Conservative Mulvaney struggles to sell tax bill to new constituency: Moderates

Director of the Office of Management and Budget Mick Mulvaney departs after a television interview at the White House.
Director of the Office of Management and Budget Mick Mulvaney departs after a television interview at the White House. AP

White House budget chief Mick Mulvaney, long considered a “fiscal conservative whisperer” on Capitol Hill, is trying to woo an entirely different constituency to support his party’s tax bill: Moderates.

So far, the effort is largely falling flat.

This is a new dynamic for the former South Carolina Republican congressman. He was given his job at the Office of Management and Budget in part because administration officials saw his ties to the House Freedom Caucus helping advance President Donald Trump’s legislative agenda.

But in the legislative debate over taxes, it’s not members of the staunchly conservative Freedom Caucus who need convincing. In fact, Mulvaney said at a brief with a small group of reporters at the Old Executive Office Building Tuesday he’s barely heard from those lawmakers over the past days and weeks, even as the House prepares to vote for the “Tax Cuts and Jobs Act” on Thursday.

Instead of Freedom Caucus-types, it’s now mostly the center-right Republicans from New York, New Jersey and California who are potential obstacles to the party fulfilling a major campaign promise to overhaul the nation’s tax code.

Lawmakers from these states are irked by proposals to fiddle with existing state and local tax, or SALT, deductions in the high cost-of-living areas they represent. Republicans have 240 of the House’s 435 seats, meaning they can only afford to lose 22 GOP votes if the tax bill is to pass. No Democrats are expected to vote yes.

The House tax plan would drop caps on mortgage interest deductions to $500,000 for new homes and allow taxpayers to deduct up to $10,000 of their local property taxes. It eliminates deductions for state and local income tax.

The original draft of the Senate bill, which is being considered by the Finance Committee this week, would cap the mortgage interest deduction at $1 million and ax all state and local tax deductions entirely.

Lawmakers from New York, New Jersey and California say they are being courted mainly by National Economic Adviser Gary Cohn, Treasury Secretary Steve Mnuchin and Vice President Mike Pence. Mulvaney is mostly being dispatched to appear on cable news shows, radio news programs and reporter roundtables to make the case that all GOP lawmakers should support tax overhaul legislation.

Many aren’t being moved by their messaging.

On Tuesday morning, Mulvaney was asked how he would respond to New York Republican Rep. Lee Zeldin, who is vowing to oppose the House tax bill over the state and local tax issue.

Mulvaney said he’d tell Zeldin that people in his home state of South Carolina, where cost of living expenses are lower, shouldn’t have to subsidize people in more expensive, northeastern enclaves.

“If our lives are entirely, exactly the same, we make the same amount of money, we have the same car, our kids go to the same schools … but you live in New York City, and I live in South Carolina, why should I pay more federal taxes than you do? Because that’s the way the world works right now. And I think you could make the argument that is not fair, that is not right,” Mulvaney said. “I would say, ‘Lee, is it fair?’ And I would hope that he thinks it’s not.”

In a separate interview later in the day, Zeldin said that “anyone who believes that New York is being subsidized by the rest of the country (should) look at the full tax policy and spending policy, because it’s just not an accurate conclusion … It’s pretty clear that New York is a net contributor, and that’s even with the SALT deduction.”

Zeldin used the Highway Trust Fund as an example, where his district was paying into the pool of money used to fund infrastructure projects around the country, even though it wasn’t receiving as much in return.

Mulvaney’s conservative congressional allies, who for years have railed against ballooning national debt, are more supportive of the tax bill despite its potential impact on the debt.

Mulvaney said the only member who had weighed in to date on the deficit was Sen. Bob Corker, R-Tenn., a retiring lawmaker who has become an antagonist of the Trump administration. Corker confirmed that he had expressed to Mulvaney his reservations about a tax overhaul bill that blows through the national deficit, as current proposals would.

“I hope there’s gonna be a way to alleviate those concerns,” he said

Rep. Mark Sanford, a fellow South Carolina Republican and member of the Freedom Caucus, told McClatchy that it’s true fiscal conservatives were not complaining about the tax bill to Mulvaney as they might about other measures that increase the deficit, in part because Republicans “are caught up in ‘getting a win.’”

Sanford said he was struggling with whether to vote for the House tax bill, saying it did not completely fulfill a promise to achieve middle class tax relief and without question did little to address the national debt.

At the reporter briefing, Mulvaney was steadfast in his support for the Republican tax plan — and unwavering in his confidence that a bill would get passed.

“Folks want to get a deal done,” he said.

Emma Dumain: 202-383-6126, @Emma_Dumain

Director of the Office of Management and Budget Mick Mulvaney unveiled President Trump’s FY18 Budget. “We looked at this budget through the eyes of the people who are actually paying the bill,” Mulvaney said.