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Paul: Borrowing for unemployment benefits 'weakening us as a country'

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Sen. Rand Paul, R-Ky., is on a mission to get more minority voters and urban dwellers to support Republicans -- and to do it, he's pitching a plan that would end long-term unemployment insurance, outlaw traditional pensions, and offer sweeping tax reductions to hard-hit areas.

Paul, who's openly considering a bid for president in 2016, said in a Friday interview with NBC News that extending unemployment benefits past 26 weeks will hurt workers -- and that paying for it without raising taxes weakens America.

"Does it make sense for our country to borrow money from China to give it to the unemployed in America? That is weakening us as a country," Paul told NBC News.

Right now, more than a million of the long-term unemployed are set to lose their benefits three days after Christmas. Democratic Senate Majority Leader Harry Reid has said he wants Congress to extend them as soon as lawmakers return in January.

"If people think we need two years of unemployment insurance they should come forward and say we want to raise the taxes, and the contributions of employees and employers, for unemployment insurance," Paul said.

Paul contended that the checks allow people to go unemployed for longer and become less desirable hires for employers.

"When I said it's a disservice, I meant it - I am worried about the workers. Not that I think they become bad people by becoming unemployed longer, but that the longer they're unemployed, the less likely they are to ever get a job again," Paul said.

A different visionPaul's plans represent a fundamentally different vision from President Barack Obama's -- and would go further than the pension and benefits changes that some Republican governors with presidential ambitions have implemented. Gov. Scott Walker of Wisconsin and Gov. Chris Christie of New Jersey have both pushed for reforms to public benefits systems; both governors won some reforms, and Walker weathered a recall election in the wake of union outcry.

Paul told NBC News that defined benefit pension plans amount to "fraud" and they should be eliminated.

"I really am for changing the way we do pensions. I don't think you should be allowed to perpetrate a fraud like that, either through city, state or private, to tell you the truth," Paul said of the defined benefit pension plans that many governments still offer to their employees.

"The principle that a pension would be a defined benefit -- that basically you're going to get all of your health care and $30,000, or $50,000, or $100,000 a year -- we can't really plan that way and it's a fraud, in a way," he said. "So I would outlaw those kind of pensions -- I just wouldn't have them anymore."

Plans for DetroitPaul spoke to NBC News on Friday, two weeks after returning from hard-hit Detroit, where he pitched a tax-cutting plan to jump start growth in the struggling, bankrupt city and opened the state Republican Party's new African-American Engagement Office.

"We tend to be a party of small towns and rural America but when it gets to big cities we lose every one of them. So I'm making a real conscious push to engage those voters," Paul told NBC News.

Paul has proposed legislation to turn Detroit -- and any other locality with an unemployment rate that's more than twice the national average -- into an "economic freedom zone" where corporate taxes are just 5 percent, capital gains taxes are eliminated and both workers and employers see payroll taxes cut.

"I tell people this is Jack Kemp's plan on steroids," Paul said, invoking the anti-tax crusader's "enterprise zones."

Paul is pushing the plan with Senate Minority Leader Mitch McConnell, R-Ky., and Paul says it would help struggling localities in his home state of Kentucky, as well.

But it's clear that Paul's ambitions go beyond the Senate. He said he plans to spend Christmas in Texas with his father, former presidential candidate Rep. Ron Paul, and that the subject of whether or not to run is likely on the agenda.

"I'm sure there will be some discussion," he said.