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Policy Paper

Florida U.S. Senate Candidate Spending Analysis – Marco Rubio

October 18, 2010

Total Net Spending Agenda: -$153.292 billion (savings)

Economy, Transportation, and Infrastructure: Unknown

A. Foreclosure Forbearance:

“Stop [f]oreclosures [f]or [t]hose [a]ffected. People adversely affected by the oil spill should not have to worry about losing their homes. Congressmen [Jeff] Miller and Adam Putnam (R-FL) have put forth a bill that would allow for the Department of Housing and Urban Development (HUD) to provide forbearance for those sustaining economic losses due to the oil spill and to evaluate what resources and programs available within the agency could provide further assistance.”

Cost: Unknown.
Note: Representatives Miller and Putnam introduced H.R. 5601 (111th Congress), the Gulf Coast Homeowners Relief Act of 2010. A cost estimate is unavailable.

B. Free Trade Agreements:

“Promote economic growth and job creation through trade. We must continue to reduce barriers to trade by adopting the free trade agreements that have already been negotiated with Colombia, Panama, South Korea and other nations around the world. We should also insist that other countries reduce their own trade barriers so that American goods can find new markets.”

Cost: Unknown.
Note: The primary impact of free trade bills is generally on federal revenues.

Depending on the terms of the agreement, there may be some outlay effects as well. For example, the Congressional Budget Office (CBO) projects that H.R. 3688, the United States-Peru Trade Promotion Agreement Implementation Act (110th Congress), “would reduce revenues by $20 million in 2008, increase revenues by $292 million over the 2008-2012 period, and reduce revenues by $423 million over the 2008-2017 period. CBO estimates that enacting H.R. 3688 also would increase direct spending by $4 million in 2008 and by $27 million over the 2008-2012 period, and reduce direct spending by $443 million over the 2008-2017 period. Further, CBO estimates that implementing the legislation would result in new discretionary spending of less than $500,000 per year, assuming the availability of appropriated funds.”

C. Troubled Asset Relief Program (TARP):

“Reallocate [t]he [b]ank [b]ailout [p]rogram [f]unding [t]o [c]ut [t]he [d]ebt. While the TARP program needs to be ended, using it to help offset the Financial Regulation Reform, which is beyond its purpose, is wrong. The funds should be returned to the Treasury and other spending cuts should be made to offset the financial regulation reform costs.”

Cost: Unknown.
Note: TARP ended October 3, 2010. Moreover, H.R. 4173 (111th Congress, became Public Law 111-203), the Wall Street Reform and Consumer Protection Act, effectively prevented the Treasury from incurring any new obligations under the program after June 25, 2010. CBO’s Budget and Economic Outlook: An Update (August 2010) projects that TARP will cost $22 billion over the next four years. NTUF assumes that these costs are the result of pending transactions initiated before June 25.

Note: NTUF assumes that the “financial regulation reform costs” to which Rubio refers are in regard to H.R. 4173. CBO reported that the conference agreement on the bill will increase direct spending by $14.9 billion over the next five years. CBO did not complete an estimate of discretionary spending in the bill. NTUF is unable to determine what cuts Rubio would make to offset these outlays.

Education, Science, and Research: $3 million

A. D.C. Opportunity Scholarship Program:

“Reinstate The D.C. Opportunity Scholarship Program. The D.C. Opportunity Scholarship has been a great success for low-income families in the nation’s 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. It is tragic that the President is phasing out the scholarship. We must overturn that action, then reauthorize and expand this important program.”

Cost: $3 million ($15 million over five years).
Source: The program is currently being funded through a continuing resolution at $12 million and is not allowed to award new scholarships; the funding is only available for existing participants. At its height of funding, in Fiscal Year 2008, the program received $15 million. This estimate is based on the cost to reauthorize the program. It is unknown how much Rubio would expand the availability of scholarships to new participants. In the past, the program received four applicants for every available scholarship. The maximum scholarship is $7,500, and the average award is roughly $5,000.

B. National Virtual Learning Platform:

“Promote [a] [n]ational [v]irtual [l]earning [p]latform. We should launch a private sector grant competition similar to ‘Race to the Top’ in order to develop a state of the art national virtual learning platform accessible to all U.S. students interested in supplementing their education. But unlike ‘Race [t]o [t]he Top,’ which is paid for with borrowed stimulus, this competition would be funded through a public-private partnership or with matching funds provided by education-minded philanthropy organizations.”

Cost: Unknown.
Note: This type of partnership could be financed through a federal grant program, or via tax credits, similar to H.R. 4258 (111th Congress), the Public Private Vocational Partnership Act, which would allow a business credit for donations for vocational educational purposes. A CBO cost estimate is not available.

