March 17 Deadline for White House Budget Decisions: Mulvaney

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By Nancy Ognanovich

The White House is working with a March 17 deadline to finalize decisions about the fiscal year 2018 budget it will send to Congress this spring, Office of Management and Budget Director Mick Mulvaney said.

Mulvaney said the budget blueprint will reflect President Donald Trump’s plans to ramp up defense spending, build a wall along the U.S.-Mexico border and keep downward pressure on non-defense spending.

“I have to sort of nail down the ’18 budget spending purposes by the end of next week, and then holistic purchases by the end of May, which doesn’t give us a lot of time,” Mulvaney said March 6 on The Hugh Hewitt Show.

Mulvaney, the former lawmaker who founded of the House Freedom Caucus, only recently was confirmed as White House budget chief and now is charged with helping to wrap up FY 2017 spending before a current stopgap expires April 28 and also develop the new administration’s budget plan for next year. The latter will guide Congress as it sets about developing the 2018 appropriations bills.

Mulvaney offered few details about the upcoming budget during the Salem Radio News program but said a top priority will be to steadily increase defense, with a $54 billion hike in ’18 likely to be only the start of increases for the Pentagon.

Mulvaney said the Trump administration will work to get rid of the budget sequestration for defense but made no similar pledges to remove the threat of automatic cuts for the non-defense side of the ledger. He strongly suggested domestic programs are in danger of being sharply cut or “zeroed out” in the plan.

"[I]f you average $500 billion a year for 8 years, that’s $4 trillion dollars during the Obama administration, and yet he left us with a military that is, you know, woefully underprepared,” Mulvaney said.

Defense Priorities

Many members of Congress, including both defense hawks and appropriators, sought assurances from Mulvaney before his confirmation vote that he would support the defense increases they believe are necessary to address readiness issues. As a member of the House Freedom Caucus, Mulvaney often questioned those increases as well as hikes for non-defense.

However, Mulvaney made clear in the March 6 interview with the conservative radio host that he fully supports raising defense spending to $603 billion and beyond. Many lawmakers are pushing to raise annual defense spending to $640 billion over time.

But Mulvaney didn’t offer specifics about the FY18 defense budget being developed and also cautioned that a large increase can’t necessarily be spent quickly. In addition to that budget, he said the administration also is working on a supplemental request for the current fiscal year.

“Keep in mind at the Office of Management and Budget, we don’t solve problems by simply throwing money at them,” Mulvaney said. “One of the questions we ask is, ‘How much money can you spend this year? How much money can you spend, for example, in fiscal year ’17?’”

“There’s only six months left of it. We could take a supplemental to $400 billion if you wanted to, but there was no way that money could be spent, or at least not spent responsibly,” he said. “So we try to walk that tightrope between getting the military the money they need as quickly as they possibly can without just throwing up big numbers to try and make everybody look good.”

Similar discussions are underway on the border wall, with Mulvaney saying it’s likely Trump will seek the first installment of funds in this spring’s supplemental.

"[W]e’re going to try and start to fund this during the 2017 fiscal year,” Mulvaney said.

The Border Wall

Mulvaney said the cost of the wall varies with the parameters of the design.“It just depends on the kind of wall that you want to build, and I don’t think we’ve settled, yet, on the actual construction,” Mulvaney said. “You can do steel, you could do concrete, you can do a combination of concrete and steel. You can supplement it with different types of technologies and so forth.”

“It sort of depends on what you want to build. And of course, when you’re talking about a wall that’s several thousand miles long, there’s going to be certain places where a certain type of wall is more appropriate than others,” he said, adding that border control may want concrete in one location and a see-through barrier in another. “It’s a complicated program. I don’t know what the answer is on the cost, but we will have one shortly.”

In terms of total cost, Mulvaney said some estimates start at $8 million per mile.

“It goes up to about $25 million per mile,” Mulvaney said. “So again, it just depends on, when you’re talking about across 2,000 miles or so, what you decide to build in what areas.”

But Mulvaney said the supplemental and even the 2018 budget will not lay out the full plan. “The president wants to have the wall, wants to have new construction done on the wall before the end of the fiscal year, and we will find a way for him to do that,” Mulvaney said. “We will provide more details in the ’18, and then really, the big details will come in the ’19 budget.”

Planned Parenthood ‘Zeroed Out’?

Mulvaney made clear Trump’s priorities are defense, border control, immigration enforcement, enforcement of existing laws and more funds for school choice.

He suggested other budget items will be cut and didn’t rule out a scenario in which some programs such as Planned Parenthood, National Public Radio and the National Endowment for the Arts are “zeroed out” in the budget request. “In order to do all that, including the $54 billion for the Defense Department, without adding to this year’s deficit—keep in mind, this year’s deficit is already going to be about $490 billion—but in order to prioritize those spendings, without adding to that already large deficit, the money has to come from someplace,” Mulvaney said.“What’s more important—defending the border, defending the country or doing those things? You could also ask it another way. Is NPR so important that we should be borrowing money from our grandkids to fund it next year? I think you know where you and I probably stand on that,” he continued.

Entitlement Program Changes

Mulvaney said longer term it’s possible the Trump administration will propose changes to the entitlement programs that are seen as the primary drivers of the federal deficit and debt.

"[A]s soon as the 2018 spending budget is done at the end of next week, I’m hoping to put together something for the president to look at on the other pieces of entitlement spending, or mandatory spending,” Mulvaney said.

Mulvaney said Trump intends to “protect and save Social Security, protect and save Medicare.” Still, Mulvaney said he’s started discussions in the West Wing about how mandatory spending drives the debt.

“I think people are starting to grab it. There are ways that we can not only allow the president to keep his promise, but to help him keep his promise by fixing some of these mandatory programs,” Mulvaney said.

Mulvaney said Medicaid is a target and could be dealt with as part of an effort to repeal and replace the Affordable Care Act. Later savings could be found in Social Security, he said.

“I don’t think you’re going to see this president have any interest in raising the retirement age anytime soon,” Mulvaney said. “But we need to address things like Social Security Disability, which you and I both know is one of the fastest growing and probably one of the most abused mandatory programs in the country.”

“Yes, there are things that we can do there. So I know the national narrative, and the national narrative is we’re not going to do anything on mandatory spending. But I think really what this president is interested in doing is not affecting the benefits for folks, and saving these programs long term,” he said. “And I think there’s a way to do that.”

To contact the reporter on this story: Nancy Ognanovich in Washington at nognanov@bna.com

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

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