By Editorial Board,
AS THE federal government has grown, so has the power and responsibility of the White House-based agency charged with keeping tabs on spending, revenue and regulation. The director of that agency, the Office of Management and Budget, is much more than the president’s bean-counter; he or she is a key player on policy, as well as, traditionally, the voice of fiscal responsibility both within the executive branch and in the public arena.
OMB director looks to be an especially challenging post under Donald Trump, because the president-elect has sent highly mixed fiscal signals. Specifically, he has promised large tax cuts and a 10-year, $1 trillion infrastructure program, while also pledging to leave Medicare and Social Security untouched. That leaves very little in the way of credible options to keep yet another promise: curbing the national debt.
Is Mr. Trump’s choice for the OMB up to the job? Rep. Mick Mulvaney (R-S.C.) is certainly outspoken about fiscal discipline, having joined fellow members of the tea party and the House Freedom Caucus in repeatedly warning against deficits — and in using the federal debt ceiling as a bargaining chip over the issue during the Obama administration. This struggle, which included the 16-day partial government shutdown in 2013, might not have been necessary if Mr. Mulvaney and company had conceded that achieving fiscal stability necessarily involves increased revenue as opposed to the spending-cuts-only orthodoxy that they have done so much to reinforce.
Mr. Mulvaney played down predictions of a disastrous government default if the debt ceiling were not raised. Those warnings, he told NPR in 2011, reflected “a good bit of politics.” In fact, the United States must meet its obligations on time, lest financial markets tremble. Coming from the OMB director-designee of a president-elect who mused aloud that “you can do things with discounts” to avoid paying back all of the national debt, this bit of history from Mr. Mulvaney’s freshman term in the House is not reassuring.
Also concerning, Mr. Mulvaney is the author of legislation that would essentially recreate the unstable pre-financial-crisis status quo in housing policy by restoring government-sponsored mortgage guarantors Fannie Mae and Freddie Mac to private ownership. This would be a huge taxpayer-subsidized windfall for a handful of hedge funds that own beaten-down Fannie-Freddie stock and have tried — and failed — repeatedly to convince the courts, Congress and President Obama to deliver the companies to them. What’s that got to do with fiscal conservatism?
To be sure, Mr. Mulvaney has shown some flashes of intellectual consistency. In 2015, he argued that the Pentagon should have to make off-setting spending cuts rather than be allowed to raid the so-called “overseas contingency” fund meant for ongoing military operations as Republican hawks wanted. Again, this is the sort of dilemma that could be avoided if the GOP were to acknowledge the need for more revenue to meet the country’s defense responsibilities and other valid priorities. But at least Mr. Mulvaney called out this budget gimmick for what it was.
Senators should ask Mr. Mulvaney to tell them in detail how he would hold his new boss to the same minimum level of intellectual honesty.
Read more here: The Post’s View: Trump’s economic plan goes from worse to bad The Post’s View: The GOP’s radical tax plan Lawrence Summers: On tax reform, take a page from Ronald Reagan