C. Teachers – State Incentives for Malpractice Reform:

“Similar to our federal malpractice reform approach, the federal government should incentivize states to provide teachers the protection they deserve.”

Cost: Unknown.

Energy, Agriculture, and the Environment: $19 million

A. Agricultural Research:

“Matching [g]rants [f]or [a]griculture [r]esearch. Research to protect against foreign pests and diseases has always been a primary pursuit of agriculture across the country. … As private industry continues to research these and other diseases, the federal government should assist in matching a portion of the research. This will ensure agriculture has the revenue needed to defeat the threats and protect America’s crops.”

Cost: $19 million ($94 million over five years).
Source: Related legislation was introduced in the form of S. 3568 (111th Congress), a bill to amend the Trade Act of 1974 to create a Citrus Disease Research and Development Trust Fund to support research on diseases impacting the citrus industry, and for other purposes. A CBO cost estimate is available.

Note: This estimate does not include other research Rubio may support.

B. Pest and Disease Interdiction:

“Reform America’s [f]oreign [p]est [a]nd [d]isease [i]nterdiction [p]rocess.  … We need to ensure that inspectors have the capabilities to identify threats offshore, target inspections effectively, and are given the necessary tools, such as canine teams on the front lines, to find them.”

Cost: Unknown.
Note: A 2006 Government Accountability Office (GAO) report, “Homeland Security: Management and Coordination Problems Increase the Vulnerability of U.S. Agriculture to Foreign Pests and Disease,” noted, “[Customs and Border Protection] and [USDA’s Animal and Plant Health Inspection Service] also continue to experience difficulty in sharing information such as key policy changes and urgent inspection alerts, and CBP has allowed the number and proficiency of agriculture canine units to decline.” A number of GAO’s recommendations were implemented.

Federal Government: -$154.22 billion (savings)

A. Budget – Congress and the White House:

“We must cut the budgets of Congress and the White House by 10%.”

Cost: -$506 million (first-year savings).
Source: In April, 2010, the Congressional Research Service reported that the legislative branch’s operation budget for FY 2010 was $4.65 billion. This does not account for mandatory spending on Congressional salaries and benefits for lawmakers and staffs.
The Budget of the United States Government, Fiscal Year 2011 estimates that the Executive Office of the President spent $406 million in FY 2010 (excluding outlays from the Iraq Relief and Reconstruction Fund, and from the Presidential Transition account.
Note: This estimate assumes the cuts are made in one year.

B. Budget – Earmarks:

“We should ban earmarks as Sen. Jim DeMint proposed in Congress this year. This could save $15-20 billion annually and stop Congress from using pork barrel projects to buy votes for things like the health care bill.”

Cost: Unknown.
Note: Eliminating earmarks does not necessarily reduce spending. Earmarks are special instructions on the use of appropriated funds. If the earmarked funds are returned to the agencies’ general appropriations and are not rescinded, no savings would result.

C. Budget – Non-Defense, Non-Veterans Spending Freeze:

“We should freeze non-defense and non-veterans discretionary spending at pre-Obama levels.  In addition, we should actually enforce our goals to cut spending and reduce the deficit by making automatic cuts if politicians won’t.”

Cost: -$108.414 billion (first-year savings).
Source: According to Tables 3.1 and 8.1 of the Budget of the U.S. Government, Fiscal Year 2011, Historical Tables, FY 2008 levels for non-defense, non-veterans spending totaled $437.6 billion, and are expected to reach $546.1 billion in FY 2011.

D. Federal Workforce Reduction:

“In addition, we should reduce [the federal civilian workforce’s] size to 2008 levels. To accomplish this without disrupting critical government services, we should implement a policy of only hiring just one civilian employee for every two that leave government.”

Cost: -$3.5 billion ($17.5 billion savings over five years).
Source: Related legislation was introduced in the form of H.R. 5348 (111th Congress), the Federal Workforce Reduction Act of 2010, which would allow the government to hire only one employee for every two workers who leave. Defense, Homeland Security, and Veterans Affairs employees are exempted. The sponsor reports that this would save $35 billion over ten years.

E. Federal Workforce Salaries:

“… [W]e should freeze federal civilian workforce pay for one year and bring the pay scale back in line with market rates. “

Cost: -$2 billion (first-year savings).
Source: Related legislation was introduced in the form of H.R. 5382 (111th Congress), to provide for a temporary freeze on the pay of civilian employees of the Federal Government. One of the bill’s sponsors stated this would save $2 billion in the first year.

