Stop Worrying and Love Spending....

How the GOP Learned to Stop Worrying and Love Spending

Trump wanted to cut $1.7 trillion out of the budget. The House Republicans just countered by cutting nothing. What happened?

By MICHAEL GRUNWALD

Mick Mulvaney, President Trump’s budget director, faced a jarring question Sunday on Face the Nation: Why have Republicans given up trying to rein in spending? The show’s host, John Dickerson, compared it to Weight Watchers giving up on dieting. Mulvaney sort of challenged the premise, but not with excessive vigor.

“Well, you’re not giving up entirely on spending,” Mulvaney said.

Mulvaney was a leading spending hawk in Congress before he joined the administration, and the 2018 Trump budget he unveiled this fall was a remarkably hawkish document, calling for drastic rollbacks of spending in almost every nonmilitary area of government. But the Republican-controlled Congress mostly ignored it, and these days, the party’s top priority is clearly tax cuts, with spending cuts relegated to maybe-down-the-road.

The Republican budget resolution that passed Congress on Thursday required no mandatory cuts whatsoever, even though it paved the way for tax cuts that would boost federal deficits by $1.5 trillion.

That’s a stark contrast with Trump’s limited-government budget plan, which would have slashed $1.7 trillion out of so-called mandatory spending like Medicaid, disability insurance and food stamps over a decade. In fact, the spending trajectory of the federal government has barely changed since Trump took office, except for some increased spending on defense and disaster relief, and significant change does not seem imminent. As Mulvaney told Dickerson: “There just isn’t the political will on the Hill right now.”

That’s putting it mildly. Congressional Republicans have ignored Trump’s proposals for severe cuts to “discretionary spending” like the State Department, the Environmental Protection Agency, and the National Institutes of Health. They still talk about reining in Big Government and taming the national debt, but so far, their governing philosophy looks more like don’t-tax-and-spend economics.

“There’s no doubt that congressional Republicans have a decreased appetite for tackling overspending,” says Dan Holler, a conservative activist with Heritage Action. “It’s tough. There’s always resistance. People like spending money.”

During the Barack Obama presidency, congressional Republicans constantly denounced out-of-control spending; in 2011, they almost forced the government into default to extract significant spending cuts from the White House. Now they’re reverting to their habits during the George W. Bush era, when Republicans oversaw a major spending spree on the military, homeland security and even prescription drug coverage.

The GOP has already punted on three belt-tightening opportunities in the Trump era.

First, it flatly rejected Mulvaney’s recommendations for major cuts in the “omnibus” spending package for the last several months of 2017, cutting a status quo deal with Democrats instead. The president grudgingly signed the deal, while threatening to force a government shutdown in September if the 2018 spending package didn’t reflect his priorities. But in the wake of Hurricanes Harvey, Irma and Maria, there wasn’t much of an appetite for austerity in Washington, prompting a second bipartisan deal to maintain the status quo on spending until December.

Republicans had another chance to push spending restraint in their budget resolution. When I was working on a profile of Mulvaney this summer, his former colleagues in the rabble-rousing House Freedom Caucus were refusing to support any resolution that didn’t mandate at least $400 billion in mandatory spending cuts over 10 years. But Republican moderates balked, and so did conservatives worried about farm subsidies. The standoff continued from July until October, when the Freedom Caucus, worried about the slipping timetable for tax reform, finally agreed to a resolution that mandated only $200 billion in spending cuts. And when the Senate version of the resolution didn’t mandate anything but tax cuts—along with language authorizing drilling in the Arctic National Wildlife Refuge—the caucus caved again. Their only demand was that GOP leaders take up the tax cuts immediately, a fairly ironic ask after they held up the process for months.

“In Washington, the expectation is always that you’re going to keep spending whatever you’re spending,” says Senator James Lankford of Oklahoma, another prominent spending hawk on the Hill. “Cutting spending is seen as a totally radical thing.”

Mulvaney has always been a limited-government true believer—he got into politics because he thought Republicans were spending too much under Bush—and he’s clearly frustrated his former Hill colleagues don’t share his sense of urgency. But his aides said there’s been at least a bit of movement in the House; of the $54 billion in specific discretionary spending cuts in Trump’s budget, about $9 billion were adopted in House spending bills, including cuts to renewable energy programs, global health assistance and popular grants for innovative transportation projects. And the Obamacare repeal bills that the vast majority of Republicans supported would have cut nearly $1 trillion out of Medicaid and other health spending.

“We’re in the process of turning around the battleship, and obviously, it’s a process,” one senior administration official said. “But we’re happy warriors. We’ll keep trying, even when Congress doesn’t want to join the fight.”

These days, the top priority for the administration as well as congressional Republicans is tax cuts, and Mulvaney’s team believes there might be more appetite for spending cuts after the tax cuts happen. Some liberals fear that they might be right, that Republicans will use the deficits expanded by their tax cuts as a rationale to go after Medicaid and other welfare-state programs favored by Democrats.

“They’ll say the fiscal outlook is so concerning that they need deep cuts for low-and-moderate-income folks,” says Joel Friedman, vice president for federal fiscal policy at the left-leaning Center on Budget and Policy Priorities. “That’s been a standard feature of Republican budgets. I think we need to take it seriously.”

The tea party movement demonstrated that budget austerity and limited government have some political power as an idea, but actual spending cuts tend to be politically difficult, because the people who lose the most tend to pay the most attention. It’s easier for politicians to give out benefits than take them away; tax cuts and spending are political ice cream, while tax hikes and spending cuts are broccoli. Trump has shown some willingness to propose cuts in programs that serve his own political base—including an economic development program for Appalachia, subsidies for rural airports, and technical assistance for U.S. factories—but Republicans in Congress have shown little willingness to adopt them.

That dynamic is currently playing out in the debate over disaster aid, as the administration has been gently raising the issue of offsetting cuts for some of the new spending, so far to no avail. There has been friction between Mulvaney’s Office of Management and Budget and the normally conservative Texas congressional delegation, which has requested a massive Harvey relief package that OMB officials consider above and beyond true emergency needs. It included $10 billion for vaguely defined Army Corps of Engineers work, more than the annual Army Corps budget for the nation, and $300 million for the Economic Development Administration in Texas, even though the Trump budget proposed to eliminate that agency entirely. But Senator John Cornyn of Texas is playing hardball; he’s vowed to hold up the nomination of Mulvaney’s deputy, Russell Vought, until Texas gets its cash.

“They’re anxious to add zeroes,” another senior administration official said. “We’re going to have to have an adult conversation about long-term needs."

The next big test of Washington’s spending resolve will come in December, when the status quo deal from the fall expires and Congress needs to decide how to fund the government in 2018. The Budget Control Act that Obama negotiated with the Republicans in 2011 has set tight annual spending caps, but there have been bipartisan deals every year to go over the caps, because Republicans want to spend much more on defense and Democrats want to spend more on nondefense. This summer, Trump and his team were talking tough about vetoing any budget that didn’t include his priorities—including cuts to EPA and the State Department as well as more money for the Pentagon and his border wall—but these days, they sound resigned to modest tweaks on the status quo. They say Mulvaney wants to keep lighting the path to restraint, even if Congress doesn’t follow him right away.

And anyway, tax cuts come first.

“We can walk and chew gum at the same time,” the first official said. “Right now, there’s enormous focus on tax reform. But we’re still figuring out the endgame on appropriations. It’s not getting public attention, but it’s got our attention.”