Mick Mulvaney, one of the House’s most fiscally conservative members, will have his confirmation hearings on Tuesday to become President Trump’s White House budget director.
If he’s confirmed, the South Carolina Republican will face a bevy of budget issues on which he and his new boss may disagree. (His confirmation, while likely, may hit a few snags: his budget positions that in the past have been out of step with the broader Republican Party, and his disclosure that he failed to pay payroll taxes for a household employee.)
Mulvaney strongly opposes higher spending and growing deficits, both of which figure prominently in Trump’s key proposals.
As a founding member of the House Freedom Caucus, he was one of a small band of Republicans who tried to oust now former House Speaker John Boehner in part for not being fiscally conservative enough. The group repeatedly drew lines in the sand on federal budgets, pulling the GOP to the right on compromises with the Senate and former President Obama.
Mulvaney also wants a balanced budget amendment to the Constitution. That could put him at odds with the new president’s plans.
“Trump promised an agenda of spending increases and tax cuts that could not possibly result in a balanced budget and now he has appointed an OMB Director who favors a balanced budget,” said Robert Bixby, executive director of the Concord Coalition, a fiscal watchdog group.
But Mulvaney’s job will be to reflect what his boss wants. That’s not to say, though, that he won’t try to influence Trump. It just may be tough.
“He has his work cut out for him to figure out how to reconcile Donald Trump’s policy promises with a plan to get the debt under control,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.
Mulvaney’s first task will be to create the president’s budget. That blueprint will lay out for Congress the president’s fiscal agenda and policy priorities.
Here are just a few issues that Trump and Mulvaney may disagree on:
Infrastructure spending: Among Trump’s priorities will be infrastructure spending. “We will build new roads and highways, and bridges, and airports, and tunnels, and railways all across our wonderful nation,” the new president said in his inaugural address.
On the campaign trail, Trump promised up to $1 trillion in new infrastructure investments, but it’s not clear if he wants that to come from federal coffers or from creating public-private partnerships.
“The deficit clearly is not a big concern for Trump,” Greg Valliere, chief global strategist at Horizon Investments, noted after the inauguration.
Domestic and defense spending: The president — like a lot of Republicans — also wants to beef up defense spending. In the past, Mulvaney has called for any such increases to be offset with spending cuts elsewhere.
The problem with “elsewhere” is that most federal spending goes to entitlement programs like Medicare. Trump has said he doesn’t want to touch those. So that leaves spending on nondefense domestic programs, which is already close to 50-year lows as a percent of GDP.
Nevertheless, Valliere predicts that “there will be savage cuts to domestic programs, and most of the Trump team is on board.”
Medicare and Social Security: Trump has promised repeatedly that he wouldn’t touch entitlement programs. Bernie Sanders, the top Democrat on the Senate Budget Committee, will almost certainly make that a focus in Mulvaney’s confirmation hearing, since Mulvaney has discussed reforming them.
Tax cuts: Trump has called for big tax cuts and they’re estimated to increase the country’s debt by trillions. Mulvaney won’t be driving that policy. Steven Mnuchin, Trump’s pick for Treasury secretary, has said he will. But Mulvaney will have to incorporate them into the president’s budget. And the more they inflate deficit estimates, the more he may push for spending cuts.
Debt ceiling: Raising the debt ceiling, something lawmakers must do in the spring or early summer, is another area where Mulvaney may clash with Trump or his cabinet. He was among those conservatives in 2011 who dismissed the risk of default if the country didn’t raise the debt ceiling quickly. Mnuchin made clear last week, however, that he wants no drama when it comes to Congress authorizing the Treasury to borrow as needed to pay the country’s bills.
