The White House Office of Management and Budget is one of the most powerful, but obscure, agencies in the federal government. Perhaps for that reason, Rep. Mick Mulvaney’s nomination to be President Donald Trump’s budget chief has largely flown under the radar until now.
But the South Carolina Republican, a founding member of the House Freedom Caucus, is likely to face tough questions at his confirmation hearings before the Senate Budget Committee and Senate Homeland Security and Governmental Affairs Committee on Tuesday.
Here’s what to watch:
Tax problems
Mulvaney’s nomination is most vulnerable over his admission that he didn’t pay more than $15,000 in taxes for his triplets’ nanny from 2000 to 2004. He told the Senate Budget Committee that he learned of the failure to pay taxes during the confirmation review process and then paid what he owed in federal taxes. State taxes and any penalties have yet to be determined.
Senate Minority Leader Chuck Schumer (D-N.Y.) immediately called the issue disqualifying, saying previous Democratic Cabinet nominees, like former Sen. Tom Daschle, were forced to withdraw over similar tax lapses. “The household employee is right in front of you,” he told reporters last week. “You know you have to pay taxes.”
Republicans, who have the votes to confirm him on their own, have said they wanted more information on the matter. “Certainly that’s an issue. It is,” said Sen. Mike Crapo (R-Idaho), a member of the Budget Committee. “I think we need to dig into the details of exactly why and how it developed.”
Government defaults and shutdowns
While politicians from both parties routinely vote against raising the federal debt limit, few would suggest that failure to do so wouldn’t lead to a devastating default by the U.S. government. But that’s the position Mulvaney took repeatedly during the 2011 debt ceiling fight, when Republicans tried to secure deep spending cuts from President Barack Obama.
“I have never believed the threat that this country will default on its debt as a result of any failure to raise the debt ceiling,” he said after voting against the bipartisan bill to stave off a debt ceiling breach.
The debt limit will be reached on March 16, at roughly $20 trillion, and Congress will again need to act to extend the government’s borrowing ability — something Treasury secretary nominee Steven Mnuchin said at his confirmation hearing that he hoped lawmakers would do quickly.
Similarly, Mulvaney backed a failed Republican bid to defund Obamacare that led to a two-week government shutdown in October 2013. Two years later, he led a charge by conservatives to try to defund Planned Parenthood or risk a shutdown.
Senate Democrats are anxious about whether Mulvaney will play with fire now that he’s got a bigger perch.
“I viewed him in the kind of pro-shutdown and anti-compromise caucus,” Sen. Tim Kaine, a Budget Committee member, said of Mulvaney. “Is the guy an ideologue who’s going to be blind to the consequences of his actions?”
Medicare and Social Security
Mulvaney has been vocal about his support for overhauling the popular retirement programs, arguing action is needed to maintain their solvency.
“We have to end Medicare as we know it. We have to fix it,” he told Fox News in 2011. Democrats are sure to pounce on that statement, made in support of Speaker Paul Ryan’s premium support proposal, which critics call a move to “voucherize” Medicare.
The same year, Mulvaney told MSNBC that Social Security was a “Ponzi scheme” that might not be able to provide assistance to people in the years to come; he backs changes to the program, including raising the retirement age for people to get their full benefits.
Trump, of course, ran for president vowing not to touch Medicare and Social Security. Look for Sen. Bernie Sanders, the ranking member of the Budget Committee, to ask whether Mulvaney will stand by Trump’s campaign promises or try to cut the programs.
The Pentagon’s budget
Another divide between Trump and Mulvaney likely to come up is over defense spending. Trump has said he wants to rebuild the military and give big budget boosts to the Pentagon. Mulvaney, however, has tried to shrink the Overseas Contingency Operations account, which is intended to pay for wars abroad but has been used as an end-run around stiff spending caps.
This issue might scramble typical partisan lines; Mulvaney has previously teamed up with liberal Democrats, including the Budget Committee’s Chris Van Hollen, to restrict the budget gimmick. Similarly, Sen. Claire McCaskill, the ranking member of Homeland Security and Governmental Affairs, has derided OCO as a “slush fund.” Republican defense hawks, meanwhile, may want assurances that Mulvaney will follow Trump’s lead in this case.
Domestic spending
Mulvaney backs far-reaching changes to reshape the federal government and curb the $20 trillion national debt. He’s a strong proponent of conservatives’ “Cut, Cap and Balance” proposal, which would place strict limits on spending and amend the Constitution to require a balanced federal budget.
In a sign of his small-government zeal, Mulvaney once cast doubt on the need for government-funded scientific research during the debate over countering the Zika virus. He also voted against providing disaster relief after Hurricane Sandy because it wasn’t paid for and would add to the deficit. Democrats might attack those stances, but Republicans will tout his fiscally conservative bona fides.
“I’m very much enthusiastic about his nomination,” said Sen. John Boozman, a Budget Committee Republican from Arkansas. “The president talked about getting the debt and deficit under control and certainly Congressman Mulvaney’s history is doing exactly that.”
Regulations
Mulvaney will also exercise considerable influence over the Trump administration’s regulatory actions as OMB director. Before any federal agency can issue a major rule, it must be approved by the Office of Information and Regulatory Affairs, a powerful office within OMB that reviews the rule’s costs and benefits.
Trump has already issued a moratorium on new federal regulations and wants his Cabinet to look for “job-killing” rules that should be repealed. That should suit Mulvaney just fine, as he’s been a frequent critic of the Obama administration’s ambitious regulatory agenda.
Seung Min Kim contributed to this report.