Sen. Rubio on fighting ISIS, 2016 race

This is a rush transcript from "Your World," March 9, 2015. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: And you're going to have to wait another month or so to see the new "Avengers" movie, when the good guys join forces again to fight evil, but you really won't have to wait at all for a very different "Avengers" movie, because the bad guys already are joining forces to create an even bigger evil. Only, this one, this one ain't a movie.

Welcome, everybody. I'm Neil Cavuto.

And talk about double trouble, Boko Haram hooking up with ISIS, continuing a migration of maniacs to a modern-day version of the terror team from hell, but a team that Florida Senator Marco Rubio is determined to stop, even if, as he told me moments ago in this exclusive chat, the president doesn't appear to be.


SEN. MARCO RUBIO, R-FLA.: First of all, we have to understand ISIS is operating in three concentric circles.

Its core is still in Iraq and in Syria and a little bit in Lebanon. Then it has an outer ring that is trying to develop. And that is in places like Libya, as you have seen with North Africa, but also in Afghanistan. That's not been discussed enough.

And what they're looking there is to absorb existing groups into their fold, basically. They call them provinces, but basically outlying groups that pledge allegiance to them. The third ring, by the way, is in the West, both in Europe and ultimately in the United States in trying to inspire lone-wolf homegrown violent extremist-type attacks.

But this is part of that second ring, where they're looking to absorb existing groups. In Afghanistan, they're trying to convince groups to break from the Taliban and Al Qaeda and moves towards them, and in North Africa, groups like Boko Haram that they absorb.

CAVUTO: So, what would you do? What would you do? If you were president, what would you do?

RUBIO: Well, you have to -- I think the main thing you have to do is target the inner core, because, without the inner core, that second ring is irrelevant. And you can break that second ring apart.

And the inner core still is in Syria and in Iraq. And, as I have argued, the United States should use it position of leadership to pull together a Sunni army, a Sunni ground force made up of Egyptians and Jordanians and Saudis and other kingdoms to go in on the ground and confront Sunni terrorists.

CAVUTO: Well, wouldn't that be some of our boots on the ground too?

RUBIO: Well, we would probably need some special operations forces for logistical support and targeting. And we would lead -- need significant U.S. air support for such an effort.

But I think it's critical that there be Sunni fighters on the ground confronting a Sunni extremist movement. If we fail to do that, we have basically outsourced the operation to Shia militias under the complete control of the Iranian Revolutionary Guard and, in essence, we're creating a pattern where even after ISIS -- after ISIS is defeated, Iraq is going to become a sectarian battleground for decades to come, creating future ISIS problems or ISIS-type problems, but also creating a node of complete influence for the Iranian regime.

CAVUTO: Then how do you know who our friends are?

RUBIO: On the Sunni side?

CAVUTO: On any side?

RUBIO: Well, on the Sunni side, it goes back to having that Sunni army on the ground. And that's why it's so critical that it be a Sunni-oriented group, so that these Sunni communities feel protected. They don't feel like this is a conquering Shia army or a conquering Western army, because that creates long-term problems.

There will be a U.S. element to it. And I'm not arguing to you that the future for Iraq is going to be neat. But I can tell you that in the absence of some sort of an exclusive government in Iraq that has spaces for the Kurds, the Sunnis the Shia, you may see that country break apart or you may see it under the complete dominance of a Shia puppet state for Iran.

CAVUTO: You know, you're a young man, about as young as Barack Obama was when he was considering the White House.

You're a senator. Did he give a senator running for president a bad name? In other words, would -- if you run, all your likely Republican opponents, most are governors or former governors.

RUBIO: Right.

CAVUTO: And that, they say, gives them an edge.

What do you say?

RUBIO: Well, we have very talented governors that are thinking about running for president. And, as a Republican, I'm glad that our party has such a deep bench of individuals potentially prepared to lead our country.

The Democrats can't even come up with one good candidate. And we have six or seven. That's a good thing. I would say that my experience has been quite different than President Obama's. He was a backbencher in the state legislature in Illinois. I was in leadership all nine years that I served there, including two as speaker of the House.

He basically served two uneventful years in the U.S. Senate before starting to run for president for the better part of four years. Not only I have served in the Senate and achieved some things, but have been very engaged in both foreign policy issues and intelligence issues, given my role on those committees.