F. Stimulus:

“Stimulus money that has not been spent should be used for something that will actually help the economy and create jobs, or to pay down the debt.  Canceling unspent stimulus funds could save nearly $300 billion.”

Cost: -$39.8 billion ($199 billion savings over five years).
Source: As of September 17, 2010, unobligated “stimulus” spending for contracts, grants, loans, and entitlements totaled $199 billion. NTUF assumes that the bulk of these funds would otherwise be spent over the next five years. There are an additional $55 billion worth of unobligated tax benefits, an unknown portion of which may result in outlays through refundable credits.{EB595CCA-D93F-48F4-AF96-11E2D41DE73D}&xsl=Charts/FundingOverviewChartTextView.xsl

Health Care: $62 million

A. Association Health Plans:

“Encourage [s]mall [b]usinesses [a]nd [t]rade [a]ssociations [t]o [b]and [t]ogether [a]nd [f]orm [a]ssociation [h]ealth [p]lans (AHPs): AHPs are health plans created for individuals and groups who belong to one of the approximately 15,000 associations related to their jobs, careers, hobbies or interests. A significant hindrance to the widespread use of AHPs is the required compliance of all the different state regulations where members might live. By federally regulating these plans, individuals and small groups with similar interests across the country could form AHPs that would lower health care costs for their members.”

Cost: $6 million ($31 million over five years).
Source: CBO cost estimate for H.R. 525 (109th Congress), a bill to improve access and choice for entrepreneurs with small businesses with respect to medical care for their employees.  The bill was reintroduced in the 111th Congress in the form of H.R. 2607.

B. Community Health Centers:

“Increase [t]he [n]umber [o]f [c]ommunity [h]ealth [c]enters … . By providing more access to preventative and primary care providers, people can avoid visits to costly emergency rooms for nonemergency or routine care. … We should focus on expanding their presence to more medically underserved areas in the country.”

Cost: Unknown.
Note: Related legislation was introduced in the form of S. 1355 (111th Congress), to improve access to health care for individuals residing in underserved rural areas and for other purposes. A cost estimate is unavailable. The Budget of the United States Government, Fiscal Year 2011, estimates that the government will spend $2.4 billion in 2011 for health centers.

C. Health Care Pricing Transparency:

“Give [p]eople [t]he  [t]ools  [t]o  [m]ake  [c]ost-[c]onscious [d]ecisions [a]bout  [t]heir [h]ealth [c]are: Using technology to promote pricing transparency would engage more individuals in making informed health care choices. We should ensure price and quality transparency from providers and insurance companies to clearly lay out what is and is not covered. This will assist health-care consumers to better understand their coverage needs, quality of care and costs at their nearby local clinics and hospitals. For doctors and hospitals, they will be able to find the best price point to sell their products and improve quality for the patients. Ultimately, the best way to drive health care costs down is to let the forces of supply and demand set prices.”

Cost: Unknown.

D. Purchase Insurance Across State Lines:

“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.”

Cost: $56 million ($280 million over five years).
Source: CBO cost estimate for H.R. 2355, the Health Care Choice Act of 2005 (109th Congress), a bill to amend the Public Health Service Act to provide for cooperative governing of individual health insurance coverage offered in interstate commerce.  The bill was reintroduced in the 111th Congress in the form of H.R. 3217.

E. Repeal and Replace the Patient Protection and Affordable Care Act:

“As a U.S. Senator, Marco will focus on three goals: first, repeal and replace Obamacare; second, empower individuals to control their own health care choices; and third, restore control of health policy to the states.”

Cost: Unknown.
Note: CBO did not complete a comprehensive analysis of all the spending resulting from passage of the Patient Protection and Affordable Care Act (PPACA, PL 111-148). Among the known costs, including the changes in direct spending listed in a March 11, 2010 CBO letter, and the specified and certain estimated authorizations and implementation costs in a CBO letter on May 11, 2010, the law could increase spending by $88.679 billion over the FY 2011 to FY 2015 period. The bill also included unspecified spending authority that CBO has not estimated.

However, NTUF does not know what specific programs Rubio would implement in the place of PPACA. Below are some of the elements that Rubio has said he would like to see in a health care reform proposal:

1. Electronic Medical Records:

“Incentivize [t]he [u]se [o]f [e]lectronic [m]edical [r]ecords (EMRs): EMRs have many potential advantages including cost reductions, elimination of cumbersome paper records maintenance, portability, safety and quality care improvements. Unlike the Obama administration’s approach of imposing standards and regulations, the federal government should work with private and not-for-profit firms to develop an EMR platform where applications can be attempted and, if successful, implemented. This innovation-driven approach can be done while simultaneously respecting patient privacy and doctors’ professional integrity.”

