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WASHINGTON – Kentucky Republican Sen. Rand Paul said the Republican Party has to embrace a message of optimism and “look like the rest of America” to win again.

“If we want to win again, if we want to be a bigger party, not only do we have to be a party that looks like the rest of America – black, white, brown, with tattoos, without tattoos, earrings, without earrings – we have to look like the rest of America but we also have to have a party that has the message of optimism,” said Paul in his keynote address at the American Principles Project gala on Wednesday evening.

When the GOP becomes the party of the Constitution, the Bill of Rights and liberty, Republican ideas “will win the day again,” he said.

Paul suggested that Republicans should decide if they are going to “go bold” on fiscal issues or become “Democrat light.”

“We need to talk about how when you borrow and spend money, you steal the value of the dollar. Who does it hurt? Not the wealthy. It hurts the working class,” Paul said at the event, hosted by political commentator Erick Erickson.

“These are issues that we shouldn’t give up and say, ‘oh, issues of poverty, Democrats care more.’ Not only do they not care more, their policies don’t work and aren’t working so we shouldn’t give them the high moral ground,” Paul added.

Paul recalled a letter that he wrote to President Obama when sequestration started to take effect.

“Why don’t we look for the $100 billion that is missing – we don’t know where $100 billion is. It was spent, but every year within a $3.8 trillion budget there’s $100 billion not accounted for, a little more than $100 billion,” Paul said he wrote in the letter. “Why don’t we look for it?”

Paul told the audience that he is still waiting for a response from Obama.

“Five different agencies said they would have to furlough people but after about 6 months of the sequester, nobody was furloughed. They all found some other savings,” he said.

Paul criticized the Ryan-Murray budget plan passed by Congress since it reversed sequestration, which he argued was slowing down the growth of government.

“S&P judged that the sequester was inadequate and they downgraded our debt. They didn’t downgrade our debt because we were debating and fighting over it – they downgraded our debt because they said it wasn’t enough,” he said.

In his remarks, Paul also mentioned that the U.S. taxpayer is paying $3 million to advertise American walnuts in India with “Twiggy the squirrel” as the program’s spokesperson.

“They had a vote in the House of Representatives to get rid of the ‘Twiggy the squirrel’ program,” Paul said. “We lost 320-98. We lost the majority of the Republicans.”

“So you ask yourself,” he continued, “how are we ever going to talk about Social Security and Medicare? That’s two-thirds of the budget.”