problems. To pay for family trips and projects at home, he used a Republican Party credit card. His wife was the treasurer of his political action committee—a huge conflict of interest—and he funded his campaigns with personal credit cards, a huge blunder, if nothing else. It’s that carelessness—and that penchant for making poor choices and taking on bad risks—that makes Rubio a risky choice for Republican voters, to say nothing of the broader public.
None of this makes Rubio a hypocrite. He can spend too much money in his personal life and denounce government spending because the two aren’t related. And even if they were, the harm isn’t the same. Rubio’s bad habits hurt him and his family. Big government, he would argue, hurts everyone.
Right now, according to the Times, Rubio is doing well:
The Rubios have taken steps to stabilize their finances in recent years, aided primarily by proceeds from his two books. Since 2012, they have started college savings accounts for his four children, put away at least $150,000, given $60,000 to charity, and refinanced the mortgage on their primary home to lower the monthly payments.
Part of this is better behavior and a larger, more steady income. But part of it is Rubio’s billionaire benefactor, Norman Braman, who has financed his campaigns and subsidized his finances. And although no one will confirm Braman’s total assistance to the Rubio family, it appears to be in the hundreds of thousands of dollars. Here’s the Times with more:
[W]hen Mr. Rubio left state government, determined to shore up his finances before running for the United States Senate, he landed a teaching job at Florida International University, agreeing to raise much of his salary through private donations.
Mr. Braman gave $100,000, according to records he shared with the New York Times. Dario Moreno, who oversaw the university center where Mr. Rubio worked and who taught classes with him, confirmed that Mr. Rubio had raised the money from Mr. Braman. […]
Four months after Mr. Rubio left the payroll, Mr. Braman hired Mr. Rubio’s wife, Jeanette, who had little professional experience in philanthropy, and her company, JDR Events, to advise the Braman foundation. Mr. Braman declined to discuss her compensation.
Rubio, in other words, had a safety net. And it was powerful. It caught him and his wife when they fell under the weight of their debt, and it gave them time and space to recover. With Braman’s patronage, Rubio could survive his mistakes and make his way to near the top of national politics.
What’s been good for him, it seems, isn’t so great for the American people. Rubio speaks about poverty at almost every opportunity, often well. But his policies would shred the safety net we have for ordinary Americans. In particular—after repealing the Affordable Care Act—Rubio wants to collapse our major anti-poverty programs—unemployment assistance, the Supplemental Nutrition Assistance Program, Medicaid, and housing assistance—into a single block grant to states, which could use them to “innovate.”
The problem, notes Sharon Parrott for the Center on Budget and Policy Priorities, is that block grants undermine key parts of the safety net. “[B]lock-granting,” she writes, “sacrifices the timely, effective, and targeted counter-cyclical response that these programs provide.” In addition, the Rubio proposal would “wipe away important protections in current law that ensure, for example, that all poor children have access to nutrition assistance and health coverage.” There’s also the fact that block grants—as a single pool of funding—are easier to cut than individual programs. “Funding for most major block grants focused on low-income households has eroded in inflation-adjusted terms, often by large amounts.”
Contrast this with Rubio’s other domestic priority: tax cuts. Under the plan he authored with Utah Sen. Mike Lee, Rubio would end taxes on capital gains and dividends, an extraordinary gift to the wealthiest Americans that would make their largest income source tax-free. In addition, he would zero out the estate tax, so that they could pass vast sums to their children and heirs, again tax-free.
Neither Rubio nor Lee say how they would pay for these giveaways, but their plan gives a clue. “Lee-Rubio would let a key provision of the current Child Tax Credit expire after 2017, causing millions of low-income working families to lose all or part of their credit,” says the CBPP. And although Rubio and Lee include a new child tax credit, it would exclude most low-income working families.
If there’s hypocrisy in Rubio’s story, it’s right here. For 15 years, he made mistakes with his money. But it never sank him. He got a second chance. And he wants to use that second chance to build a country where Americans without billionaires in their back pockets have fewer shots at bouncing back from their mistakes.