And I think foreign policy is going to have a big part of our debate in 2016 for...


CAVUTO: And that's an edge you feel a senator typically has more than governor?

RUBIO: So, I -- well, I think a governor certainly isn't dealing with foreign policy in state capital.

CAVUTO: Right.

RUBIO: It's an issue they can read a lot about and meet with people and become more informed about.

But I would also point out that the foreign policy challenges to our country are both significant and complicated, much more so than during the Cold War, for example. And beyond that, I would argue it's the primary obligation of the federal government. Education should be an issue we discuss, but that's largely a state and local function.

The economy is an issue we discuss, but the federal government shouldn't run the economy. Its job is to create the conditions for economic growth and prosperity. The one thing the federal government and only the federal government can do is provide for our national security, and I do think that needs to become a bigger part of our debate.

And as someone who is engaged in that debate on a daily basis, I do think it's advantageous. CAVUTO: Do you think, though, that others, namely Scott Walker and Jeb Bush, more to the point, are sucking all the oxygen out of the room, even in your state of Florida, that Jeb Bush gets the attention, Scott Walker gets the attention, you don't?


Well, if I run for president, it's going to be a long campaign. There actually is going to be a campaign. People are going to go out and they're going to interact with voters. And like anything else, you are going to try to persuade people. So given both the realities of modern media and the nature of the campaign I believe we're able to put together, we will get our fair share of attention. We will get our chance if I run for president to convince the American people and Republicans initially that I should be their nominee.

I have little doubt that we can put together a credible campaign to do that. And if, in fact, I run for president, I'm looking forward to that campaign. These elections aren't decided at the beginning. They're decided at the end and they're decided after a campaign where voters are going to get to see different candidates talk about different issues and weigh them along those lines, as opposed simply the first impression which you get now from polling that largely is a reflection of name recognition.

CAVUTO: And a snapshot.

The argument seems to be -- I'm a numbers guy here at FOX, Senator, so if you will indulge my nerdiness -- that you need $35 million, $40 million, $50 million before a campaign gets going to get going. In other words, before Iowa, the caucuses, you would need at least that much.

RUBIO: Right.

CAVUTO: Are you confident you would?

RUBIO: Well, I won't run for president if I don't think I can. At the end of the day, no matter how good your ideas are...


CAVUTO: ... having that much money?

RUBIO: Well, it's something in that range. I don't know the exact number, but you need to have -- there's a threshold that you must meet to be a credible candidate, because it does cost money to communicate your message to voters.

I feel confident that we have -- that we are going to meet that number and exceed it. I do. And I wouldn't run for president if I didn't think we could. And, so, for me, that decision has been made.

I mean, to me, the decision that I would love to make is, where is the best place for me to serve this country that I owe so much to? Is it to continue in the Senate or is it to run for president? And if I decide that it's to run for president, I'm confident we can put together the kind of credible campaign that will allow us to win.

CAVUTO: With almost any one of those other guys, save Jeb Bush, you would be a perfect running mate.

RUBIO: Well, I don't think you can run to be a running mate. And if I run for president, it's because I want to serve as president. And that would be my goal, obviously.

CAVUTO: But the party has failed miserably at attracting Hispanic voters, Latino voters, more to the point. And here you are.

How do you reach out to a party that has failed miserably at addressing this core constituency?

RUBIO: Well, I wouldn't say that the Republican Party has failed to attract Hispanic voters because they're Hispanic. We have failed to attract them because they are predominantly working-class voters who feel like the Republican Party doesn't care about people like them or understand people like them.

It's unfair. It's not true. But that's the perception that has been driven by the left.

CAVUTO: Well, do you think that the party's immigration stand, where, like, we will deport you all back, hurts?

RUBIO: Well, look, it's a factor. I wouldn't say it's a determinative factor. It's a factor.

But, ultimately, that goes back to our national security issues. Our immigration policies in this country should not be built on politics. They should be built on what is good for America. But I do think that the bigger issue is that you have millions of Americans who are struggling and have been convinced by both mass media and the Democrats on the left that Republican Party doesn't understand or care about people like them, that we're only here to fight on behalf of the people who are trying to make it.