Cost: Unknown.
Note: President Bush offered a proposal to increase online medical record availability in his 2007 State of the Union Address, at a cost of $169 million, but it is unknown whether Rubio would follow exactly this approach.

2. State Insurance Reform Incentives:

“Incentivize [s]tate [i]nsurance [r]eform: States throughout America have different regulatory regimes that drive up the cost of health insurance, particularly in the individual and small-group markets. Some of these regulations are justified, others only complicate the market. While allowing individuals to buy across state lines will prompt states to reform, we should also further encourage states to increase market flexibility.  Incentives can be created using federal funds in state-federal programs to help unleash the market potential in the private insurance market.”

Cost: Unknown.

3. Pre-existing Conditions:

“Adopt A Sensible Program To Cover Those With Pre-Existing Conditions: Even before Obamacare, federal law prohibited insurance companies from denying coverage to patients with pre-existing conditions. In addition, many states have programs to cover those who didn’t have employer-provided insurance and couldn’t get it from the individual insurance market because of pre-existing conditions. Instead of an expensive and unworkable new federal program, the federal government should pass legislation to allow patients to switch insurance coverage (regardless of whether they are in the employer-provided or individual insurance market) without risking pre-existing condition exclusion. For those who are temporarily unemployed and cannot be covered under Medicaid, state high-risk-pool programs can help, and the federal government should help the states with block grants.”

Cost: Unknown.
Note: The PPACA included $5 billion for high risk pools to help cover individuals with pre-existing conditions. H.R. 4038 (111th Congress), the Common Sense Health Care Reform and Affordability Act, a Republican alternative, would provide $25 billion for high-risk pools.

F. State Medical Malpractice Reform:

“Incentivize [s]tate [m]edical [m]alpractice [r]eform: Recent lottery-size awards and frivolous lawsuits have put a heavy burden on doctors, hospitals, and, through defensive medicine, on the health care system.  According to the Heritage Foundation, it is estimated that in 2007 alone, the tort system cost $252 billion. It is also estimated that ordering unnecessary tests and treatments, otherwise known as defensive medicine, may cost us anywhere from $191 billion to $239 billion a year.  Not surprisingly, states have been leading the way since the mid-1970s in enacting tort reform policies. However, overcoming those special interests dedicated to maintaining ease of lawsuits can be difficult. This is why the federal government should incentivize medical tort reforms at the state level.”

Cost: Unknown.
Note: In a 2009 letter to Senator Orrin Hatch, CBO stated “Tort reform could affect costs for health care both directly and indirectly: directly, by lowering premiums for medical liability insurance; and indirectly, by reducing the use of diagnostic tests and other health care services when providers recommend those services principally to reduce their potential exposure to lawsuits.”  The agency estimated potential savings of $10.3 billion over five years, but it is not certain whether Rubio’s incentives would yield the same savings.

G. Unapproved Drug Initiative:

“The FDA must ramp up its Unapproved Drug Initiative and protect patients from the potential harms of unproven products, especially when approved versions are readily available. Furthermore, the FDA should streamline and more-effectively regulate the drug approval process without sacrificing quality control. These actions will ensure that unapproved drugs are pulled from the market, and that pharmaceutical companies voluntarily put their products into an efficient and cost effective approval process.”

Cost: Unknown.

Homeland Security and Law Enforcement: $30 million

A. Financial Crime Prosecutions:

“Increase [p]rosecutions [o]n [t]hose [w]ho [p]rey [o]n [s]eniors [t]hrough [f]raud [a]nd [f]inancial [c]rimes. Seniors often have accumulated resources such as property, insurance and pension plans, savings, stocks and bonds, and other assets that are not always closely monitored. … We must increase prosecutions for those who commit fraud against seniors and help raise awareness of this important issue.”

Cost: $30 million ($150 million over five years).
Source: Related legislation has been introduced in the form of H.R. 5884 and S. 3494 (111th Congress), the Senior Financial Empowerment Act of 2010, to prevent mail, telemarketing, and Internet fraud targeting seniors in the United States, to promote efforts to increase public awareness of the enormous impact that mail, telemarketing, and Internet fraud have on seniors, to educate the public, seniors, their families, and their caregivers about how to identify and combat fraudulent activity, and for other purposes. The text authorizes $30 million per year.
Note: No legislation in the 111th Congress deals specifically with prosecution of fraud against seniors. H.R. 1748, the Fight Fraud Act of 2009 would authorize funding to investigate financial fraud across all demographic groups. CBO estimates the bill would cost $805 million over five years.≅=111

B. Identity Theft:

“We must continue raising awareness and ensure the Department of Justice establishes a coordinated plan and makes combating identity theft a priority.”

