President Donald Trump’s budget director raised eyebrows during a recent appearance on Fox News Sunday when he seemed to display a tolerance for bigger deficits.
Mick Mulvaney’s comments came during a discussion of Trump’s tax plan, which, due to a variety of tax cuts, has been independently projected to add nearly $5.6 trillion to the federal debt over the next 20 years when compared to the current path of debt growth.
Host Chris Wallace reminded Mulvaney about his tenure in the House, when Mulvaney often took a hard line on deficits and the debt.
"You were a deficit hawk," Wallace said. "What happened, sir?"
After a brief back-and-forth about the groups that had projected the debt increase, Mulvaney responded, "I've been very candid about this. We need to have new deficits because of that. We need to have the growth, Chris.
"If we simply look at this as being deficit-neutral, you're never going to get the type of tax reform and tax reductions that you need to get to sustain 3 percent economic growth. We really do believe that the tax code is what's holding back the American economy."
Was Mulvaney’s embrace of future deficits a flip-flop, as Wallace suggested?
We put his position on the Flip-O-Meter, which describes whether someone’s stand has changed and is not meant as a value judgment.
The evidence shows it has changed.
Mulvaney’s remarks on Fox News Sunday clashed in tone and substance with a portion of his opening statement at his Senate confirmation hearing in January 2017.
"We can turn this economy, and this country around, but it will take tough decisions today in order to avoid impossible ones tomorrow," Mulvaney told the Senate Budget Committee. "Our gross national debt has increased to almost $20 trillion. That number is so large as to defy description. ... I believe, as a matter of principle, that the debt is a problem that must be addressed sooner, rather than later. I also know that fundamental changes are needed in the way Washington spends and taxes if we truly want a healthy economy. This must include changing our government’s long-term fiscal path, which is unsustainable."
Mulvaney’s tough-on-debt remarks at his confirmation hearing were consistent with his position while in Congress since 2010.
Mulvaney made clear shortly after taking office that he had little patience with rising debt. In January 2011, Mulvaney joined a faction of Republicans seeking to cut federal spending by $2.5 trillion over 10 years, significantly faster than the official party position.
He then told Politico that President Barack Obama’s 2011-12 budget proposal was "a joke. It’s hard to explain how detached from reality this is, to think that the country can spend another $1.6 trillion when it doesn’t have the means."
And in an interview with Fox News that April, host Alisyn Camerota asked Mulvaney whether he would vote to to raise the debt limit, which some had called "Armageddon." (Experts have agreed.)
Mulvaney responded, "It's no more Armageddon and no more catastrophic than what we're doing right now -- spending, what, $1.5 trillion we don't have this year."
During a debate over raising the debt ceiling, Mulvaney ended up authoring a budget bill dubbed "Cut, Cap and Balance" in 2011 that would have capped spending and added a balanced-budget amendment to the Constitution.
Mulvaney also held a series of "Spending, Debt and Deficit" town halls around his district in 2011, telling attendees at one of the gatherings, in the Sun City Carolina Lakes development, that "the country’s debt is much worse than I ever thought. Forty-two cents of every dollar Americans spend is borrowed. Allowing this figure to increase compromises U.S. foreign policy."
In January 2013, Mulvaney sought across-the-board cuts in federal spending to offset $51 billion in proposed aid for those hit by Hurricane Sandy. While Mulvaney acknowledged the need for Sandy aid, he added, "I believe we can provide that relief while finding ways to pay for it rather than adding to the nation's ballooning deficit."
In March 2015, as lawmakers were considering whether to find ways around budgetary spending caps, Mulvaney sided with sticking to the caps because "deficits matter. Still," he told the Washington Examiner.
The authors of the Almanac of American Politics 2016 noted Mulvaney’s strident position, writing, "In his first term, he often bucked his party’s leadership in the name of fiscal discipline and voted against several spending bills backed by House Speaker John Boehner."
Asked about the discrepancy, OMB spokesman John Czwartacki said it stems from the change in the political dynamics of Washington. When Mulvaney was in Congress, there was a Democratic president and, for much of the period, a Democratic Senate, both of which preferred to stimulate the economy through spending.
Mulvaney did not have the "chance to support tax cuts with a chance of passage," so Mulvaney fought instead to decrease the deficit by challenging the Obama administration on spending, Czwartacki said.
Since Trump’s election, Republicans have had unified control of Washington, so Mulvaney "is now in a place where he can drive the idea of spending restraint while at the same time emphasizing the need for economic growth through deregulation, fairer trade, and of course tax cuts."
Independent budget experts still see a stark contrast between Mulvaney’s views then and now.
At an Oct. 4 tax policy panel on Capitol Hill sponsored by the Committee for a Responsible Federal Budget, PolitiFact asked panel members what they thought of Mulvaney’s Fox News Sunday comments.
Marc Goldwein, the group’s senior vice president, said as recently as a few months ago, when Trump released his annual budget proposal, Mulvaney "called for revenue-neutral tax reform," a sign that he came into his new position as "one of the true fiscal hawks in the Trump administration."
However, he added, Mulvaney is "now saying that we need big debt to grow the economy. I think that's backwards. If you got Congressman Mulvaney from two years ago to look at this statement and told him that it was Obama's OMB director (saying it), I can only imagine what he would say."
Stan Collender, a budget specialist and executive vice president at the MSL Group consulting firm, called Mulvaney’s switch "hypocrisy" and that "there are no extenuating circumstances" for it.
Deficits from tax cuts should not get a pass if deficits from spending don’t, experts said. Both add to the debt.
"Our nation's debt situation makes deficits at the current and predicted level unsustainable," said Steve Ellis, vice president of Taxpayers for Common Sense. "It doesn't matter if the deficit comes from a shortfall in revenue or increased discretionary or mandatory spending -- it all adds to the debt."
Asked about the additional deficits that are projected to accompany Trump’s tax proposal, Mulvaney said "we need to have new deficits."
That’s a sharp contrast with his long record of statements, both as a member of Congress and as a nominee for OMB director, that deficits and debt are a major problem. We rate his recent statement a Full Flop.