And we need to do a better job of explaining not only is that not true, but the direct opposite is true. Big government helps the politically connected. Big government helps the people who can afford to hire accountants to do their taxes or lobbyists or find loopholes.

It's the people who are trying to make it, the person whose job will never be created because of big regulations, the entrepreneur trying to start a business out of the spare bedroom of their home, they're the ones that deal with big government.

CAVUTO: But, nevertheless, when you were in New Hampshire recently, Senator, I think you were asked a question about, would you be open to deportation for I think the questioner said the 12 million or 14 million illegals who were here? And you stood your ground and said, no, that's simply not realistic. I'm paraphrasing.

RUBIO: But no one is calling for that, for the most part. I don't know a single...

CAVUTO: Well, that particular question -- but I'm only saying, among the real conservatives...

RUBIO: Right.

CAVUTO: ... do you think your more pragmatic stance on this illegal immigration issue hurts you?

RUBIO: I don't.

Look, I think there are some people that are extremely frustrated by -- they feel they have been lied to about immigration over the last two decades and are frustrated by it.

But I think the vast majority of people in America and in the conservative movement understand that we have to address the mistakes that were made in the past that have left us with 12 million people illegally here. But they're not prepared to have that conversation until first they see -- not that they're told, that they see that immigration laws are going to be enforced.

And if they believe and if they see that future illegal immigration is going to be under control, then I think they're willing to have a very serious conversation about what do you do with the people that are here illegally for a long time that have not otherwise violated our laws and how do we reform our legal immigration system, so that it's merit-based, not simply family-based?

But I have learned over the last year that you are not going to be able to have that conversation until you first show people, not tell people, show people, that illegal immigration in the future will be under control.


CAVUTO: All right, we're not done with the Florida senator.

Just because ISIS is getting taxing doesn't mean our taxing have to be -- in a moment, Marco Rubio's plans to simplify them that has got a lot more Republicans paying attention to him, but add to that whether, when it comes to the border, Senator Rubio is right.


CAVUTO: If you simplify it, they will pay.

Continuing with my chat now with Marco Rubio. If you really simply identify taxes, maybe others will pay attention as well.


CAVUTO: Let's talk a little bit about what helps all Americans, regardless of their ethnicity.

You have a plan to simplify and cut taxes rather dramatically. You would have two tax rates, as I understand, Senator, 15 percent for couples up to just under $150,000, $150,000 and over, 35 percent. You also get rid of capital gains taxes, dividend-related taxes.

But is it almost too simple for words, and does it actually work against you? One prominent conservative who is a fan of yours said, how would people react to hearing that someone like Mitt Romney doesn't have to pay capital gains taxes? That's from James Pethokoukis of the American Enterprise Institute.

What do you say to that?

RUBIO: Well, my argument is this. Tax is not -- this tax plan is not designed to benefit any single individual. It's designed to benefit the American economy by doing two things, being pro-growth and being pro- family.

On the pro-growth side, we want to make America the best place in the world for businesses to take their profits and reinvest it in creating new jobs, new factories, buying new machines, et cetera. And the way you do that is you tell them, the more money you invest in America, the less you will owe on taxes. That's why we eliminate the capital gains tax. That's why we eliminate taxes on dividends. That's why we lower the corporate tax to a globally competitive 25 percent.

That's why we create parity between small businesses operated as S corporations and big businesses often operated as C corporations. You do these things, you're going to have rapid economic growth that's going to create millions of better-paying jobs for all Americans.

On the personal side, we simplify the tax rate to two simple rates, 35 and 15 percent. Eighty percent of Americans will be paying on the 15 percent rate. That's a tax cut for them. We also increase the per-child tax credit applicable to both your income taxes and also your payroll taxes to support families with the cost of raising their children. That will benefit millions of middle-class hardworking Americans.

You do these two things, something that empowers individuals and families, combined with a pro-growth tax rate, and you are going to see dramatic growth in our economy, dramatic growth in wages, dramatic growth in productivity from an economic perspective.

CAVUTO: You know what you're going to hear from your critics? Oh, he's a friend of the super rich. Someone like Mitt Romney, who gets all his income from capital gains, et cetera, walks off scot-free.

RUBIO: Well, I always laugh, because the majority of people that accuse me of that happen to be millionaires and they're lecturing me, the son of a bartender and a maid, about the plight of the middle class.


