Anti-Deficit, Anti-Spending Groups Praise Mulvaney’s Pentagon Efforts

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By Jonathan Nicholson

Anti-spending and anti-deficit groups praised Rep. Mick Mulvaney (R-S.C.), President-elect Donald Trump’s pick for budget chief, for his record of cracking down on the Pentagon’s use of war funds to pay for regular spending.

Mulvaney—who was chosen Dec. 17 to be director of the Office of Management and Budget, the White House office in charge of the administration’s budgeting and regulatory policies—has previously worked with Democrats on legislative language to restrict the Pentagon’s use of Overseas Contingency Operations (OCO) funds.

The fund began life in the early 2000s as an accounting mechanism meant to separate funding for day-to-day Pentagon operations from paying for the wars in Iraq and Afghanistan. But in recent years, Republicans have pushed to divert OCO funds to make up for shortfalls in regular defense appropriations.

Because the OCO funds do not count against the annual defense funding cap, adding them would not trigger the across-the-board spending cuts known as sequestration. The OCO use has also led critics to call the fund a “slush fund” for defense hawks.

Mulvaney, who came to Washington in 2011 after defeating then-House Budget Committee Chairman John Spratt (D-S.C.), pushed for a House amendment to codify OMB eligibility criteria for Pentagon expenses to be paid for by OCO funds.

Challenged ‘Budget Gimmick.’

The amendment to the annual defense policy bill adopted in the House passed that chamber in May, but it was left out of the final conference report. Still, Mulvaney’s efforts to restrict OCO fund use drew praise from groups opposed to federal spending and increases to the deficit.

“He was one a few House Republicans who took on the budget gimmick of boosting the Overseas Contingency Operations account to get around the spending caps. He also took on farm bill waste and was willing to work across the aisle to get rid of wasteful spending,” said Steve Ellis, vice president of the anti-spending Taxpayers for Common Sense, in an e-mail. “He won the ‘Mr. Smith Goes to Washington’ award from us last year for his work in these areas.”

Taxpayers for Common Sense awarded Mulvaney a 91 percent rating in 2015.

Resistant to Tax Cuts?

Robert Bixby, executive director of the anti-deficit Concord Coalition, also noted Mulvaney’s OCO efforts.

“As a co-founder and leader of the House Freedom Caucus, Mulvaney has advocated deeper spending cuts than House Republican leaders have agreed to, even if that meant shutting down the government,” Bixby said in a blog post on the group’s website.

The House Freedom Caucus, whose conservative and libertarian Republicans have often been a thorn in GOP leaders’ sides by advocating for more spending cuts, was also at the center of an unsuccessful effort in 2013 to roll back the Affordable Care Act by setting the stage for a 16-day government shutdown.

“In his quest to reduce spending he has not spared the Pentagon budget from scrutiny, particularly the gimmick of using the [OCO fund] to avoid spending caps,” the blog post said. “Some of these hard-line positions might prove difficult to maintain as budget director where his job will require negotiations with his former colleagues in Congress to push through the administration’s fiscal agenda.”

In his campaign, Trump advocated for a boost in infrastructure spending, more money for the military and a tax overhaul that budget groups worry will lead to large budget deficits.

Maya MacGuineas, president of the bipartisan anti-deficit Committee for a Responsible Federal Budget, praised Mulvaney for his OCO stance, but was unsure how it would fit into the Trump White House.

“Mulvaney has proven himself to be very concerned about not adding to the debt, and principled in not tolerating budget gimmicks to do end runs around budget constraints,” she said in an e-mail. “There is a real risk he will not show the same resistance to debt-financed tax cuts, but it will definitely be good to have a deficit hawk at the table who hopefully advocates for bringing the debt down, not up.”

To contact the reporter on this story: Jonathan Nicholson in Washington at jnicholson@bna.com

To contact the editor responsible for this story: Paul Hendrie at phendrie@bna.com

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