“I have no reason to believe the president has changed his mind” on not touching entitlement programs, Mulvaney said. But, he added, “My job … is to be completely and brutally honest with him.”
Mulvaney would bring a stridently hawkish voice to the Office of Management and Budget. On Tuesday, he said he remains in favor of raising the retirement age for Social Security to 70 but emphasized that he would not reduce benefits for current recipients. He also reiterated his support for means-testing to qualify for Medicare.
Democratic lawmakers voiced concerns that Mulvaney’s nomination signaled that Trump was backing away from his promise to leave the programs unchanged.
“The idea and opinions of Mr. Mulvaney are way out of touch,” budget committee ranking member Sen. Bernie Sanders of Vermont said. “And more importantly, they are way, way out of touch with what President Trump campaigned on.”
During his hearings, Mulvaney confronted recent revelations that he neglected to pay $15,000 in taxes in connection with a household employee. Mulvaney discovered the error during the vetting process following his nomination, drawing sharp rebukes from some Democratic lawmakers. Similar problems plagued several of former president Barack Obama’s nominees, including former South Dakota Sen. Tom Daschle for head of Health and Human Services.
“We made a mistake in my family,” Mulvaney said Tuesday, adding that he has paid the missing taxes.
On the fiscal front, Mulvaney has challenged the need to raise the national debt ceiling, and on Tuesday, he said that he believed the federal government should consider prioritizing payments if it were in danger of breaching the limit again. In his hearing before the homeland committee, ranking Democrat Sen. Claire McCaskill (Mo.) pointed out that his remarks contradicted testimony from Trump’s nominee to lead the Treasury Department, Steven Mnuchin, who said during his confirmation hearing last week that “there should be no uncertainty that we are paying the bills.”
“What will happen if your views and proposals are adopted wholesale?” McCaskill asked Mulvaney. “If that happens, I fear that the American people and the global economy are in for a rude awakening.”
Mulvaney also faced scrutiny from his own party Tuesday. Republican Sen. John McCain of Arizona questioned Mulvaney’s support for reductions in defense spending. McCain also called the 2013 government shutdown a “shameful chapter” in history.
“You’ve spent your entire congressional career pitting the debt against the military,” McCain said. “I am deeply concerned about your lack of support for our military.”
Elected to Congress during the tea party wave of 2010, Mulvaney has become known as one of the most vociferous deficit hawks within House GOP ranks. He was a founding member of the conservative Freedom Caucus and a key driver of the group’s efforts to oust then-House Speaker Rep. John Boehner in 2015. He supported the government shutdown in 2013 amid an impasse over the Affordable Care Act and proved willing to do so again two years later as part of an effort to defund Planned Parenthood.
He is known as an anti-deficit crusader who backs the controversial “penny plan” that would cut 1 percent of federal spending every year for five years. Supporters claim it would eliminate the deficit, but critics say it is a haphazard way of chiseling away at popular entitlement programs.
“He has to tell the president exactly what things cost,” Republican Sen. Tom Cotton of Arkansas said of Mulvaney on Tuesday. “The president of course sets the agenda, but he deserves a clear-eyed view — not rose-colored glasses.”
Many of Trump’s economic advisers have touted the president’s plans to overhaul the tax code and renegotiate trade agreements, measures that they argue will boost annual economic growth to 4 percent or higher. The White House has also proposed an infrastructure package that could total $1 trillion in public and private financing, though the details of the program remain unclear. Mulvaney, along with other key GOP lawmakers, have opposed infrastructure spending in the recent past.
Trump’s advisers have said relatively little about how they might pay for his agenda — and it could fall to Mulvaney to make sure the numbers add up. Several independent analyses estimate Trump’s tax plan alone, which includes slashing the corporate rate and lowering individual taxes, could reduce federal revenue by trillions of dollars over the next decade.
Asked about whether tax cuts should be allowed to increase the deficit, Mulvaney said that reforming the tax code could generate economic growth.
Trump “should look first and foremost on the effect on the overall economy,” Mulvaney said. “I think the best chance you have to reduce the deficit or balance the budget is to accomplish economic growth.”
Another possible way to balance the books could be to dramatically reduce government spending in other areas. According to the Hill, Trump’s staff is considering cuts to the Energy and Commerce departments, along with the elimination of arts programs, such as the National Endowment for the Arts, that could lower spending by as much as $10.5 trillion over the next decade.
Mulvaney said Tuesday he had not seen those proposals.