Cost: Unknown.

National Defense and International Relations: Unknown

A. National Defense:

“… [W]e must make it crystal clear that we will defend our nation, our interests and our allies against any group, nation or power. … To do so will require modernizing our Cold War weapons systems, building a robust missile defense system and investing in our intelligence services.”

Cost: Unknown.

B. U.S. Embassy in Jerusalem:

“The U.S. should work toward the goal of moving our Embassy there [to Jerusalem].”

Cost: Unknown.

C. West Bank:

“We should actively support pragmatic efforts to build Palestinian institutions in the West Bank, so that Palestinian self-rule becomes possible – without imposing unacceptable risks for Israel’s security.”

Cost: Unknown.
Note: In FY 2010, the United States provided $502.9 million in assistance to the Palestinians.

Veterans: $814 million

A. Department of Defense and Veterans Administration (VA) Coordination:

“The transition from Department of Defense to the VA has been marred by lost records, incompatible systems and lengthy delays. We need to develop and implement a process to ensure a seamless transition that includes secure, efficient electronic transfers of medical and service records. In addition, we should make it a priority to inform new veterans of their benefits to ensure they are aware of all the benefits they have earned.”

Cost: Unknown.
Note: Current efforts in this area are underway; it is unknown what additional steps Rubio would implement. According to Veterans Affairs Secretary Eric K. Shinseki, more than $110 million was invested in tele-health technology in 2010, which includes technology for the virtual lifetime electronic records system. VA expects to spend $163 million on these programs next year linking the Department of Defense’s and VA’s transition projects.

B. Education Benefits:

“The original and post-9/11 G.I. Bills gave many veterans the opportunity to study and pursue their education. However, we must continue seeking ways to simplify, standardize and the [sic] streamline aspects of the program to improve its effectiveness so that no eligible veteran seeking additional education is denied.”

Cost: Unknown.
Note: Related legislation was introduced in the form of H.R. 1902 (111th Congress), to provide veterans with individualized notice about available benefits, to streamline application processes for the benefits, and for other purposes. This bill is not specific to education benefits, and a cost estimate is unavailable.

C. Mobile Health Care Clinics:

“Increase [v]eterans [m]obile [h]ealthcare [c]linics. In 2008, the VA announced four mobile health clinics to bring care to veterans in predominately rural counties. In 2009, Haley Veterans Medical Center in Tampa received their first clinic and began conducting primary care, general evaluations, community outreach and support for homeless veterans. We need to consider adding to the fleet and continue to provide support to those veterans far away from the medical center.”

Cost: Unknown.
Note: The VA currently operates Rural Mobile Health Care Clinics as a pilot program in four areas. In 2007, CBO estimated this pilot program would cost $22 million over five years. It is unclear how much additional funding Rubio would provide to expand this program.

D. Traumatic Brain Injuries:

“The VA’s doctors need to have the authority to collaborate with the small segment of the civilian medical profession that works on traumatic brain injuries.”

Cost: Unknown.

E. Veterans Administration (VA) Claims Backlog:

“Unresolved veterans compensation, pension and other matters are quickly approaching a backlog of 1 million claims. We must ensure the VA has adequate leadership and the resources needed to reduce this backlog in a timely manner.”

Cost: $796 million ($3.98 billion over five years).
Source: Related legislation has been introduced in the form of H.R. 3504 (111th Congress), the VA Case Backlog Alleviation and Economic Stimulus Act of 2009, to provide for a 2 percent rescission of unobligated funds previously appropriated under the American Recovery and Reinvestment Act of 2009 to be used by the Secretary of Veterans Affairs to hire claims processors. The dollar figure was calculated from 2 percent of the repeal of stimulus funds as listed under the “Federal Government” section.

F. Veterans Benefits Outreach and Enrollment:

“We need to continue developing our support programs for these critically wounded warriors and increase enrollment and outreach efforts to them and to veterans of previous wars. … [W]e must continue to raise awareness and enlist the public’s aid in meeting the needs of severely injured servicemen and women as they transition from active duty to civilian life.”

Cost: $18 million ($73 million over four years).
Source: Related legislation has been introduced in the form of H.R. 32 (111th Congress), the Veterans Outreach Improvement Act, which was incorporated into the reported version of H.R. 3949. A CBO estimate is available.