Trump finds budget director to carry out tax cuts for big business, funding cuts for everything else

There’s a hawk in the henhouse now.

Rep. Mick Mulvaney, R-S.C. gestures during a news conference on Capitol Hill in Washington, Wednesday, May 11, 2011, to discuss the budget. CREDIT: AP Photo/Harry Hamburg
Rep. Mick Mulvaney, R-S.C. gestures during a news conference on Capitol Hill in Washington, Wednesday, May 11, 2011, to discuss the budget. CREDIT: AP Photo/Harry Hamburg

Rep. Mick Mulvaney, another white, male, climate change-denying Republican has been tapped for the Trump administration’s inner circle, according to multiple reports. He will be nominated to head the Office of Management and Budget (OMB).

South Carolina’s Mulvaney is a founding member of the House Freedom Caucus, which has vehemently opposed raising the nation’s debt ceiling without deep spending cuts. Mulvaney made his name by opposing government spending, so he is just the person to reconcile President-elect Donald Trump’s proposed tax overhaul with reality.

OMB is tasked, in conjunction with the president’s office and the administrative agencies, with developing the federal budget, which is sent to Congress for approval.

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If the budget exceeds the previous congressionally approved debt limit, Congress must raise the debt ceiling. In 2014, the body famously failed to do so, shutting down the federal government for weeks and costing taxpayers an estimated $800 million. The current debt ceiling is expected to be hit this spring, although the Treasury may use extraordinary powers to stave off a shutdown until the fall.

Mulvaney, who came into the House in the Tea Party wave of 2010, said at time that he “didn’t know” what effect not raising the debt ceiling would have and that he had “yet to meet someone who can articulate the negative consequences.”

According to a report from the Center for American Progress, during the nearly four-week, $800-million shutdown that Mulvaney pushed for, Social Security, Medicare, and Medicaid checks were not sent out; international confidence in U.S. government bonds was shaken; and national parks and other federally-funded services were closed.

After his expected nomination was reported, Mulvaney told reporters that “the Trump administration will restore budgetary and fiscal sanity back in Washington after eight years of an out-of-control, tax and spend financial agenda, and will work with Congress to create policies that will be friendly to American workers and businesses.”

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According to several sources, including Swiss bank UBS, the Center for Government Responsibility, and the Tax Policy Center, Trump’s plan would dramatically underfund the government, adding trillions to the national debt over the next decades.

“His proposal would cut taxes at all income levels, although the largest benefits, in dollar and percentage terms, would go to the highest-income households,” the Tax Policy Center found. “Federal revenues would fall by $6.2 trillion over the first decade before accounting for added interest costs. Including interest costs, the federal debt would rise by $7.2 trillion over the first decade and by $20.9 trillion by 2036.”

The Congressional Research Service found that cuts to corporate tax rates alone would create “a hole in the federal budget of $1.2 trillion to $1.5 trillion over the next 10 years,” CNBC reported.

Of course, there is likely to be new room in the budget from cutbacks at the Environmental Protection Agency and the Department of Energy, where the nominees have expressed a desire to do away with the group altogether. At the Commerce Department and Department of Homeland Security, nominees are pushing for increased privatization of services.

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While much of the government agencies’ funding is mandated by law, research, enforcement, and other critical but non-mandated work could be slashed. It will be nearly impossible for Mulvaney to fill the estimated shortfall that Trump’s tax plan is going to cause. For instance, discretionary spending for those four agencies together only make up $89 billion (including some $40 billion for the Department of Homeland Security alone). That’s roughly 10 percent of the shortfall, annually — to cut every single non-mandated role of four major federal agencies.

Under a Rep. Paul Ryan (R-WI)-led House, a scaled-back budget is likely to be met with approval. But the numbers still have to work.

“We are going to do great things for the American people with Mick Mulvaney leading the Office of Management and Budget,” Trump said in a statement reported by the Washington Post. “Right now we are nearly $20 trillion in debt, but Mick is a very high-energy leader with deep convictions for how to responsibly manage our nation’s finances and save our country from drowning in red ink.”

Trump has said that he will increase funding to defense, which currently makes up about 16 percent of the federal budget, at $602 billion.

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A recent bombshell report by the Washington Post revealed that a Pentagon audit of itself found that over five years, it could save $125 billion — or $25 billion a year — mostly through streamlining bureaucracy.