The OMB Director’s Impossible Position

President Trump’s newly installed budget director “will either be the most influential member of the Cabinet or the next one out the door,” according to longtime budget expert Stan Collender.

Former Rep. Mick Mulvaney, R-S.C., took “some of the most virulent anti-deficit, anti-spending positions” in the past few years and his selection for the job gave Trump credibility with the Freedom Caucus, said Collender, a Capitol Hill veteran staffer now executive vice president of the MSLGROUP.

“Mulvaney is in a tough spot” and may have to abandon many positions he took as a congressman if he is to fulfill President Trump’s goals of cutting taxes while hiking defense spending by $30 billion to $40 billion, he said. Collender spoke at a Friday gathering of the Professional Services Council, a contractors group.

Mulvaney also could have trouble producing the administration’s “skinny budget”—a summary document that articulates the administration's spending priorities—by the promised mid-March date, given that key executive positions remain unfilled at OMB, Collender said.

The OMB director previously opposed raising the defense and domestic spending caps imposed by the 2011 Budget Control Act. He also opposed funding military combat missions through the expandable Overseas Contingency Operations account rather than the Defense Department’s base budget, a practice that essentially gave the Pentagon considerable spending flexibility while still technically remaining in compliance with the budget law.

Collender painted a bleak budget picture, noting the perfect storm of rising deficits, climbing interest rates, and “uncontrollable” entitlement spending, which he characterized as “essentially the largest adjustable rate mortgage you’ve ever seen.” It is doubtful that Trump will be able to negotiate lower interest rates or achieve the 4.5 percent economic growth his advisers are banking on, he said.

The Republicans’ plan to both repeal the Affordable Care Act and enact tax reform using a rare tactic of passing two (Senate filibuster-proof) budget reconciliation bills in one year, one for fiscal 2017 and one for 2018, already is behind schedule. Democratic resistance and pressure from town hall meetings across the country will only add to the challenge.

Collender suggested Republicans in Congress may resort to altering Senate appropriations rules and firing the parliamentarian. Trump, in turn, could order Mulvaney not to enforce sequestration’s spending caps.

“This is not the way you should budget,” Collender said.