Why did he say it was unconsitutional? Perhaps because it was discriminatory? Then all welfare is.
Because it's not in the constitution. I'd assume that Paul is taking the position that most libertarians take on the 'general welfare' clause - namely that it's a qualifier on the taxation power and was never meant as a blank check congressional power.
Neither is the indivdual right to own a handgun, but we don't hear Paul whining about it.