(Bloomberg) — President Donald Trump's pick for budget director, Mick Mulvaney, said Tuesday the nearly $20 trillion national debt needs to be "addressed sooner rather than later" and that he would push Trump to break his campaign promises and cut Social Security and Medicare.
Mulvaney, a Republican congressman from South Carolina, told senators at his two confirmation hearings that he would "tell the truth" to Trump about the need for entitlement program changes. He said without doing something soon, the Medicare and Social Security trust funds could go bankrupt — while also maintaining he wouldn't advocate cutting benefits to current beneficiaries. He said the U.S. needed to shrink the almost $20 trillion national debt, which he compared to an ordinary American family owing more than a quarter of a million dollars on credit cards.
"Families know what that would mean for them," Mulvaney said Tuesday in Washington as he faces a pair of Senate committees over his nomination to run the Office of Management and Budget. "It is time for government to learn the same lesson."
OMB helps the president manage the federal budget.
OMB also oversees regulation impact and paperwork burden review programs that may affect just much time and effort complying with federal requirements really takes.
Related: OMB reviews life company tax form
As a congressman, Mulvaney has voted against debt ceiling increases and criticized House Speaker Paul Ryan's budgets for spending too much. If he's installed in the post — and given the leeway to negotiate his way — the next debt-limit debate could include a fight over whether future spending should be cut to offset money spent in decades past. The debt limit returns in March, so those discussions aren't far away.
Mulvaney said Tuesday it would be "undesirable" to get to a situation where he would need to consider how the federal government would grapple with hitting the debt ceiling. But, Mulvaney said, he does support prioritizing payments should the nation need to do so.
Senate Budget Chairman Mike Enzi, a Wyoming Republican, hailed Mulvaney as a "vigilant budget hawk" who would help quickly address the nation's "staggering $20 trillion debt burden."
"Congress needs an OMB director we can work with to put our nation on the right fiscal path," Enzi said.
But Senator Bernie Sanders, the Vermont independent who challenged Hillary Clinton for the Democratic presidential nominee in 2016, said Mulvaney's budget philosophy was "exactly opposite" of Trump's campaign vow not to cut Social Security, Medicare or Medicaid.
"The opinions and views of Mr. Mulvaney are way out of touch of what the American people want," Sanders said.
Mulvaney told the Senate Homeland Security and Governmental Affairs panel that he supports slowly raising the Social Security retirement age, thinks that all Medicare benefits should be means-tested and thinks that 10 percent or $100 billion in annual agency spending may be rooted out as waste.
"If we do nothing then by the time I retire there will be an across-the-board 22 percent cut to benefits," Mulvaney, 49, said.
The trustees for Social Security and Medicare say that Social Security's trust funds won't be depleted until 2034 and Medicare's hospital insurance (Part A) trust fund is good until 2028, well after Trump leaves office.
Mick Mulvaney says Social Security and Medicare are on the verge of bankruptcy. (Photo: iStock)
Nanny tax
Sanders, the ranking member on the Budget Committee, also criticized Mulvaney after he disclosed that he didn't pay more than $15,000 in taxes for a household employee, noting a similar issue had derailed former Sen. Tom Daschle's 2008 nomination to head the U.S. Department of Health and Human Services.
Mulvaney said he hired the nanny shortly after having triplets in 2000 and mistakenly didn't consider her a household employee for tax purposes.
"When they came home, we hired someone to help my wife take care of the children," Mulvaney said. "In my mind she was a babysitter: She did not live with us, she did not spend the night there, she did not cook, she did not clean, she did not educate the children. She helped my wife with the kids."
Mulvaney said that since being nominated he has filed the necessary tax paperwork and paid the taxes and will pay any penalties or interest on what was owed.
Earned honestly
Mulvaney was part of the wave of fiscal-conservative Tea Party members elected in 2010 and has been one of the most pugilistic advocates for cutting government spending. He is one of eight Trump nominees that Senate Minority Leader Chuck Schumer has placed in "the most troubling" column. More than 50 groups have sent letters to Capitol Hill urging members of Congress to reject Mulvaney's nomination, arguing he's too extreme.
As a congressman, Mulvaney has voted against debt ceiling increases and criticized House Speaker Paul Ryan's budgets for spending too much. (Photo: iStock)
