In choosing Rep. Mick Mulvaney (R-SC) as the next White House budget director, President-elect Donald Trump has tapped a leading deficit hawk who once risked triggering the first-ever default on U.S. debt to make a point about the evils of excessive spending.
Mulvaney, 49, who holds degrees in international economics and law, was first elected to the House in 2010 on a wave of Tea Party support that thrust the GOP back in control of the House. Mulvaney went on to become a ringleader of the far right of his party and backed some of the Republicans’ most draconian budget blueprints, including calls for deep cuts in discretionary programs, overhauls of Medicare and Medicaid, and holding the line on defense spending.
Trump described Mulvaney as a “tremendous talent, especially when it comes to numbers and budgets,” in announcing his choice to head the Office of Management and Budget on Friday. By choosing Mulvaney, Trump sought to tout his bonafides as a fiscal conservative concerned about wasteful spending and the mounting $19.9 trillion national debt.
Yet in many ways, Mulvaney’s budget and economic views are the antithesis of Trump’s who ran for election on a platform of major tax cuts, a historic rebuilding of the U.S. military, $1 trillion of new infrastructure spending to spur the economy, and a handful of costly social programs including generous paid family leave.
Independent analysts say many of Trump’s plans – especially his massive tax cut for individuals and businesses -- are premised on overly optimistic “supply-side” economic forecasts and budgetary blue smoke.
The Committee for a Responsible Federal Budget claims Trump’s plan would slash federal revenue by $14.5 trillion over the coming two decades, offset by only $2.5 trillion in spending cuts. Trump would also add $3.8 billion in interest payments to cover the additional borrowing necessary to make up for lost tax revenue.
Trump is counting on a robust economy to reduce that deficit. He expects growth of at least 4 percent, which some economists challenge. Others believe that Trump’s promises of cutting unnecessary regulations and creating more jobs could fulfill that promise by increasing taxes and reducing government outlays.
Whether Mulvaney will have difficulty defending Trump’s economic and spending plans and making the figures add up in his budget documents remains to be seen. There is little in his career in Congress to suggest that he is willing to play games with the budget. What’s more, in taking charge of the powerful OMB, Mulvaney will have to make the transition from his role as a sharp critic of the congressional budget process to a consensus builder charged with getting Trump’s budget blueprint ratified by lawmakers.
Mulvaney, a founding member of the far-right House Freedom Caucus, repeatedly fought over spending priorities with his GOP leaders, including former House Speaker John Boehner of Ohio -- who was forced into an early retirement by Mulvaney and others -- and Boehner’s successor, Rep. Paul Ryan of Wisconsin.
When a sorely divided Congress literally came within hours of allowing the government to default on its borrowing in August 2011, Mulvaney was one of several dozen House conservatives who refused to support a bipartisan deal worked out by Senate Republican Leader Mitch McConnell of Kentucky and Vice President Joe Biden to raise the statutory debt ceiling and avert the crisis.
Furious that lawmakers had turned their backs on his plan geared towards slashing and then balancing the budget, Mulvaney declared, “Some see the [compromise] bill tonight as a great deal. That may be true, but it’s not a solution. At the end of the day, Washington’s spending still has us sprinting towards a fiscal cliff.”
Earlier that year, the newly elected congressman said in an interview with Fox Business News, “I don’t know” what the consequences would be of the government defaulting on its debt. “I’ve asked that question a lot. ... What does a catastrophic event mean, and no one seems to be able to answer the question. I think we would be guessing.”
Raising the debt ceiling is one of the most politically onerous responsibilities of the party in power because of its political symbolism. Although Congress and the White House periodically must raise the Treasury’s borrowing authority to make good on spending and borrowing previously authorized, the party in power invariably is criticized by the minority for allowing spending to get out of hand.
As a rank and file member of the House, Mulvaney could always deny raising the debt ceiling to make a political point. But as Trump’s White House budget chief, he will have no choice but to press the GOP-controlled Congress to raise the debt ceiling again, likely by next fall.
Mulvaney, who was an early backer of Trump’s, frequently took a hard line against the Affordable Care Act and Obama’s budget policies, even when it threatened the orderly operation of government. He and his close colleagues became known as the “Shutdown Caucus” and were instrumental in triggering the 16-day partial government shutdown in October 2013.
At that time, the Democrats still controlled the Senate while the GOP was in charge of the House. Republican bomb-throwers in the Senate, including Ted Cruz of Texas, and many conservative Republicans in the House pressed for a measure to defund Obamacare, over the strong objections of President Obama and his Democratic allies on Capitol Hill. When lawmakers reached an impasse, the government was forced to shut down, except for critically important services.
A bill to end the shutdown and resume funding the federal government was signed into law Oct. 17, but not before the economy suffered losses of $24 billion or more, according to Standard & Poor’s, the rating agency.
In April 2015, Mulvaney clashed with House and Senate GOP budget officials over defense spending. He argued that they were using the Overseas Contingency Operations (OCO) earmarked for financing U.S. fighting in the Middle East as a “slush fund” to circumvent spending limits on the Defense Department’s base operations.
The House and Senate budget conferees had quietly slipped $38 billion more into the OCO account than had been requested by President Obama, with the expectation of shifting those funds into the Pentagon’s base budget for personnel, defense contracting and other more routine activities.
Mulvaney teamed up with Rep. Chris Van Hollen of Maryland, then the ranking Democrat on the House Budget Committee, to offer amendments to strike the extra OCO funds. Mulvaney argued during the floor debate that if Congress believed that the current defense funding caps were too low, it should change the Budget Control Act and increase the spending limits, instead of playing games by using OCO to circumvent the discretionary spending caps.
Mulvaney won kudos for his stand from government watchdogs and other deficit hawks, who were impressed with his efforts to preserve the integrity of the budget process. Edward Lorenzen, a senior adviser to the Committee for a Responsible Federal Budget, said over the weekend that Mulvaney “could be an important voice for applying discipline to all spending, including defense.”