Republican leaders sat down recently with President Donald Trump and his top aides about avoiding a budget debacle this fall. Not everyone was on the same page.
With Trump and acting White House chief of staff Mick Mulvaney at his side, acting budget chief Russ Vought repeatedly urged Mitch McConnell and Kevin McCarthy to raise the debt ceiling without a broader agreement to lift stiff spending caps.
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McConnell, the Senate majority leader, was open to different ways to raise the debt ceiling and eager to avoid default. But he eventually grew tired of hearing from Vought.
“Listen buddy, we’re not doing a clean debt ceiling. Get a budget caps deal,” McConnell said, according to people familiar with the conversation in April.
For years, Mulvaney and Vought were the kind of conservative agitators that made life difficult for McConnell and his caucus. Now they have Trump’s ear on fiscal issues and have been directed to cut a deal with Congress — even though they’ve already expressed resistance to increasing spending in any pact with Democrats, raising the prospect of another shutdown fight or even a debt ceiling showdown in the fall.
Senate Republicans are not exactly thrilled, and they’re not shy about brushing back Trump’s aides.
“I don’t see the leader as negotiating with OMB or the chief of staff. The leader doesn’t negotiate with staff,” Sen. John Cornyn (R-Texas), one of McConnell’s closest allies, said dismissively.
As to Mulvaney and Vought’s approach: “We do need to cut spending. But cutting discretionary spending, especially defense spending, is not the place to save money… it’s in the entitlement programs.”
So Senate Republicans are instead pinning their hopes on Treasury Secretary Steven Mnuchin, who was deputized after the April encounter to enter into the critical spending talks. Mnuchin is viewed as so integral to the negotiations that a Tuesday meeting among Senate Republicans and the trio of administration officials was postponed to accommodate his schedule.
In a meeting last month with McCarthy, McConnell and Democratic leaders, Speaker Nancy Pelosi (D-Calif.) questioned the group’s authority to negotiate on behalf of the tempestuous president, according to people familiar with the matter.
Much to attendees’ surprise, Mnuchin scribbled numbers outlining a possible spending deal on a piece of paper. Democrats found the offer too low on domestic spending, but saw it as evidence he has room to maneuver.
And at meetings with the administration in recent weeks, one Senate Republican familiar with the talks noted that at times Mnuchin has physically positioned himself closer than usual to the president and lawmakers.
“That says something. He’s the point man … Mnuchin is obviously the swing man right now,” the senator said, who hastened to add a truism in Trump’s White House: “It may change.”
Mnuchin hasn’t yet successfully negotiated a spending deal with Congress, a difficult task given Trump’s aggressive drive for border wall money that left the government partially shuttered for 35 days this winter.
But the former Wall Street financier is seen as more amenable by Democrats and Republicans alike to compromise than Mulvaney, who served in the House for six years as a founding member of the hard-line Freedom Caucus, or Vought, who worked at Heritage Action, a conservative lobbying organization often at odds with McConnell.
“Mulvaney comes with a real background and history of being obstructionist, favoring government shutdowns,” said Senate Minority Whip Dick Durbin (D-Ill.), a top Democrat on the Appropriations Committee. “It is not conducive to finding common ground.”
Senior administration officials and Republicans close to the White House are well aware of Senate Republicans’ frustrations with Mulvaney and Vought. And they know top lawmakers would prefer a quick resolution to the debate over spending caps and raising the debt ceiling.
But the administration officials argue tension between top White House aides and Republican lawmakers stems from not only different ideological visions but a desire to criticize Trump’s policies without criticizing Trump himself.
“These are the president’s policies, not Russ and Mick’s policies. It is easier to target or to hit them to than to say, ‘We are really mad at the president,’” said one senior administration official. “Many of the Senate Republicans miss the days when they had a chief like John Kelly who reflexively took their side against the president.”
The ascendant Vought and Mulvaney have brought several conservative aides into the Trump White House, including Rachel Semmel, who worked for Kentucky Gov. Matt Bevin in his 2014 primary challenge to McConnell. Russ Vought’s wife, Mary Vought, leads the Senate Conservatives Fund, which has sought to take down incumbent Republicans.
Both Vought and Mulvaney serve in acting roles and have tussled with the GOP.
Mulvaney’s previous nomination to be OMB director was opposed by Sen. John McCain (R-Ariz.), who said Mulvaney was “pitting the national debt against our military,” but he was narrowly confirmed. After Vought’s nomination as deputy OMB director was delayed by Cornyn amid a dispute over hurricane funding, Vice President Mike Pence broke a tie to approve him. Then when Mulvaney became acting chief of staff, Vought slid into the top job at OMB.
From there they’ve tried to impose their belt-tightening will. Vought issued a veto threat against House Democrats’ spending proposals on Tuesday for increasing domestic spending too much. Mulvaney lamented at a fiscal summit that “there is no center of gravity to reduce spending in this town,” though he expressed confidence in avoiding a shutdown or default.
“A lot of the cuts that they made in the president’s budget were arbitrary and made without any consultation at all. An example would be zeroing out the Community Development Block Grant fund,” said Sen. Susan Collins (R-Maine), who leads an Appropriations panel. It “is the single request from members that I get most often to fund.”
Despite reservations among Republican leaders, the duo isn’t without GOP allies. Mulvaney has good relationships with his old home-state colleagues South Carolina Sens. Tim Scott and Lindsay Graham as well as conservatives Mike Lee of Utah and Pat Toomey of Pennsylvania, according to administration officials.
Sen. Rand Paul (R-Ky.) said he speaks to both of them as he attempts to stop a budget caps deal, a sign that both Congress and the White House are divided on whether to strike an agreement with Pelosi and Senate Minority Leader Chuck Schumer.
“The biggest mistake we’ve made the last few years as far as being fiscally responsible is getting rid of the budget caps,” Paul said. He added that Vought and Mulvaney “share the same concerns.”
If the Senate negotiators prefer working with Mnuchin, it is because they know he wants no drama on spending or the debt limit.
“Mulvaney is famous in debt limit talks for prioritization, which is about as popular as cancer in Republican circles,” said a Republican official with knowledge of negotiations between the White House and Congress, referring to a conservative proposal that could roil financial markets.
“McConnell’s been through enough negotiations with these Mulvaney types to know where this is going,” the official added.
Heightening the uncertainty is the prospect that Trump could undercut his own negotiators at any time. Trump frequently talks directly to conservative lawmakers who do not want to compromise with Democrats. And the stakes are as high as ever as brutal budget caps take effect in the coming months absent a deal.
“Our members are concerned that a sequester would be really bad for the military,” said Sen. John Thune (R-S.D.). “There is another point of view, shared by some in the administration and probably some in Congress that would like to see the sequester kick in.”
“That’s the minority view,” he added.