Trump's Budget Gets a Hearing on Capitol Hill

Mick Mulvaney, the director of the Office of Management and Budget, will defend the White House's budget request in front of the respective congressional committees Wednesday and Thursday. The administration's goal on Capitol Hill this week, according to a White House source, is two-fold: to make a case for fiscal responsibility through spending cuts, and to set the table for its tax reform proposal.

Presidential budget proposals tend to be viewed by committee chairs as more like guidelines than actual dictations for what the government should be spending. Mulvaney should expect some tough questions about those spending cuts, chiefly from Democrats. A preview of those lines of inquiry came Tuesday in the OMB director's on-camera briefing, where reporters pressed Mulvaney on cuts to discretionary programs like food stamps and disability insurance. ("We are not kicking anybody off of any program who really needs it," Mulvaney said.) And there may be some objections among Republican hawks to certain cuts to the State Department and a lower-than-desired defense spending increase.

What remains to be seen is whether anyone in Congress will push the White House to explain why a budget proposal that claims to restore fiscal responsibility—according to Mulvaney, it balances in 10 years—does so without reforming the two largest entitlement programs, Medicare and Social Security. The most recent scores by the Congressional Budget Office predict the Social Security trust fund will be exhausted by 2030 and that by 2047, Medicare, Social Security, and Medicaid would make up for half of all federal noninterest spending, compared with today's proportion of about two-fifths of all such spending. Simply put, these mandatory entitlements are growing rapidly and will begin to crowd out other discretionary spending.

"You can't fix the long-term unless you address those two programs," says Michael Tanner, an expert on entitlements at the libertarian Cato Institute. "They are alone 40 percent of the budget."

But as Mulvaney said in an off-camera briefing with reporters on Monday, his own effort to encourage President Trump to prioritize reform of Medicare and Social Security fell on deaf ears. Mulvaney was told to produce a balanced budget without those reforms—and with added defense spending, border-wall funding, $2.6 trillion in new infrastructure and technology spending, and a federal paid-family-leave program. The result? Cuts or caps for discretionary spending and optimistic projections on economic growth.