RUBIO: At the end of the day, what hardworking Americans need is better- paying jobs. And the only way you're going to create better-paying jobs is by making America the best place in world to create them.

And our tax code, as it stands today, is an impediment to that. For example, we have $2 trillion of American cash sitting abroad that won't come back because they're not willing to pay taxes twice on that money. They already paid once in the other country. If we can bring that money back, that money is not -- someone is not going to eat these dollar bills.

They are going to invest them in opening a bigger factory, in hiring more workers.


CAVUTO: Not necessarily. They could just pocket it. Right?

RUBIO: Well, how -- either way, you have to consume it one way or the other.

CAVUTO: Right.

RUBIO: If your take the money and let's say you do pocket it, you're going to spend it into the economy. That too is job creation, but most companies are going to reinvest it back into their businesses, expanding operations, because we're not -- we're going to allow them to immediately expense that.

CAVUTO: So, you don't think it would make deficits worse in the short- term, before you get this, the bang for the buck?


RUBIO: First of all, the only way you're going to deal the debt -- with the debt in America is the combination of rapid economic growth and fiscal discipline. This is the first part of it, the rapid economic growth part of it. We still need fiscal discipline.

CAVUTO: Still need entitlement reform.

RUBIO: We still need entitlement reform.

CAVUTO: Right.

RUBIO: You have to do both.

CAVUTO: We're on again another debt limit brink again, on the 16th, I guess.

RUBIO: So, you -- we can't just cut our way out of this situation.

CAVUTO: Or just raise the debt limit.

RUBIO: Right.

Well, and that is going to happen, unless we have a plan in place to bring the long-term debt under control.

CAVUTO: But, if you were president, regardless of these issues you raise, would you, short of any of the things that you outlined you want to work on, raise the debt limit if we ever came to a brink?

RUBIO: Well, I don't want us to have a debt default, but I would use the presidential -- the leadership of the presidency to move forward on a debate on into entitlement reform, in combination with economic growth and regulatory reform.

And the argument I would make is, we cannot fulfill our full potential if we don't have a competitive tax code that makes America the best place in the world to invest and innovate, if we remove regulations that make us uncompetitive in the global marketplace, and if we don't bring our national debt under control.

And on that third point, we cannot bring our long-term debt under control if we don't reform and save Medicare and Social Security. The ideas are there to do that. It just takes the political will to do it.

CAVUTO: Would you means-test Social Security?

RUBIO: I think that could be a component of it, especially in terms of how we index the benefit.

CAVUTO: But for younger people like yourself, you're saying it's inevitable that we would have to go down that direction?


RUBIO: My Medicare is -- I'm 44 years old. My Medicare is going to look different than my mother's. There's no way around it. The choice that we have is, what -- are we going to deal with it now in a more reasonable and rational way, or are we going to wait until we have a debt crisis and then scramble to deal with it?

If we deal with...


CAVUTO: ... now?

RUBIO: Well, if we deal with it now, we are going to able to -- my mother is on Medicare. I don't want her Medicare to change. It's too late in her life for that to happen.

CAVUTO: Does she tell you that? Son, don't go too strong on this?

RUBIO: She doesn't tell me that, but I have always said that. And I'm from Florida. We have a lot of Medicare recipients.

CAVUTO: Right.

RUBIO: And I have always told people, I think the way to reform Medicare is to leave it the way it is for people that are retired now or are about retire. It's my generation...

CAVUTO: When you say about to retire, what is the level?


RUBIO: Fifty-five. You can say 55 years of age and older. But for people in my generation...

CAVUTO: I'm just checking my age here.

RUBIO: Yes, you're...

CAVUTO: Oh, go ahead. Go ahead.

RUBIO: But people in my generation, our Medicare is going to look different. And our Social Security is going to look different. It will still be the best thing in the world. It will just work differently and it will actually be sustainable.

And I think my generation is prepared to make that choice, not just to hold our parents harmless, but to save these programs and ultimately balance our budgets.

CAVUTO: Senator, thank you very, very much.

RUBIO: Thanks for having me.


CAVUTO: We have seen a lot of polls on that. Marco Rubio polls almost even with Jeb Bush if it were a man-to-man contest in Florida.

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