Rep. Mick Mulvaney, President-elect Donald Trump’s pick to run the federal budget office, has touted a “silver lining” to shutting down the federal government: less spending.
Fellow conservatives praise the South Carolina Republican for his tough stand as a “fiscal hawk,” an ideologue who refuses to give in to the inevitable pressure to spend.
But budget directors learn quickly that being an ideologue doesn’t work.
Mulvaney declined to comment for this article on potential differences between his fiscal conservatism and what is known of Trump’s spending plans. Still, Mulvaney’s problem might be that while the Office of Management and Budget builds the budget, the director isn’t in charge of it: The president is. What will a Trump federal budget will look like? That’s a favorite guessing game in the nation’s capital right now.
Leon Panetta served as a director of the Office of Management and Budget in President Bill Clinton’s administration. A former member of the House of Representatives, he told McClatchy that the budget job “is about the budget, pure and simple. It’s about the numbers, of course, but it’s also about setting priorities. It’s just that the priorities that matter are those of the president.”
Ultimately, Panetta said, “the director has to be able to provide objective advice to the president, and really can’t pursue any personal angles.”
Often in the past, budget directors began the job with résumés similar to Mulvaney’s only to inch away from their philosophies when presidents saw a need for compromise. Not Mulvaney. Fiscal discipline “seems like it’s in his DNA. It’s not something he’d walk away from,” said Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget, a budget watchdog group.
It’s not something he’d walk away from.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, on Mick Mulvaney’s commitment to fiscal discipline
Longtime Washington budget analyst Stan Collender said Mulvaney was “probably appointed to give Trump credibility with the (conservative) Freedom Caucus on inevitable positions” such as the federal debt and budget deficits. But if policies force Mulvaney to abandon his long-held views, “Mulvaney could be the first Trump Cabinet member to resign over a disagreement with the president,” Collender said.
So far, the president-elect has shown little taste for tough cuts, and a recent poll indicates that his supporters back his spending on infrastructure and immigration enforcement. His plans to increase infrastructure programs and cut taxes would cost trillions.
The nonpartisan Tax Foundation estimates that Trump’s tax and spending plans would cost at least $5.3 trillion over 10 years. Among Trump’s ideas are slashing corporate and income tax rates. He has also suggested dramatic increases in military spending, which would cost an estimated $450 billion over 10 years.
Trump says he could pay for all this because the tax cuts would help grow the economy, an argument that Mulvaney and other members of Congress’ House Freedom Caucus have rejected in the past.
Trump has also touted the “penny plan,” which would reduce non-defense spending by 1 percent from the previous year. His campaign has said the plan would cut spending By $1 trillion over 10 years. An independent estimate pegs the savings at $750 billion.
How that would dovetail with the conservative Mulvaney’s long-held views is difficult to see, and he would not discuss the matter with McClatchy.
Mulvaney wrote on his congressional website in 2013 about why the federal sequester – which cut budgets across the board – wasn’t a total loss. His take: It wasn’t ideal, but it was better than nothing.
If we save just one penny of each federal dollar spent on non-defense, and non-entitlement programs, we can save almost $1 trillion over the next decade.
President-elect Donald Trump in a speech to the New York Economic Club in September
“Thus, we were left with the choice: less-than-ideal spending reductions or no reductions at all,” he wrote. “And we have to start spending less. Period.”
That’s encouraging to budget watchers. “He will clearly be an effective advocate for budget discipline. That is something he has stuck to,” said MacGuineas.
Mulvaney’s challenge will be convincing Trump, and analysts saw his appointment as an indication that Trump is embracing the conservatives’ hard-line approach to deficit reduction. Congress faces a series of deadlines for budget action next year. The debt limit will have to be increased in the spring and summer. Funding for most of the government for the rest of this fiscal year will run out April 28. And lawmakers have to pass a 2018 budget by the start of the next fiscal year Oct. 1.
Democrats see Mulvaney as a convenient target as they fight budget cuts. Adam Hodge, the spokesman for the Democratic National Committee, said in an official statement, “Mick Mulvaney just might be one of the Donald Trump’s most alarming Cabinet nominees.”
Any dramatic cut to federal spending would require changes in entitlement programs, those that are subject to automatic spending increases, such as Social Security and Medicare.
As Douglas Holtz-Eakin, an economist who served as Arizona Republican Sen. John McCain’s 2008 presidential campaign director of domestic and economic policy, said: “That’s where the money is. I’d prefer programmatic changes in the mandatory programs.”
While Mulvaney and, notably, House Speaker Paul Ryan, R-Wis., have suggested ways to curb such growth, Trump said during the campaign that he’d protect Social Security and Medicare benefits.
Panetta suggested that if Mulvaney is confirmed, once he’s in the office he will learn a lesson that all budget directors learn: He doesn’t know nearly as much about the federal budget as he now thinks he does, and he will need to rely on the expertise of the office staff.
“They understand what is actually effective, and what isn’t,” Panetta said.
Still, as Mulvaney wrote in 2013, even the blunt-instrument approach of sequestration had a broader benefit than simply the money saved.
“And that is the silver lining: We are, all of us, Democrats, Republicans and independents alike, having a national dialogue about what is really important for our government, and what our government could do without,” Mulvaney wrote.
“And it has been much too long since we have done that.”